A $10 million investment in Closed Loop Circular Plastics Fund from Japanese banking institution Sumitomo Mitsui Banking Corporation (SMBC), announced by Closed Loop Partners, aims to advance the recovery and recycling of flexible and rigid plastics polyethylene (PE) and polypropylene (PP) in the United States and Canada.
The Closed Loop Circular Plastics Fund is a part of Closed Loop Partners’ strategy of a circular economy to reduce, reuse, and recycle plastics. It focuses on resin types, such as PE, PP, and flexible plastics, which require additional investment to keep more material in circulation and ensure the demand for recycled materials in the industry will be met.
Catalytic debt and equity financing will be provided by the fund, aiming to spur further investments in recovery and recycling offerings as well as infrastructure that aids in addressing bottlenecks in the recycling system.
These new platforms can help catalyze greater financial participation, which will accelerate the projects, infrastructure, and innovations required to close the loop on plastics, said Jennifer Louie, Head of the Closed Loop Infrastructure Group at Closed Loop Partners.
The Closed Loop Circular Plastics Fund, launched in 2021, has made multiple investments in private companies and public organizations. It has financed projects that advance collection infrastructure, enabling technologies, sortation capabilities, and re-manufacturing of PE and PP plastics.
The performance of the fund will be benchmarked through a combination of financial and impact outcomes, which includes tons of PE and PP impacted and tons of greenhouse gas emissions reduced or avoided.
Masayuki Takanashi, chief sustainability officer of Sumitomo Mitsui Financial Group, said SMBC is committed to sustainability and creating partnerships that allow them to leverage their footprint in the Japan and Asia Pacific region. They will be a part of the Closed Loop Circular Plastics Fund’s impact-first effort to expedite infrastructure, equipment, and municipal services, plus innovation and enabling technologies for flexible films and specific types of plastic.
Closed Loop Partners’ vision for a circular economy includes a future for plastics that reduces the need to extract new resources, makes use of design innovation and material science, and promotes reuse and new product delivery models. To date, the company has kept 4.8 million tons of materials in circulation and contributed to the avoidance of 10.1 million tons of carbon dioxide equivalent emissions, which is a measurement used to compare emissions from multiple greenhouse gasses by converting them to their equivalent measurement of carbon dioxide.
An increase in plastics recovery, material reduction solutions, scalable reuse systems, and new materials can help address a market for plastics that has a large opportunity for revenue. Not only is there an economic opportunity, but plastics recovery and recycling divert millions of tons of plastics from landfills and the environment. Plastic waste is on course to triple by 2060, according to a report by the Organization for Economic Co-operation and Development, increasing the urgency of the need for investments.
