April 17, 2024, New York, NY –– Circular economy-focused investment firm Closed Loop Partners announces the closing of a catalytic loan to Olyns, a technology and media company that engineered a new artificial intelligence (AI)-driven solution to improve the collection, sortation and recycling of consumer packaging. The financing from Closed Loop Partners’ private credit arm, the Closed Loop Infrastructure Group, will support the manufacturing of Olyns’ Cubes––AI-powered reverse vending machines that collect and sort packaging materials, including food-grade plastic, glass and aluminum––and accelerate the expansion of Olyns’ consumer recycling infrastructure across the U.S.

Founded in 2019 in Silicon Valley, Olyns is increasing access to consumer recycling with an innovative technology solution that makes material collection efficient and scalable through a self-sustaining business model. Olyns’ AI-powered Cubes are a new take on reverse vending machines, where people deposit eligible beverage containers and receive cash deposits back electronically. Not only do Olyns’ Cubes provide rewards to incentivize participation and include a screen that can display media, but their machines also leverage AI, enabling them to rapidly learn to recognize new deposited products sold by brands at retailers across the country, as well as track deposit rates by product and brand. This is especially relevant amidst growing policy around materials recovery, such as Extended Producer Responsibility (EPR). Olyns currently partners with top retailers and consumer goods brands to locate their Cubes in high traffic locations such as major supermarkets, big box stores, pharmacies and gas stations, ensuring recycling is convenient and advertisements are effective. By operating as both a consumer recycling network and digital out-of-home media network, Olyns is changing the economics of recycling.

Source: Olyns

Olyns not only has the opportunity to collect millions of containers per year, but also to improve material sortation to maintain the quality of the recycled materials. By using AI to identify and sort containers at the point of deposit into separate bins, Olyns minimizes the co-mingling and contamination common to traditional recycling. This results in industry-leading material recovery rates and bale quality, ensuring that more containers deposited can be made into new containers. The vast majority of the rPET collected in Olyns’ Cubes is food-grade and can be used as material for recycled bottles.

“The material quality of aluminum, PET and glass beverage containers collected by the Olyns reverse vending machines is some of the highest quality material Ming’s facilities receive from our customers,” said Jeff Donlevy, General Manager of Ming’s Recycling Corp, a current processor of Olyns CRV material. “Mixed plastic material collected through co-mingled programs often can’t achieve the same quality standards, and significant amounts end up in landfill. Olyns’ technology minimizes co-mingling, and consistently achieves the food-grade quality material that plastic reclaimers want.”

As the Olyns network scales, it helps unlock a new supply of recyclable post-consumer plastic and aluminum, helping corporations meet their sustainable packaging goals and reducing their dependence on virgin plastic from non-renewable sources. As demand for food-grade rPET is anticipated to outpace supply by about three times by 2030, scaling solutions that can bolster supply of high-quality recycled content is critical. By expanding recycling access to more locations, Olyns’ Cube network collects and processes a growing portion of the estimated 4.6 billion pounds of unrecycled PET that would otherwise end up in landfill every year, closing the loop on food-grade PET and reducing carbon emissions that would result from the production of virgin plastic.

“Greater consumer access to recycling, more efficient material sortation and economically sound recycling systems are critical to recovering high-quality materials,” says Philip Stanger, Co-Founder and CEO of Olyns. “Since we installed our first Cube in California in 2020, user growth has been phenomenal, proving that when people have easy access to recycling, impact is magnified. While we started with collecting PET plastic, aluminum and glass beverage containers, we are looking to build our AI capacity to potentially expand collection for hard-to-recycle materials, such as films and flexibles. Closed Loop Partners’ financing will help us build the circular economy infrastructure that helps make recycling possible for more materials, and accessible to more communities.”

The Closed Loop Infrastructure Group has been providing flexible loans to projects that build out circular economy infrastructure and innovation in the United States for nearly 10 years. This includes robust recycling infrastructure equipment, as well as rapidly growing companies poised to scale circular solutions. The loan to Olyns underscores the potential of new innovative solutions and creates a significant opportunity to increase material collection in underserved areas, including states without deposit return schemes such as bottle bills. By producing a source-separated, clean stream of materials, Olyns also helps bolster the market for high-quality recyclables, looping more material back into the same or similar products.

“We see immense opportunity to finance rapidly growing technology innovations, alongside large-scale recycling infrastructure, to improve materials sortation and accelerate the circular economy in the U.S. Expanding the types of financing available in the market can help meet the distinct needs of innovators developing new circular solutions. Catalytic capital is a powerful tool, providing the foundation needed to accelerate further growth,” says Jennifer Louie, Managing Director and Head of the Closed Loop Infrastructure Group at Closed Loop Partners. “Closed Loop Partners’ Infrastructure Group is proud to finance scalable and replicable solutions and provide access to the Closed Loop Partners ecosystem to support their growth. We are thrilled to partner with Olyns, as they disrupt material collection and advance more circular supply chains for valuable packaging materials.”

