investment viewpoints

Plastic wrap: biotransformation, bans on waste exports and a landmark lawsuit

Plastic wrap: biotransformation, bans on waste exports and a landmark lawsuit
Victoire Carous - Senior Investment Manager & Co-Lead, LOIM Plastic Circularity

Victoire Carous

Senior Investment Manager & Co-Lead, LOIM Plastic Circularity
Felix Philipp, PhD - Senior Research Analyst Materials and Circularity Lead

Felix Philipp, PhD

Senior Research Analyst Materials and Circularity Lead

Scaling up plastic reuse, the biotransformation of refuse and banning many current European exports of waste are among the topics we cover in this issue of Plastic wrap, our bimonthly review of the science, policy and corporate activity pivotal in creating a circular plastics value chain.


Need to know

  • Policy action could cut plastic waste generation in 2040 by a quarter below the current business-as-usual scenario, at a cost of 0.5% of global GDP
  • Export of plastic waste from Europe to non-Organisation for Economic Co-operation and Development countries will be prohibited under new rules
  • Biotransformation of plastic waste, a circular textile fabric and new recycling infrastructure are among the new solutions attracting investor capital recently


Getting up to speed

We have several updates regarding the LOIM Plastic Circularity team, which now counts 10 investors (of which four are dedicated to the strategy), four sustainability researchers from holistiQand five technical advisors from the Alliance to End Plastic Waste. This, in addition to news about our latest transaction and policy initiative, are outlined below:  

  • Alexandre Ouimet-Storrs has joined as Senior Investment Manager. He has more than 13 years’ experience in climate and deep-tech venture capital, both as a GP and as a corporate venture investor, and a Master of Chemical Engineering from McGill University. Solène Marinie, a Private Equity Associate with experience in M&A, infrastructure and private debt, has also joined. Both are dedicated to the strategy and achieving its goal of delivering financial performance and environmental impact
  • Last December, the strategy has completed an investment in, a French companyselling refillable personal and home-care products online by subscription. By shipping refills in powder form (when conventional products contain 90% water) the company provides a convenient and affordable way to consumer to reduce carbon emissions and plastic packaging 
  • Senior Research Analyst, Materials and Circularity Lead, Felix Phillipp, PhD, writes in Le Temps about the principles essential to the success of reuse and refill models, along with how investors can help accelerate this change
  • LOIM is  proud to be joining the Business Coalition for a Global Plastics Treaty launched by the Ellen MacArthur Foundation and the WWF, which brings together businesses and financial institutions committed to supporting the development of an ambitious United Nations treaty to end plastic pollution 


For the latest developments in the science, policy and corporate activity advancing plastic circularity, please explore the sections below.

  • Unlocking the reuse revolution

    Reuse systems need to be significantly and urgently scaled in order to address the issue of plastic waste, according to the new report, “Unlocking a reuse revolution”. The study, developed in partnership by researchers and consultancies Systemiq3 and Eunomia, focuses on business-to-customer, returnable and reusable packaging systems.

    The report contains offers recommendations on how to design and scale returnable packaging, in which containers are returned to businesses by consumers so they can be professionally cleaned, refilled and put back into circulation. The study was developed with more than 60 organisations including the European Investment Bank, national governments, reuse experts and major brands and retailers.


    Policy to end pollution

    The Organisation for Economic Co-operation and Development (OECD) has published a policy scenario analysis on requirements to virtually eliminate mismanaged waste by 2040.

    The report finds that global ambition with early, stringent and co-ordinated policy action could cut plastic waste generation in 2040 by 25% below the current business-as-usual scenario and virtually eliminate plastic waste pollution, at a cost of 0.5% of global GDP. Large-scale investment is required, given the combined investment needs for waste collection, sorting and treatment amount to more than 1 trillion USD between 2020-2040 for non-OECD countries.


    Falling short

    The circular economy is gaining popularity but falling short on action, according to a new report from the Circle Economy Foundation.

    Circularity is attracting commitments from policy makers and consumers, but this is not translating into sufficient action. In the past six years, the world has consumed over half a trillion tonnes of materials – almost as much as was consumed in the 20th century.

    Six of the nine key ‘planetary boundaries’ that measure environmental health have been broken. The report finds that adopting 16 circular economy solutions could not only reverse the overshoot of planetary boundaries but also slash current global demand for material extraction by one-third.

  • Plastic footprints

    World Wildlife Fund’s ReSource: Plastic programme released its fourth annual public report, revealing how some of the world’s largest brands are tracking, measuring and reporting on their respective plastic footprints

    The programme is now collecting comprehensive data from its members on reuse efforts with the aim of sharing learnings on the best ways to eliminate plastic waste. This latest report includes progress made by each ReSource member from 2021 to 2022 and compares year-over-year results for legacy members.

    The WWF finds that the elimination of unnecessary and single-use plastics continues to be the most important action that companies can take to directly reduce plastic waste through their own activities.


    Legal troubles for plastic polluters

    PepsiCowas hit with the first-of-its-kind lawsuit over plastic pollution. New York Attorney General Letitia James launched one of the first legal challenges from a US state against a major plastic producer.

    A 2022 investigation from James’s office found PepsiCo-branded plastic packaging to be by far the most significant contributor to plastic waste clogging the Buffalo River and its tributaries. The litter is breaking down into microplastics, contaminating the local water supply.

    The New York lawsuit includes a “public nuisance” claim and requests that the state’s Supreme Court require PepsiCo to reduce the amount of plastic packaging entering the river and remediate pollution that has already occurred.


    Ecodesign and sustainable products

    The European Parliament and Council reached an agreement on the Ecodesign for Sustainable Products Regulation.

