Closed Loop Partners, New York, will manage a fund created by Dow, LyondellBasell and Nova Chemicals that will invest in scalable recycling technologies, equipment upgrades and infrastructure solutions.
The companies initially invested $ 25 million in the Closed Loop Circular Plastics Fund. The fund is seeking additional investment, with a goal of increasing to $ 100 million, from companies across the plastics value chain to help advance plastics recovery and recycling in the United States and Canada. On a large scale, the Closed Loop Circular Plastics Fund’s investments aim to recycle more than 500 million pounds of plastic over its 10-year lifespan, said Georgia Sherwin, director of communications and strategic initiatives at Closed Loop Partners.
According to Closed loop partners, the Closed Loop Circular Plastics Fund will invest in three strategic areas to increase the amount of recycled plastic available to meet the growing demand for recycled content in products and packaging: access, optimization and manufacturing.
The fund’s investments aim to increase the collection of targeted polyethylene (PE) and polypropylene (PP) plastics by advancing materials collection systems, including recycling technologies and infrastructure for transport, logistics and sorting. . It also aims to improve recycling systems to more efficiently aggregate, classify and sort targeted plastics to increase the total amount of plastic, including food and medical grade plastics, sent for reconditioning. In addition, the fund will invest in facilities and equipment that manufacture finished products, packaging or related products using recycled content.
The fund will deploy a flexible mix of debt and equity financing in the form of below-market loans and will aim to stimulate traditional co-investments, including those from financial institutions, said Closed Loop Partners. With well-established facilities, supply chain networks and extensive markets, Dow, LyondellBasell and Nova Chemicals are well positioned to help advance the transition to a new, more circular system.
Sherwin says the minimum investment size will be $ 1 million, while the average investment period will vary from three to five years, with the exception of bridging loans.
Closed Loop Partners says the Closed Loop Circular Plastics Fund will work closely with the company’s Closed Loop Infrastructure Fund and Closed Loop Beverage Fund as part of a larger closed-loop infrastructure group that aims to strengthen the recovery infrastructure in North America. At the same time, the company’s Ventures group will focus on upstream solutions, such as scaling reuse models and innovative new materials, to deal with plastic waste globally. This requires consciously designing systems and products to use fewer materials, exploiting alternatives to plastics where appropriate, implementing circular business models such as refillable and reusable products, and investing in infrastructure for recovery, says Closed Loop Partners.
The performance of the Circular Plastics Fund will be assessed based on a combination of financial results and impact, including tonnes of PE and PP diverted from landfills and tonnes of avoided or reduced greenhouse gas emissions, Sherwin said.
“The plastic resin manufacturers who create value for their shareholders now and in the future will be the ones who ensure that 100% of their products are recycled or reused safely, and never dumped in a landfill or elsewhere in our ecosystem.” , Ron Gonen, says the founder and CEO of Closed Loop Partners. âWe look forward to investing in sustainable infrastructure and innovations that enable and encourage other companies, including Closed Loop Circular Plastics Fund investors, to deploy much more of their own capital to further scale these critical solutions. Along with the promotion of scalable reusable packaging designs and innovative new materials, the growth of recycling and circular economy infrastructure in the United States and Canada is playing a critical role in eliminating plastic waste and reducing waste. need for expensive extraction of raw materials.
According to Closed Loop Partners, the current supply of recycled plastics only meets 6% of the demand for the most commonly used plastics in the United States and Canada. Increasing recovery and recirculation of plastics could help meet an addressable market for plastics with potential revenue opportunities of $ 120 billion in the United States and Canada alone, the company adds.
âDow is investing with Closed Loop Partners as another way to catalyze additional investment in recycling technology and infrastructure in the United States and Canada. Plastics are essential to a sustainable low-carbon economy and this fund, alongside other investments and collaborations in which we are engaged, will help move society towards a circular economy, ensuring that plastic is not lost on the environment, âsays Jim Fitterling, president and CEO of Dow, Midland, Michigan. âBut our commitment and our capital alone are not enough to put an end to plastic waste. We urge others, across all sectors of society, to join us and scale up the technologies, partnerships and capital needed to build the circular plastic supply chains of the future. “
âMeeting the challenge of plastic waste in the environment requires collective action on several fronts,â says Bob Patel, CEO of LyondellBasell, with US operations based in Houston. âAs a company, we have implemented a multi-pronged strategy that includes innovations in mechanical recycling, advancing molecular recycling technologies and incorporating renewable raw materials into our manufacturing,â he explains. -he. âIn addition to our company’s efforts, further improvements to recycling infrastructure are critical to capturing the value of used plastics and advancing the circular economy.â
Luis Sierra, President and CEO of Nova Chemicals, a Canadian company, says, âInnovation is the key to our collective success. If we can create plastic products that are easier to recycle, perform better with less materials, incorporate more recycled content, and invest in recycling and recovery infrastructure, we will achieve a zero plastic waste future. We are ready to work along the entire value chain, developing new solutions that will shape a better future. “
Since its inception in 2014, Closed Loop Partners says its existing portfolio of more than 50 investments has diverted more than 4.6 billion pounds of material from landfills to manufacturing supply chains.