Moving forward, Olyns looks to further scale its solution, partnering with key brands to expand to new locations and increase collection and recovery of more materials, reducing reliance on natural resource extraction and driving forward a circular economy.

If you are interested in learning more about Olyns, visit here. If you are interested in applying for funding from the Closed Loop Infrastructure Group, learn more about Closed Loop Partners’ catalytic capital strategy here.

About Olyns

Olyns innovates at the nexus of retail media and recycling, connecting people to recycling and brands to customers. Founded in 2019 in Silicon Valley, Olyns’ pioneering ecosystem includes the Cube, an AI-powered reverse vending machine that provides self-serve beverage container recycling to consumers and includes a 55-inch screen to display advertising. Olyns partners with top retailers and consumer goods brands to locate Cubes in high traffic locations such as major supermarkets, big box stores, pharmacies, and gas stations, ensuring recycling is convenient and advertisements are effective. By operating as both a consumer recycling network and digital out-of-home media network, Olyns is changing the economics of recycling. With its use of artificial intelligence (AI) to identify and sort containers at point of deposit, Olyns minimizes the co-mingling and contamination common to traditional recycling and unlocks a valuable new supply of food-grade recycled plastic.

Olyns is on a mission to inspire people to recycle, stop the depletion of the earth’s resources, and accelerate the shift to a circular packaging economy. Learn more at www.olyns.com

About Closed Loop Partners

Closed Loop Partners is at the forefront of building the circular economy. The company is comprised of three key business segments: its investment arm, Closed Loop Capital Management, managing venture capital, buyout private equity and catalytic private credit investment strategies; its innovation center, the Center for the Circular Economy; and its operating group, Closed Loop Builders.

The firm’s catalytic private credit arm, the Closed Loop Infrastructure Group, provides a mix of flexible financing solutions to support a range of circular economy projects, companies, infrastructure and enabling technologies. The Infrastructure Group deploys catalytic capital, which seeks to accelerate and de-risk the development of high-impact projects and companies. Areas of strategic investment include: providing below-market rate loans to finance circular infrastructure, providing catalytic financing to increase recovery of hard-to-recycle plastics and PET bottles, and financing and deploying small-scale, modular materials recovery facilities (MRFs) to increase recycling in communities with no or limited access to recycling.

Closed Loop Partners is based in New York City and is a registered B Corp. Learn more at closedlooppartners.com.

Disclaimer

This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Partners or any company in which Closed Loop Partners or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Information provided reflects Closed Loop Partners’ views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision.

NEW YORK, April 16, 2024 /PRNewswire/ — Today, the Composting Consortium, an industry collaboration led by the Center for the Circular Economy at Closed Loop Partners, released a groundbreaking report that fills a critical data gap for the U.S. composting industry: how well does certified, food-contact compostable packaging actually break down in real-world composting facilities? The report, Breaking It Down: The Realities of Compostable Packaging Disintegration in Composting Systems, shares findings from an 18-month study––the largest known field test of certified, food-contact compostable packaging conducted in North America––revealing the realities of compostable plastic and fiber disintegration in diverse in-field composting conditions.

In total, the study tested over 23,000 units of certified food-contact compostable packaging within large-scale industrial composting environments. This encompassed 31 types of fiber packaging & products and compostable plastic packaging & products––such as PLA and PHA––across 10 diverse composting facilities across the U.S.

The data is released at a critical time, as compostable packaging grows as an alternative to conventional plastics amidst an urgent waste crisis. Roughly one-third of the world’s food is wasted each year––a loss estimated at $230 billion. Nearly 60% of the uncontrolled methane emissions from municipal landfills are caused by discarded food, highlighting its significant impact on the environment. To address the urgent food waste and climate challenge, demand for organics circularity is rising, and with it, the volume of food-contact compostable packaging––a market poised to grow 16% annually in the U.S. until 2032, 4x faster than traditional plastic packaging. Today, the U.S. composting industry is in an early stage of transformation to accept and process more food waste; approximately 70% of the composters who process food also accept and process some format of food-contact compostable packaging, with the understanding that accepting these materials helps bring in more food waste to their facilities.

For compostable packaging to reach its full potential as a circular packaging solution, disintegration at end-of-life is critical, in tandem with consistent labeling and design that differentiates compostable and non-compostable packaging further upstream, as well as policies that incentivize robust composting infrastructure to process these materials. In this new study, the Composting Consortium focuses on how compostable packaging breaks down. Previously, scant information was publicly available on the disintegration of compostable packaging, particularly on the compost environments in which they disintegrate.