    The objective of the Ecodesign for Sustainable Products Regulation is to make sustainable products the standard on the European Union (EU) market and reduce their overall environmental and climate impacts.

    The new regulation also contains measures to end the wasteful and environmentally harmful practice of destroying unsold consumer products. In addition, large companies will need to disclose every year how many unsold consumer products they discard and why.


    New rules on waste shipments

    The European Parliament and the Council reached an agreement on the future new regulation on waste shipments. The rules will also facilitate the use of waste as a resource. The agreement is a contribution to the goal of the European Green Deal of reducing pollution and advancing the circular economy.

    Export of plastic waste from the EU to non-OECD countries will be prohibited. Individual countries may receive such waste five years after the new rules come into effect and only if strict environmental conditions are met. EU legislators aim to prevent environmental degradation and pollution in third countries caused by plastic waste generated in the EU.

    Other waste suitable for recycling will be exported from the EU to non-OECD countries only when they ensure that they can deal with it in a sustainable manner. At the same time, it will be easier to ship waste for recycling within the EU thanks to modern digitalised procedures. There will also be stronger enforcement and cooperation in fighting waste trafficking.


    Global plastic treaty

    The third meeting of the Intergovernmental Negotiating Committee (INC-3) for a global agreement to end plastic pollution concluded at the United Nations Environment Programme (UNEP) headquarters in Nairobi.

    Member states did not manage to initiate work on priority topics, including the development of targets, baselines, and schedules for an overall reduction in plastic production, as well as strict reporting mechanisms to inform and monitor compliance with a global reduction target.

    However, a mandate for a revised draft was achieved. This will form the basis for the next round of negotiations.

  • New recycling plant in Germany

    LyondellBasell announced it will commence building the company's first industrial-scale catalytic advanced recycling demonstration plant in Germany.

    The plant will be the first commercial-scale recycling plant to convert plastic waste into feedstock for production of new plastic materials. It is expected to have an annual capacity of 50,000 tonnes per year and is designed to recycle the amount of plastic packaging waste generated by over 1.2 million German citizens per year. The company has set a target for completing construction by the end of 2025.


    Sustainable packaging

    Technology company Avantium is collaborating with Albert Heijn to make packaging more sustainable, using Avantium’s 100% plant-based and circular material PEF (polyethylene furanoate) for various forms of packaging.

    Beverage company Refresco will leverage the technology to produce Albert Heijn’s new fruit juice bottle, which will be made from PEF. This will be the first PEF application to be introduced in Albert Heijn stores once Avantium’s commercial plant for PEF is operational. Albert Heijn is the first supermarket chain to introduce PEF packaging for own-brand products.


    Circular solution for fashion

    BASF and Inditex announced the launch of a new material made completely from textile waste.

    ‘Loopamid’ is a polyamide 6 material and represents the first circular solution for nylon apparel made entirely from textile waste. Retailer Zara has used the material to create a jacket, including fabrics, buttons, filling, hook and loop and zipper.

  • Biodegradable plastics

    British technology company Polymateria announced a successful GBP 20 million funding round for scaling up a technology that renders plastics biodegradable.

    The technology is designed to attract microbes that biotransform plastic products, such as bags and packaging, enabling these materials to biodegrade in the natural environment without leaving behind microplastics or harmful residues.


    Textile recycling

    Circular technology and logistics platform, SuperCircle, raised USD 7 mn to scale and meet the demand for its textile recycling solutions from brands and retailers.

    The preseries A financing round was co-led by San Francisco-based Radicle Impact and California-based Ulu Ventures, with additional investors.

    The company claims it has built the technology and reverse logistics infrastructure to power recycling solutions for brands and retailers. It connects waste management with fibre-to-fibre recycling solutions, packaged in plug-and-play technology that allows companies to maintain their own recycling programmes or offload bulk inventory with a high level of transparency.


    Nature-based materials

    Xampla, a Cambridge, UK-based natural materials company, raised USD 7 mn in funding.- The company intends to use the funds to expand the applications of its consumer brand, Morro, into new markets, and to advance production of biodegradable, plant-based materials, supporting big brands to move away from single use plastic. Backed by 15 years of research at the University of Cambridge, Morro materials are fully biodegradable and home compostable, and food safe, offering high strength, grease and oxygen barrier properties.


    Infrastructure investments

    New York-based Closed Loop has provided approximately USD 15 mn in investments to local municipalities for projects to upgrade recycling infrastructure and services across the Midwest and Southeast US.

    The firm’s private credit arm, the Closed Loop Infrastructure Group, is responsible for distributing these investments, which are helping advance the infrastructure needed to collect, process and return materials to supply chains at their end of life.

    The infrastructure upgrades financed by the Closed Loop Infrastructure Group have resulted in nearly USD 40 mn in direct savings to municipalities to date, by means of keeping more materials in circulation and out of landfills.


    Funding recycling

    Technology company UBQ Materials announced it had secured USD 70 mn in funding, led by Eden Global Partners.

    The investment will support the scaling up of the company’s commercial, sales, and marketing operations. This will include additional facilities in Europe and North America, alongside the impending opening of UBQ’s industrial-scale facility in the Netherlands. The new facility will have an annual production capacity of 80,000 tons and be capable of converting 104,600 metric tons of waste annually into a new raw material.


    Global waste management with AI

    Recycling equipment manufacturer Bollegraaf Group has announced plans to invest USD 12.8 mn in AI waste analytics specialists Greyparrot, to further enable automation in sorting facilities. Bollegraaf will serve as a global distributor of Greyparrot Analyzer, which uses AI camera systems to track materials on conveyor belts. The analysis of waste data works to maximise recycling rates at material recovery facilities.

To learn more about our Plastic Circularity private-equity strategy, please click here.


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