Infinity Recycling’s “Circular Plastics Fund” received strong support in its first capital close from global plastics supply chain investors.
The fund will invest in companies developing advanced recycling technologies to break down growing streams of plastic waste into raw materials, 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 organization Indorama and Dutch investment agency Invest-NL, the latter committing more than €40m to the fund.
The Circular Plastics Fund is an Article Nine “dark green” impact fund under the EU Sustainable Financial Disclosure Regulation, targeting a net internal rate of return (IRR) of 18 to 22 %. The Luxembourg-registered fund has an initial investment target of €150 million.
Jeroen Kelder, Managing Partner at Infinity Recycling, said: “The world is overwhelmed with plastic waste and the supply continues to grow exponentially as demand does not slow down, which means that current approaches focused on mechanical recycling cannot stem the tide.
“The Circular Plastics Fund fills this market gap by supporting companies with proven advanced recycling technologies and enabling them to grow.”
In a statement, the Circular Plastics Fund claims the benefits of advanced waste ‘recycling’, which it says complements mechanical recycling by enabling the conversion of difficult plastic waste streams into valuable raw materials. These technologies, the fund says, also overcome quality restrictions in using recycled materials to make new food packaging, which accounts for about 40% of global plastic demand.
Management consultancy McKinsey, notes the Circular Plastics Fund, estimates that the global market for advanced recycling plastic could reach 500 million tonnes per year by 2050, which could account for around 40% of the total plastic supply. virgin raw materials for new products.
Jan-Willem Muller, Managing Partner at Infinity Recycling, added: “We believe that locally sourced waste can be used within the existing infrastructure of the petrochemical market, and it is the fastest and most scalable solution for this existential crisis.
“It is therefore only fitting that our fund for circular plastics achieved its first capital close during ‘Circular Economy Week’ in the Netherlands.”
Earlier this month, the World Wide Fund for Nature (WWF) published a position paper on advanced recycling – also known as chemical recycling – saying it should only be applied in accordance with the principles of the circular economy.
The document outlines “significant concerns” surrounding these technologies, on human health, worker safety and the environment. If these concerns are not addressed, WWF says, implementing advanced recycling technologies could lead to “increased carbon emissions” and not “fundamentally increase recycling rates.”