This groundbreaking study found that overall, compostable packaging breaks down successfully at composting facilities that meet reasonable operational parameters (e.g., compost pile temperatures, moisture, oxygen, pH, etc., defined in The Composting Handbook). While the Consortium’s study did not assess disintegration with the intention to “pass” or “fail” any specific compostable packaging or product, notably, the average compostable plastic and fiber packaging in-field performance in this study met disintegration thresholds used by industry groups:

• Compostable plastic packaging and products broke down successfully across five composting methods, and all 10 facilities’ varying processing timeframes and operating conditions, achieving 98% disintegration on average by surface area, which exceeds industry thresholds to achieve a 90% or higher disintegration.
• Compostable fiber packaging and products achieved 83% disintegration on average by surface area, meeting industry thresholds to achieve an 80% or higher disintegration. Findings showed that certain operating conditions, like turning, agitation and consistent moisture levels above 50%, support increased disintegration of fiber packaging and products.

The findings point to the viability of certified food-contact compostable packaging as an alternative packaging solution to single-use conventional plastic packaging. It also highlights the importance of ensuring that these materials align with available recovery infrastructure, and the importance of expanding robust recovery pathways to divert compostable packaging, and the food scraps they carry, from landfill––that is at the core of the Composting Consortium’s mission.

The Composting Consortium, in collaboration with its brand and industry partners, the US Composting Council, the Compost Research and Education Foundation and other groups, will leverage these findings to help inform policymaking around compostable packaging, update best management practices for composting facilities and shape a field test standard for evaluating compostable packaging disintegration at composting facilities. Data from this study will be donated to the Compostable Field Testing Program (CFTP), which will later launch an open-source database on the disintegration of compostable packaging. Additionally, ASTM International is currently developing an in-field test method for assessing disintegration of compostable items at composting facilities, and the data from this study will be used to inform the draft field testing method. As the Consortium moves into its next phase of work, the results of this study will shape its engagement and education efforts with composters, municipalities, regulators, brands and packaging manufacturers.

“Field testing for disintegration has been ongoing for three decades, and the Composting Consortium’s work across the value chain has significantly advanced insights for the industry,” says Diane Hazard, Executive Director of the Compost Research and Education Foundation. “The collaborative approach and open-source data from this project both advances field testing methods and equips compost manufacturers and brands with the knowledge to better understand the variability of disintegration across different systems, all major steps towards successfully processing compostable packaging.”

“Brands and manufacturers must prioritize material selection and design and labeling for compostable packaging to achieve optimal performance in composting environments, which can then incentivize composters to accept food-contact compostable packaging materials at their facilities,” says Frank Franciosi, Executive Director of the US Composting Council, an industry partner of the Composting Consortium. “As feedstock for composters becomes diversified and more complex, it’s important for all entities within the supply chain to support consumer education on source separation of organics and reevaluate best management practices to support those composters who choose to accept compostable packaging, and this study is another tool for our industry to be able to start that process.”

“Alongside design and reduction as well as reuse and recycling, composting is an important solution for waste mitigation. Through this research, the Composting Consortium sheds light on what is needed for compostable packaging to have the greatest positive impact. Informed by this robust data, we can together ensure the responsible growth of compostable packaging and composting infrastructure, and drive toward circular outcomes, including increased diversion of food scraps and compostable packaging from landfills,” says Kate Daly, Managing Director and Head of the Center for the Circular Economy at Closed Loop Partners.

The study brought together the Consortium’s corporate brand partners, including PepsiCo, the NextGen Consortium, Colgate-Palmolive, Community Impact at Danaher, Eastman, The Kraft Heinz Company, Mars, Incorporated and Target Corporation; technical partners including the US Composting Council, Resource Recycling Systems (RRS), the Compostable Field Testing Program (CFTP) and the Biodegradable Products Institute (BPI); and a cohort of compost partners including Atlas Organics, Napa Recycling & Waste Services, Specialized Environmental Technologies, Windham Solid Waste Management, Black Earth Compost, Ag Choice Organics Recycling, Happy Trash Can Compost, Veteran Compost and Dayton Foodbank. Advisory partners include 5 Gyres, Foodservice Packaging Institute (FPI), ReFED, the Compost Research and Education Foundation (CREF), the Sustainable Packaging Coalition (SPC), Compost Manufacturing Alliance (CMA), Eco-Cycle, University College London (UCL), Western Michigan University (WMU), University of Wisconsin-Stevens Point and World Wildlife Fund (WWF).

About the Composting Consortium

The Composting Consortium is a multi-year collaboration to pilot industry-wide solutions and build a roadmap for investment in technologies and infrastructure that enable the recovery of compostable food packaging and food scraps. The Composting Consortium is managed by Closed Loop Partners’ Center for the Circular Economy. Learn more about the Consortium at closedlooppartners.com/composting-consortium/

About the Center for the Circular Economy at Closed Loop Partners

The Center for the Circular Economy is the innovation arm of Closed Loop Partners, a firm at the forefront of building the circular economy. The Center executes research and analytics, unites organizations to tackle complex material challenges and implements systemic change that advances the circular economy. The Center for the Circular Economy’s expertise spans circularity across the full lifecycle of materials, connecting upstream innovation to downstream recovery infrastructure and end markets. Learn more about the Center for the Circular Economy at closedlooppartners.com/the-center/

In January 2014, Doug McMillon, the CEO of Walmart, invited the CEOs and leadership of Unilever, P&G, PepsiCo, The Coca-Cola Company, Kenvue (formerly Johnson & Johnson Consumer Health) and Keurig Dr Pepper to join him on stage at the annual meeting of Walmart’s suppliers. It was a groundbreaking moment. Some of the world’s largest corporations announced that they had joined together as the founding investors in the Closed Loop Fund, the inaugural fund of Closed Loop Partners, and one of the first investment funds focused on financing the development of the circular economy.  

