Dow, LyondellBasell, Nova launch circular PE, PP fund

Major petrochemical producers Dow, LyondellBasell and Nova Chemicals have launched a closed loop circular plastics fund to advance the circular economy and accelerate recycling of polyethylene (PE) and polypropylene (PP) in the US and Canada.

The fund, managed by US-based circular plastic investment firm Closed Loop Partners, started with an initial investment of $25mn. The aim is to grow the fund to $100mn through further investments by the founders and adding more stakeholders, as well as recycle around 230,000t of plastics over the fund's lifespan.

Plastic sustainability has become increasingly important for petrochemical producers worldwide because of environmental pressure to reduce plastic waste. The fund complements initiatives that Dow, LyondellBasell and Nova have put in place in their value chains. Dow has formed a partnership with UK-based Mura Technology to advance plastic recycling efforts, while LyondellBasell is targeting to produce 2mn t/yr of recycled polymers by 2030. Nova last month launched 100pc post-consumer resins for flexible film applications.

The main objectives of the fund are to increase the collection of targeted PE and PP by improving the recycling supply chain; optimise sorting systems to raise the amount of high-quality plastics such as food and medical-grade plastics that are sent for remanufacturing; and invest in facilities and equipment for the manufacturing of final goods using recycled PE and PP.

Current supplies of recycled plastics can meet only 6pc of demand for commonly used plastics in the US and Canada, according to Closed Loop Partners. It estimates potential revenues of up to $120bn in the US and Canada alone if this need is addressed at scale.

By Matthew Rajendra