Global investors back advanced recycling investment fund
Infinity Recycling’s ‘Circular Plastics Fund’ has received strong backing at its first capital close from global plastic supply chain investors.
The fund will invest in companies scaling up advanced recycling technologies to break down surging plastic waste flows into primary commodities, which can be reused by industry as inputs for new products.
Investors include US petrochemical companies, Chevron Philips Chemical and LyondellBasell, Singapore-based global materials organisation Indorama, and Dutch investment agency Invest-NL, with the latter committing over EUR 40 million to the fund.
The Circular Plastics Fund is an Article Nine ‘dark green’ impact fund within the EU’s Sustainable Finance Disclosure Regulation, targeting a net internal rate of return (IRR) of 18 to 22 per cent. The Luxembourg-registered fund has an initial investment target of EUR 150 million.
Jeroen Kelder, Managing Partner at Infinity Recycling, said: “The world is being overwhelmed by plastic waste and supply continues to grow exponentially because demand isn’t slowing down, which means current approaches focused on mechanical recycling will be unable to stem the tide.
“The Circular Plastics Fund addresses this gap in the market by supporting companies with tried and tested advanced recycling technologies and enabling them to scale up.”
In a statement, the Circular Plastics Fund purports the benefits of the advance ‘upcycling’ of waste, which it states complements mechanical recycling by allowing the conversion of difficult plastic waste streams into valuable primary commodities. Such technologies, the fund asserts, also overcome quality restrictions in the use of recycled materials in the manufacturing of new food packaging, which accounts for around 40 per cent of global plastic demand.
Management consultancy McKinsey, the Circular Plastics Fund notes, estimates that the global market for advanced recycling plastic could reach 500 million tonnes per year by 2050, potentially accounting for around 40 per cent of total virgin feedstock supply for new products.
Jan-Willem Muller, Managing Partner at Infinity Recycling, added: “We believe that locally sourced waste can be utilised within the existing petrochemical market infrastructure, and that is the fastest and most scalable solution for this existential crisis.
“It is very appropriate, therefore, that our Circular Plastics Fund has successfully completed its first capital close in the ‘Week of the Circular Economy’ in the Netherlands.”
Earlier this month, the Worldwide Fund for Nature (WWF) published a position paper on advanced recycling – also known as chemical recycling – asserting that it should only be applied in line with circular economy principles.
The paper laid out the ‘significant concerns’ surrounding such technologies, on human health, worker safety, and the environment. If these concerns are not addressed, WWF states, the implementation of advanced recycling technologies could lead to ‘increased carbon emissions’ and fail to ‘fundamentally increase recycling rates’.