It was a monumental first step toward changing the trajectory of how we use our planet’s resources––away from a ‘take-make-waste’ economy and toward a waste-free world designed around resource efficiency, driving economic growth. This is the beginning of our story at Closed Loop Partners. 

Several key factors led to that moment on stage. My journey before Closed Loop Partners had given me a clear view into the economic opportunity of rebuilding antiquated and inefficient supply chains into efficient and circular supply chains that continually reused materials in local markets. An urgent waste crisis, an increase in environmental regulation and growth in consumer demand for environmental responsibility, coupled with the emergence of circular innovations, made developing the circular economy so important to the future of business that it brought competitors together to form the Closed Loop Fund. This collaboration by industry leaders helped lay the foundational infrastructure for the circular economy in the U.S. 

A few years later, as the circular economy gained momentum, our original Closed Loop Fund attracted additional corporate investors, including 3M, Amazon, BlueTriton, Colgate-Palmolive, Danone and Starbucks, catalyzing more capital into circular economy infrastructure. As our ecosystem grew, adding more strategies and asset classes, it attracted capital from financial institutions, including funds and accounts managed by BlackRock, leading family offices and foundation endowments. To meet the growing interest in the circular economy, the vision of Closed Loop Fund was expanded into other strategies, now comprising Closed Loop Partners. 

What started with one fund a decade ago has grown into three businesses that form the Closed Loop Partners ecosystem, focused on three key development areas of the circular economy: our investment arm, Closed Loop Capital Management, invests in circular solutions across venture capital, catalytic private debt and buyout private equity strategies; our innovation and advisory group, the Center for the Circular Economy, advances critical research and manages unprecedented pre-competitive industry collaborations; and our operating group, Closed Loop Builders, houses our first operating company, Circular Services, the largest privately held recycling company in the U.S. 

As I look back, some of Closed Loop Partners’ earliest catalytic investments demonstrate our founding vision and the foundation of the circular economy:  

• A decade ago, as changes in global policy highlighted the need for local circular economy infrastructure in the U.S., investments in recycling capacity expansion became critical. Eureka Recycling, a recycling company servicing Minneapolis and St. Paul, Minnesota, was a first mover in elevating U.S. recycling, leveraging their operational experience and engaging with policymakers, industry leaders and community advocates to influence systems change. Financing from Closed Loop Partners over the past 10 years supported a three-fold increase in Eureka’s polypropylene plastic recovery. Since then, they continue to be a leader in setting the standard for best-in-class recycling operations and infrastructure. 
• As the circular economy grew in the U.S., upgrades to municipal recycling systems were needed to keep pace with a growing volume of recovered materials. When aging recycling equipment needed replacing, the Waste Commission of Scott County pursued the change from dual- to single-stream recycling to improve material collection. Closed Loop Partners’ first loan nearly 10 years ago enabled the purchase of larger carts for curbside recycling and a redesigned single-stream MRF. The success of our first municipal loan catalyzed follow-on loans in 2018 and 2022, now enabling the county to serve 185,000+ households and process over 40,000 tons of paper, metal, glass and plastic per year. 
• The onset of corporate waste reduction goals also meant a rise in demand for alternative packaging. TemperPack was one of our first investments to advance new sustainable materials. TemperPack developed the first high performance, curbside recyclable thermal packaging for shipments of perishable goods such as food and pharmaceuticals. Today, they continue to be a leader in packaging innovation, with a range of solutions that protect products, strengthen brands, and keep waste out of supply chains.   
• Innovative circular solutions include new technologies that can work alongside material reduction, reuse and mechanical recycling to recover hard-to-recycle materials. One of our first investments was in PureCycle Technologies––its patented recycling process, developed by P&G and licensed to PureCycle Technologies, separates color, odor and any other contaminants from plastic waste feedstock to transform it into virgin-like resin. PureCycle closes the loop on the reuse of recycled plastics while making recycled plastics more accessible to companies looking to use a sustainable, recycled resin.* 

Since these catalytic investments were first made, the market has matured and Closed Loop Partners’ work has expanded to include venture capital and buyout private equity, as well as innovation advancement, infrastructure development and circular materials management. These early investments were a market signal, and our work today is a foundation upon which we will invest in and build the circular economy over the coming decades––as profitability attracts more investment and as supportive policy accelerates tailwinds for incumbent supply chains to transition to circularity. 

