ImpactAlpha, July 28 — Half of the more than 300 tons of plastic produced globally each year goes to single-use purposes. More than 500 companies, including brands such as The Coca-Cola Company, Unilever and L’Oréal, have committed to using at least 25% recycled plastic in their packaging by 2025.
Lack of supply for recycled plastic has hampered such efforts, according to a recent study by Circular.co. “New solutions must at some point address more attractive economics, reducing green premiums,” Circular.co’s Ian Arthurs told ImpactAlpha. “As green premiums go down closer to zero, that will unlock demand and supply.”
This week, Singapore-based Circulate Capital backed India’s Lucro Plastecycle, which recycles and converts post-consumer plastic waste into recycled packaging, such as shrink wraps and polybags. Circulate made the investment through its Circulate Capital Ocean Fund, backed by corporate LPs including PepsiCo, Chanel, Coca-Cola, Chevron Phillips and Unilever.
The follow-on investment will help Lucro “meet the growing demand for post-consumer recycled plastic packaging,” said Lucro’s Ujwal Desai.
Earlier this year, Circulate raised $65 million from the same group of corporate partners, as well as IDB Lab and Builders Vision, to invest in recycled plastic businesses in Latin America and the Caribbean.
Also this week, Norfund invested in Nigeria’s Wecyclers, a woman-led company that offers subscription-based waste recycling in lower-income urban neighborhoods. Wecyclers also scored funding from the SDG Outcomes Fund as part of a spate of African development impact bonds.
The Global Green Growth Institute backed an electronic waste recycling plant in rural Senegal. Nevada-based lithium-ion battery recycler Redwood Materials is in talks to raise $700 million, at an estimated $5 billion valuation.