According to a new report by Closed Loop Partners, a North American based investment firm, the US and Canada send over 34 million tons of plastics to landfills or incinerators each year. Following current trends, global plastics demand is forecasted to triple by 2050. Mismanaged waste plastic leaks into the environment whereas transformational technology solutions that repurpose plastics waste and keep materials in play in circular supply chains can generate US$ billions in new revenue.
According to the report, the demand for plastics is strong and growing, yet the supply of recycled plastics available to meet demand is stuck at 6 percent. Options for recycling plastics today fail to capture the full opportunity: with current infrastructure, a small portion – less than 10 percent – of plastics waste from many consumer packages and products is recovered and recycled.
Yet every sector of society is engaged in the broad challenges of climate change and the visible problem of plastics waste. Many of the world’s largest and most influential brands are taking ownership of the problem and looking at their own supply chains.
However, current mechanical processes and infrastructure are not enough to support the publicly stated goals of many global brands who have committed to use more recycled plastics in their products and packaging or to achieve the zero waste goals of major North American cities.
Moving from “possible to probable”
Entitled “Accelerating Circular Supply Chains for Plastics”, the report points out that investors and brands have an opportunity to influence and accelerate “transformational technology solutions” that repurpose plastics waste and keep materials in play in circular supply chains.
The report surveyed at least 60 technology providers developing these transformational technologies that purify, decompose, or convert waste plastics into renewed raw materials. Nearly all of them at least at the lab stage of maturity, with significant potential to grow and scale.
More than 40 of these solution providers are operating commercial-scale plants in the US and Canada today, or have plans to do so within the next two years. But of the technology providers surveyed, it has taken them 17 years on average to reach growth scale suggesting that more investment is needed now to accelerate these solutions – to go from “possible” to “probable”.
If these technologies are understood more broadly – and are more widely adopted and scaled – tremendous economic value can be realized. According to the report, if these technologies can meet market demands for plastics and petrochemicals, they have a potential addressable market of US$120 billion – US$47 billion for polymers – in the US and Canada alone.
Call for collaboration and investment partnerships
However, the authors note that going from “possible” to “probable” will require new solutions and business models that integrate innovations with existing infrastructure, flexible technology platforms that can evolve over time, and market incentives driven by public and private policies.
The Center for the Circular Economy at Closed Loop Partners is creating a roadmap for how to build on this momentum by unifying the diverse actors in this space and accelerating collaborative investment to bring solutions to scale. The report also proposes “accessible, shared language” to use to define and talk about each of these processes going forward:
- Purification involves dissolving plastic in a solvent, then separating and purifying the mixture to extract additives and dyes to ultimately obtain a “purified” plastic. Purification processes make it possible to safely transform carpet into yogurt cups — greatly increasing the value of plastics waste.
- Decomposition is a process that involves breaking molecular bonds of the plastic to recover the simple molecules “monomers” or “intermediates” from which the plastic is made. In other words, plastic does not just have to go back to plastic – it can become a valuable raw material to be used again.
- Conversion is similar to decomposition in that the process involves breaking the molecular bonds of the plastic. A key difference is that the output products from conversion processes are often liquid or gaseous hydrocarbons similar to the products derived from petroleum refining. These raw materials may enter different supply chains, such as fuels for combustion, and/or petrochemicals that can be made into intermediates and monomers for new plastics. Through these technologies, it’s possible to recycle plastic back into plastic and create valuable upstream products that keep materials in play.
Some 250 investors and strategic partners, including the world’s largest brands, private investors, petrochemical companies and plastic manufacturers, and government and NGO partners, are already engaging with the companies profiled in the report.
Nonetheless Closed Loop Partners is calling on investors, brands, and industry to join in investing to bring solutions to scale, increase the awareness of how these technologies apply to different supply chains and waste streams, adopt the shared language from this research; and collaborate on partnerships with technology providers.