Closed Loop Partners now supports over 1,000 jobs across its ecosystem, all dedicated to advancing the circular economy. We are proud to work with leading organizations, cutting-edge innovators and over 50 of the world’s largest corporations committed to reducing waste across multiple areas––including plastics & packaging, organics, textiles and electronics. Closed Loop Capital Management manages over $500 million and has invested in over 80 companies, municipalities and organizations accelerating circular solutions. Together, our investments have kept 6 million tons of material in circulation and avoided 17.5 million tonnes of greenhouse gas emissions to date. The Center for the Circular Economy has led groundbreaking industry-leading pre-competitive collaborations that are focused on solving some of the most complex supply chain and manufacturing challenges, including reduction, reuse and recovery solutions for foodservice packaging and retail bags. And most recently, with over $700m in commitments from Brookfield, Microsoft, Nestlé, PepsiCo, SK Group, Starbucks and Unilever, we launched Circular Services, which is now the largest privately held recycling company in the U.S. It operates 20 recycling facilities and serves some of the largest municipal contracts in the nation including New York City, Palm Beach County, Austin, San Antonio and Phoenix.  

Closed Loop Partners has evolved as the circular economy has advanced. Today, the circular economy is recognized as a core solution to climate change mitigation as we all as a template for more efficient business operations. As more stakeholders recognize the financial and environmental opportunity of the circular economy, billions of dollars are beginning to move toward circular systems. More industry leaders are collaborating around shared waste reduction goals, leaders of countries are working together on a global plastics treaty, U.S. states are proposing and passing bipartisan Extended Producer Responsibility (EPR) legislation to fund recycling programs, and C-suites of Fortune 100 companies are pushing to achieve ambitious publicly stated circular economy and climate goals. 

Transforming entire supply chains across multiple industries is the work of generations, but the world is changing faster today than it was 10 years ago. As Closed Loop Partners enters a new decade of action and impact, we see a future ripe with opportunity. We are now at a pivotal point, and the next decade will be critical to delivering outcomes and building transparent, circular systems. There is much more work to be done in the next phase of this systemic shift, but together with strategic partners, and across our platform, we are focused on expanding our impact and rebuilding industries to follow nature’s lead––grounded in resource regeneration and positioned for a resilient future.     

As we celebrate this milestone in 2024, we will be sharing key insights on our impact over the last 10 years, and what is to come in the next decades of building the circular economy.   

We invite you to join us in the transition to the circular economy. 

 —

*In October 2020, PureCycle Technologies fully paid off its loan from Closed Loop Partners, thus exiting the Closed Loop Infrastructure portfolio as a borrower. The Closed Loop Partners team, however, continues to engage with the PureCycle Technologies team as they continue growing their operations. 

*This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Partners or any company in which Closed Loop Partners or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Information provided reflects Closed Loop Partners’ views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision. 

The way scrap metal is processed today is a mystery to most outside the industry. When a car or an appliance reaches the end of its useful life, most of us often rely on a junk removal service––or hope that the retailer selling the new equipment will take the old one with them on the way out. What happens after that?

Emily Molstad, Caleb Ralphs and their team at VALIS Insights have spent the past five years getting to know these markets in minute detail. Imagine spending days and nights captivated by how metals are processed in the U.S. after they’re done being used. Imagine coming face-to-face with the information asymmetries in the system that result in mixed metals being shipped overseas instead of recovered for local use. Imagine having hundreds of conversations with processors, metals refiners and customers of virgin and recycled metals to better understand why the system is built the way it is and where there are opportunities to improve it. That’s what this team has done so comprehensively over the past few years, driving toward the creation of their AI-powered software that is closing the loop on a circular economy for metal fabrication.

Today, used metals are still dramatically under-recovered in the U.S. Recycling rates for many non-ferrous and ferrous metals lag below 60%, despite the high resale value of these materials. As of the latest data from the EPA, only 27.8% of ferrous metals (those containing iron) were recycled in 2018––and nearly 7.2% of all municipal solid waste landfilled in 2018 was from steel––equivalent to 10.5M tons. The reality is often worse for non-ferrous metals (such as aluminum, copper, nickel) which may only be sorted for recycling after their heavier ferrous counterparts are removed.

These insufficient recycling rates for metals can be attributed to losses during material processing. Current recycling technology and processing capabilities struggle to address the growing complexity of mixed metal products, leading to contaminated and downgraded metal recovery. Scrap processors have historically recovered only certain metal commodities that were perceived to have higher resale value, leaving out other various mixed metals from the sorting process and shipping them overseas. As a result, significant volumes of aluminum, copper, nickel and cobalt are lost from our domestic supply. However, increasing domestic demand in the U.S. is driving up value for these types of materials, and tools like VALIS’s solution help scrap processors understand the monetary value of the metals they are currently selling overseas.

