It can seem like the consensus around recycling today in the US is that it doesn’t actually happen. Numerous articles and videos that have come out over the past few years have revealed the “recycling myth” or the idea that most of the materials we deposit into our recycling bins, whether correctly or not, eventually end up slowly decomposing in a landfill, or worse, in the ocean. And there is certainly truth to this. More than 90 percent of plastic produced globally gets dumped or incinerated because there is no cheap way to repurpose it.
The US previously exported most of its recycling to China, but recent Chinese policies have banned imports of most recyclables, forcing the US to deal with its trash. Unfortunately, the US lacks the capacity to do so. Despite a 40 percent growth in post-consumer plastic use over the last 20 years, the recycling rate in the US has remained below 10 percent due to several factors, from consumer behavior to contamination, lack of capacity, and cost. Waste that is not recycled overwhelms landfills, incinerators, and oceans, while associated microplastics contaminate local ecosystems, water resources, and agricultural products.
But we’re not ready to throw in the towel on recycling. We are excited to announce our recent investment in Circulus, a company transforming post-consumer plastic bales into high-quality resins suitable for commercial and industrial applications, including applications for direct food contact. Circulus specifically focuses on low-density polyethylene or LDPE. Think of the plastic wrap used around industrial pallets delivered to big box stores or the numerous plastic bags that end up in the trash. In short, LDPE is everywhere, but despite making up 25 percent of US plastic waste, it only accounts for 7 percent of recycled waste. Circulus’s process sorts, shreds, washes, and extrudes recycled LDPE to create a high-quality post-consumer resin suitable for similar applications as virgin LDPE.
One of the biggest issues with most recycling processes today is that they degrade the plastic quality overtime. Circulus is using technologies proven to work in Europe to produce high-quality outputs thereby upcycling plastic instead of downcycling it. Circulus’ resin pellets can be used for a variety of applications including packaging, shrink and stretch wraps, stand up pouches, injection molded goods, and industrial sheeting. The company contracts for bales of LDPE through several suppliers and sells the post-consumer recycled pellets through existing offtake agreements.
There are many benefits to Circulus’ process. GHG emissions are reduced by nearly 90 percent over virgin LDPE. A single Circulus plant saves the equivalent of 30mm gallons of gasoline compared to virgin plastic production and allows for the reuse of 85 percent of the water at the facility. The company is also working to power the plants with 100 percent renewable energy. On top of the impressive environmental scorecard, Circulus is also supplying the US recycled LDPE market, which is severely undersupplied today due to the confluence of the Chinese ban on solid waste imports and the pull from corporates targeting higher renewable plastic percentages by 2025 or 2030.
The company has two plants operational today and one under construction. This $300 million facility led by Apollo Global Management with S2G’s participation will support the company’s ongoing recycling infrastructure development. Plastics production and recycling has implications across the energy, oceans, and agricultural sectors. We look forward to working with Circulus to change the trajectory of and narrative around plastics recycling in the US.