NEW YORK - Dow, LyondellBasell and NOVA Chemicals have announced the establishment of the Closed Loop Circular Plastics Fund which will invest in scalable recycling technologies, equipment upgrades and infrastructure solutions.
The Fund, managed by Closed Loop Partners, and with an initial $25 million investment, invites businesses across the plastics value chain to join in advancing the recovery and recycling of plastics in the U.S. and Canada.
The goal of the catalytic fund is to grow to deploy $100 million, through a combination of the Fund's founding investors, additional corporate investors and financial institutions, in order to attract additional capital beyond the Fund's own commitments. At scale, the Fund’s investments aim to recycle over 500 million pounds of plastic over the Fund’s lifespan.
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 high-quality, recycled content in products and packaging:
- Access – Increasing the collection of targeted polyethylene (PE) and polypropylene (PP) plastics by advancing current and next-generation material collection systems, including transportation, logistics and recycling sortation technologies and infrastructure.
- Optimization – Upgrading recycling systems to more efficiently aggregate, classify and sort the targeted plastics to increase the total amount of high-quality plastic, including food-grade and medical-grade plastic, sent for remanufacturing.
- Manufacturing – Investing in facilities and equipment that manufacture ﬁnished products, packaging or related goods using recycled content, including recycled PE and PP.
Since its founding in 2014, Closed Loop Partners’ existing portfolio of more than 50 investments has diverted more than 4,600 million pounds of material from landfills and back into manufacturing supply chains. Building on this, the Closed Loop Circular Plastics Fund will invest in technologies, companies and infrastructure projects that enhance the recovery and recycling of target materials including post-consumer and post-industrial PE and PP in the U.S. & Canada.
The Fund will deploy a flexible mix of debt and equity financing, and will also aim to stimulate mainstream co-investments, including those from financial institutions, into circular solutions for plastics to further accelerate impact at scale.
With established facilities, extensive supply chain networks and markets, Dow, LyondellBasell and NOVA Chemicals are collectively well-positioned to help advance the transition to a new, more circular system. “The plastic resin manufacturers that create value for their shareholders now and in the future will be the ones that ensure that 100% of their products are safely recycled or reused, and never discarded in a landfill or elsewhere in our ecosystem," said Ron Gonen, Founder & CEO of Closed Loop Partners. "We look forward to investing in sustainable infrastructure and innovations that enable and encourage other companies, including investors in the Closed Loop Circular Plastics Fund, to deploy significantly more of their own capital to further scale these critical solutions.
“Alongside championing scalable reusable packaging models and innovative new materials, growing recycling and circular economy infrastructure in the U.S. and Canada plays a critical role in eliminating plastic waste and reducing the need for the costly extraction of raw materials.”
The current supply of recycled plastics meets only 6% of demand for the most commonly used plastics in the U.S. and Canada. Systemic bottlenecks, misaligned incentives and policies, technological inefficiencies and outdated equipment across the plastics recovery system contribute to millions of tons of plastic going to waste in landfills and oceans.
It is hoped that increasing the recovery and recirculation of plastics could help meet an addressable market for plastics with potential revenue opportunities of $120 billion in the U.S. and Canada alone.
“Dow is investing with Closed Loop Partners as another way to catalyze additional investment in recycling technology and infrastructure in the U.S. & Canada," added Jim Fitterling, Chairman and CEO of Dow. "Plastic materials are essential to a sustainable, low carbon economy and this fund, alongside other investments and collaborations we are engaged in, will help move society toward a circular economy, ensuring plastic is not lost to the environment.
“But our commitment and capital alone are not enough to end plastic waste. We urge others, across all sectors of society, to join us and scale the technologies, partnerships and capital needed to build the circular plastics supply chains of the future.”