Closed Loop Partners has long understood the complexities of end-of-life commodity markets––we’ve been investing in the space for a decade and recognize that challenges exist at every stage in the value chain––collection, sorting, resale and ultimately recovery into the next life. For large format composite metals––such as automotive, appliances and heavy machinery––collection has rarely been a problem. These products are bulky enough that they typically end up in processing facilities around the country. The challenge is what happens after that.

We invested in VALIS because their software improves the sorting process of mixed metals and allows domestic processors to maximize the resale value of the outputs, keeping more metals in local circulation. By capturing data on commodity prices and input materials and delivering high-value insights on material and processing trends, they help optimize sortation processes to capture the most valuable metals that might otherwise be overlooked. With more optimized and predictable sortation, processors can command higher prices for higher quality outputs.

As the U.S. faces an extreme shortage of critical metals that are required for the renewable energy transition, solutions like this are increasingly important. Copper, nickel, aluminum, graphite and steel among others are seen as critical and are expected to be in . Many companies have now mandated chain-of-custody and fair labor validation of the minerals and metals used within their supply chains. VALIS helps create lower cost, resilient and transparent supply chains for these metals domestically––and focuses on metal recovery from current waste streams rather than incremental extraction. This provides multiple benefits including reducing waste, enhancing local economies and lowering the emissions footprint of the recycled metals.

Overall, VALIS helps recover more pure metals from our existing waste streams, reduces the complexity of the end products that are being sold for the next stage of processing and can help get metals back in circulation faster. They do all of this, while providing the traceability that’s so essential in today’s critical mineral supply chains. VALIS is improving the business case for scrap processors today, while creating new opportunities for greater material recovery from the urban mine. It makes economic sense. It makes emissions sense. And yes, it makes material sense. That’s the circular economy.

About Closed Loop Ventures Group at Closed Loop Partners

Closed Loop Partners is at the forefront of building the circular economy. The company is comprised of three key business segments: its investment arm, Closed Loop Capital Management; its innovation center, the Center for the Circular Economy; and its operating group, Circular Services. Closed Loop Capital Management manages venture capital, buyout private equity and catalytic private credit investment strategies. The firm’s venture capital group, the Closed Loop Ventures Group, has been investing early-stage capital into companies developing breakthrough solutions for the circular economy since 2016. The Closed Loop Ventures Group’s portfolio includes companies developing leading innovations in material science, robotics, agritech, sustainable consumer products and advanced technologies that further the circular economy. Closed Loop Partners is based in New York City and is a registered B Corp. Closedlooppartners.com.

About VALIS Insights

VALIS Insights is building AI-powered software that makes recycling more profitable, material supply chains more sustainable and closes the loop on a circular economy for metal fabrication. With VALIS technology metal recyclers gain visibility into their material quality and make data-driven process decisions to extract more value. Founded in 2022 by experts in metal recycling and data science, VALIS is dedicated to delivering the software and data solutions needed across the recycling value chain to ensure the materials of yesterday are properly recovered for the manufacturing of tomorrow. For more information visit https://www.valisinsights.com/.

This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Partners or any company in which Closed Loop Partners or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Information provided reflects Closed Loop Partners’ views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision.

February 28, 2024, New York, NY — Today, the Composting Consortium, an industry collaboration led by the Center for the Circular Economy at Closed Loop Partners, released an unprecedented report on compost contamination, Don’t Spoil the Soil: The Challenge of Contamination at Composting Sites. The report reveals first-of-its-kind data on the amount of contamination at U.S. composting facilities, and the significant cost to manage it. Working with composters across the U.S., the Consortium’s in-field study quantifies contamination rates in feedstock and finished compost, highlighting a need for policy, innovation and packaging design to help composters improve contamination mitigation and strengthen organics recovery processes.

The report is released at a critical time for the composting industry, as pressure increases around the growing food waste crisis in the U.S. Today, nearly 40% of food is wasted and sent to landfill in the U.S.––at a loss of $430 billion––and only about 4% of all post-consumer food waste generated by Americans is sent to composters. Organics collection and infrastructure is one key solution to the crisis. To meet growing demand, the U.S. composting industry is shifting. While most composting facilities in the U.S. still only process yard trimmings, curbside organics collection has surged by 49% since 2021. Composter feedstock acceptance policies are also slowly shifting to match demand, with approximately 145 full-scale compost facilities in the U.S. now accepting food waste and some forms of food-contact compostable packaging—that packaging can be a key vessel for diverting food waste to compost, if recovered at composting facilities.

There is eagerness among compost manufacturers to be a part of the food waste solution, but concerns about contamination risks in the organics stream continue to be the one of biggest barriers to greater acceptance of food waste and food-contact compostable packaging. Concerns are increasing amidst the growing volume of compostable packaging in the U.S., largely due to look-alike, non-compostable packaging inadvertently entering the composting stream due to unclear labeling and confusion among consumers. This creates operational and financial challenges for haulers and composters, hindering further acceptance of food waste across the country.

