New York-based investment firm Closed Loop Partners has launched the Closed Loop Local Recycling Fund, a circular economy program to develop recycling systems in underserved US communities. Funding the project’s launch on January 20, 2022, is a $35 million investment from PepsiCo Beverages North America.
Closed Loop Partners will use the capital to deploy small-scale, modular recycling systems in rural areas and small cities lacking recycling access because of geographic distance from larger, municipal materials recovery facilities (MRFs) or lack of funding.
The small systems are less capital intensive than conventional MRFs and reduce costs and greenhouse gas emissions associated with transporting recycled materials to distant recycling centers.
In addition, each of the small systems can recycle at least 8,000 tons per year of materials — including plastic, paper, glass, and metals — and keep 400 tons of recycled polyethylene terephthalate (rPET) in circulation each year.
PepsiCo’s investment in the local recycling fund will support local MRF development projects. Fast Company recently reported that these small projects cost only about $1.5 million each, vs. $30 million for a new, large-scale recycling center, an amount that Closed Loop Partners confirmed.
In addition to boosting access to recycling and reducing waste, the Closed Loop Local Recycling Fund will unleash a new supply of rPET to support PepsiCo’s pep+ (PepsiCo Positive) sustainable packaging strategy. However, close proximity to PepsiCo bottling or bottle-molding plants will not be the most important criterion as Closed Loop Partners evaluates potential projects.
Recycling site selection factors.
“The selection of projects to fund will be more related to the incremental rPET capture opportunity and local economics,” for example, transportation distance to the nearest PET reclaimer, Georgia Sherwin, director of strategic initiatives and communications with Closed Loop Partners, told PlasticsToday.
“Eligible communities include those without existing curbside recycling programs, those that recently terminated curbside recycling programs, those at risk of terminating programs, and those with existing programs but with demonstrable ability to boost recycled PET capture with the addition of a small-scale MRF in the community,” Sherwin added. “The smaller, local MRFs lay the groundwork for the future of recycling, introducing a new way to meet and adapt to the various needs of communities across the US.”
Closed Loop Partners is currently accepting applications from municipalities and private companies looking for debt funding to build small, modular MRFs. Public- and private-sector entities — including local departments of environmental quality, local haulers, and recycling system manufacturers — are welcome to inquire.
In addition to providing funding, Closed Loop Partners will serve as project developer for the new MRFs, advising on system design and equipment providers (Revolution Systems, for example), overseeing projects, and arranging offtake for the recycled materials.
“We see a lot of opportunity in the space and know that small-scale, more localized supply chains are critical in building resilient circular supply chains,” Sherwin said. “We’re excited to build and develop the partnerships needed to achieve this, including with different manufacturers interested in supporting the development of this type of physical infrastructure.”