Before the Composting Consortium released this report, there was little to no publicly available data on the amount and types of contamination in feedstock or finished compost products, or the time and money spent by composters to manage contamination at their facilities. To support the composting industry in its transition to accept food waste and food-contact compostable packaging, the Composting Consortium set out to address this data gap by conducting a first-of-its-kind study with 10 leading composters of varying sizes across the continental U.S., capturing a geographically and operationally diverse dataset on contamination volumes and decontamination practices.

The study measures and characterizes contamination across different points of the composters’ processes––and analyzes the financial cost to composters to handle contamination. The study examines five commonly held assumptions about contamination and compostable packaging, and breaks down in-field realities in a data-backed and easy-to-follow format. Key findings include:

• Conventional plastic is the most common contaminant received by composters, making up an average of 85% of the contamination that composters receive, by volume;
• Despite diligent efforts to combat contamination, conventional plastic can persist in the finished compost; 4 out of 10 composters in the study had trace amounts of conventional flexible plastic in their finished compost;
• Contamination has a significant impact on the bottom line; on average, 21% of composter operating costs are spent on contamination removal;
• Most composters had contamination, irrespective of whether or not they accept compostable packaging; several factors contribute to the levels of contamination that a facility receives;
• Eight out of nine composters who accept compostable products in the study had no detectable amounts of compostable packaging in their finished compost.

The data confirms the pervasiveness of plastic contamination, and the need to further mitigate this challenge, both upstream and downstream in the composting value chain. It also highlights that more consistent and standardized compostable packaging design and labeling is needed to ensure that certified, food-contact packaging is properly sorted and recovered at end of life. In the same vein, non-compostable packaging should be distinct in its design and labeling to reduce the risk of conventional plastic packaging making its way into the organics stream. Composters must be supported and incentivized to accept food and certified food-contact compostable packaging, to ensure these materials drive value and circular outcomes to the composting industry.

“Addressing contamination is critical to paving the way for broader organics recovery as a key solution to the food waste crisis in the U.S.,” says Kate Daly, Managing Director of the Center for the Circular Economy at Closed Loop Partners. “The Composting Consortium’s findings shed light on the significant opportunities––and challenging realities––of composting in the U.S. today. This study lays the groundwork for future research and investment to scale end-of-life solutions for food and food-contact compostable packaging to drive circular outcomes.”

This study is an important snapshot of a pervasive challenge that affects the compost industry. This work represents the Composting Consortium’s continued efforts to break siloes and bring together the key stakeholders––upstream, midstream and downstream––to remove barriers and advance a circular economy for organics and compostable packaging. Addressing contamination requires enhancing transparency, intensifying educational efforts and championing innovation. Additional research and collaboration across the entire composting and compostable packaging ecosystem can help pave the way for a circular future, turning food waste into a valuable resource and relieving composters from the burden of contamination.

About the Composting Consortium

The Composting Consortium is a multi-year collaboration to pilot industry-wide solutions and build a roadmap for investment in technologies and infrastructure that enable the recovery of compostable food packaging and food scraps. The Composting Consortium is managed by Closed Loop Partners’ Center for the Circular Economy. PepsiCo and the NextGen Consortium are founding partners of the Consortium. Colgate-Palmolive; Community Impact at Danaher; Eastman; The Kraft Heinz Company; Mars, Incorporated; and Target Corporation joined as supporting partners, and the Biodegradable Products Institute, the US Composting Council and the U.S. Plastics Pact joined as industry partners. Our compost partners for the Contamination Pilot include Ag Choice, Atlas Organics, Black Earth Compost, Dirt Hugger, The Food Bank at Dayton, Happy Trash Can Compost, Napa Recycling, Specialized Environmental Technologies (SET), Veteran Compost, and Windham Solid Waste Management District. Our advisory partners include 5 Gyres, Foodservice Packaging Institute (FPI), ReFED, Compost Research and Education Foundation (CREF), the Sustainable Packaging Coalition (SPC), Compost Manufacturers Alliance (CMA), Eco-Cycle, University College London (UCL), Western Michigan University (WMU), University of Wisconsin-Stevens Point and World Wildlife Fund (WWF). Learn more about the Consortium at closedlooppartners.com/composting-consortium/

About the Center for the Circular Economy at Closed Loop Partners

The Center for the Circular Economy (‘the Center’) is the innovation arm of Closed Loop Partners, a leading circular economy-focused investment firm in the U.S. The Center executes research and analytics, unites organizations to tackle complex material challenges and implement systemic change that advances the circular economy. The Center for the Circular Economy’s expertise spans circularity across the full lifecycle of materials, connecting upstream innovation to downstream recovery infrastructure and end markets.

Roughly one-third of the world’s food is wasted each year––a loss estimated at $230 billion. Nearly 60% of the uncontrolled methane emissions from municipal landfills are caused by discarded food, highlighting its significant impact on the environment. To address the urgent food waste and climate challenge, demand for organics circularity is rising, and with it, the volume of food-contact compostable packaging––a market poised to grow 16% annually in the U.S. until 2032, 4x faster than traditional plastic packaging.

Certified, food-contact compostable packaging can enable the diversion of food waste from landfill and support a circular economy. If food packaging filled with food scraps is properly recovered and sent to composting facilities, then this food wouldn’t end up emitting greenhouse gases in landfills. The food and packaging would also be converted into nutrient-rich compost. But if certified compostable packaging is not appropriately collected and processed into compost after it’s used, more waste is created.

We often hear that there is a lack of recovery infrastructure for compostable materials. The reality is, U.S. composting infrastructure is in the middle of transitioning from processing just yard waste to accepting more types of inputs, including post-consumer food waste and food-contact compostable packaging. Today, 70% of the 200 full-scale composting facilities that process food waste already accept and process some forms of compostable packaging. Plus, 15 million Americans have access to organics collection, a dramatic 49% increase in access since BioCycle’s last survey in 2021.

For food-contact compostable packaging to be successful in the market today, labeling and design need to be aligned so that consumers throw packaging in the right bin, and composters can easily process these materials. Yet, data shows that some labels confuse consumers, who mistake packaging as compostable when it’s not, or misunderstand where to dispose of that packaging at the end of its use.  

Without policies that drive clear, standardized labels and instructions on where compostable packaging needs to go after it’s used, a lot of it ends up in landfills or contaminating recycling streams. Conversely, non-compostable look-alike products and packaging can make their way to compost facilities where they end up contaminating the soil. These look-alikes are the primary contamination challenge in the organics stream.

To address this challenge, the Composting Consortium, led by the Center for the Circular Economy at Closed Loop Partners, and the Biodegradable Products Institute (BPI) embarked on a joint study to test different packaging label and design approaches, and how these inform consumers’ assumptions on what to do with compostable packaging after it’s been used. The findings can inform policies that better support labeling practices and standards for both compostable and non-compostable packaging. In the U.S. today, five states have compostable packaging labeling laws, including Washington, California, Colorado, Minnesota and Maryland. Other states, like Virginia and New Jersey, recently introduced laws that would establish recycling labeling requirements.

Until this study, this information on American consumers had not been publicly available.  The Composting Consortium and BPI released the findings in a first-of-its-kind industry report. Here’s a snapshot of what the data reveals:

• Nearly 1/3 of respondents say they would place compostable packaging in the recycling bin

Compostable packaging is not designed to be recycled at a material recovery facility (MRF) and can contaminate the recycling stream if intermixed with fossil fuel-based plastics. Compostable packaging that mistakenly ends up in recycling streams loses a significant portion of its value and creates a contamination challenge that impedes the recovery of valuable recyclable materials. Cross-contamination of the recycling and composting streams is an expensive operational challenge and would pose significant risk to both industries. Brands that have set ambitious sustainable packaging goals are also impacted by inadequate collection and processing of these materials.

Our recommendation: Brands and municipalities should work together on educational campaigns and clear, on-pack messaging.

• Up to 50% of respondents say they would place packaging labeled as “made from plants” in the composting bin

“Made from plants” describes the materials used to make the packaging, not where the package should go at the end of its use. In fact, “made from plants” claims are commonly found on plastic packaging that should be recycled (i.e. PET made from ethanol derived from corn). Our study found that American consumers are especially confused by products and packaging that are not actually compostable yet have green or natural coloring, green tinting, or make claims such as “made from plants” without any context or disclaimer language. These plastic, non-compostable materials are virtually indistinguishable from their compostable counterparts.

Our recommendation: Brands and policymakers should support labeling policies that standardize clear, consistent consumer communications, design and labeling.

Source: Alamy

• Adding a trusted certification logo and larger “compostable” call out increases consumers’ ability to identify packaging as compostable by up to 22%

Our study finds that using at least two to three design elements that call out compostability on food-contact compostable packaging, such as the BPI certification mark, the intentional use of tinting and coloring, and a more prominent “compostable” call out, is most effective for consumer understanding.

Our recommendation: Brands and manufacturers should refer to the Composting Consortium’s latest report and BPI’s Industry Labeling Guidelines for specific examples of packaging design strategies that improve consumer identification, increase recovery of compostable materials and mitigate contamination at facilities.

Coming this month: A new report from the Composting Consortium on contamination rates at different composting facilities! Sign up for a webinar to learn about our findings here!

Without standardized labeling, misleading designs and claims will continue to cause consumer confusion. This research provides insights to brands, manufacturers, consumers, policymakers, municipalities, composters and other stakeholders on effective design and labeling techniques that could improve the diversion of food-contact compostable packaging to the right material stream. While these new findings shed light on the issue, this is just the beginning. As the composting space rapidly evolves, complementary studies will be critical to advancing the recovery of compostable packaging––a critical path to reducing food waste and greenhouse gas emissions.

Learn more about these findings in the latest report from the Composting Consortium and BPI here: https://www.closedlooppartners.com/research/us-consumer-perception-of-compostable-packaging/.