Waste polyester recycling company Poseidon Plastics Ltd. has cleared the first hurdle towards reaching its goal of issuing up to £200 million of Certified Climate Bonds to generate the funding it needs to advance, among others, plans for the construction of its Teesside demonstrator facility.
The company has been awarded certification under the global Climate Bonds Standard, a multi-sector standard overseen by the Climate Bonds Standards Board that allows investors and intermediaries to easily assess the climate credentials and environmental integrity of bonds and other green debt products. Any bond or loans for which certification is sought must meet rigorous scientific criteria to ensure they are consistent with the 2 degrees Celsius warming limit in the Paris Agreement. The Climate Bonds Standard and Certification scheme was developed and is administered by the international Climate Bonds Initiative. It is the only international labelling scheme for green bonds and green loans and today is used globally by bond issuers, governments, investors and the financial markets.
A first for a European plastic recycling business, this certification provides verification that Poseidon’s bonds will comply with international best practice for climate integrity, management of proceeds, and transparency. Products that meet the requirements of the Standard may be granted certification prior to their actual issuance. The Climate Bonds Standard Board confirms Climate Bonds Certification once the bond has issued and the proceeds have been allocated to the projects and assets.
Poseidon intends to launch up to £200 million of Certified Climate Bonds. The company says it will use the proceeds to fund the design and construction of a continuous demonstrator facility based on its advanced recycling technology that converts polyester waste into recycled raw material to produce its virgin-like food-grade ‘enhanced recycled’ - or ‘er’ - PET. The company will then build its first integrated 75,000 tonne per annum commercial erPET facility in the Northeast of England.
Poseidon’s low temperature, low-pressure process involves returning PET waste to the monomer level before reconverting this into high-grade quality polymers. Simple and robust, the process is easily scalable with the potential to deliver the feedstock requirements
The first commercial facility will act as a blueprint for Poseidon’s global expansion with multiple locations planned in the European Union and the United States to meet the company’s target of one million tonnes of recycled erPET by 2027.
The Bond offering will complement the Company’s intended reverse take-over of Curzon Energy, which is listed on the Main Market of the London Stock Exchange. By offering Green Bonds, as well as equity during the RTO process, the Company expects to have access to the external funding required to support a rapid global commercialisation of industrial volumes of erPET.
Once launched, the bonds will also help to meet the demand for environmentally and socially focused projects and assets.
As the eyes of the world turn towards Glasgow for COP26, demand for high-quality, sustainable debt instruments remains significant, noted Lasse Wågene, CEO Poseidon Plastics. “It is only through the growing partnership of capital markets with innovative green businesses like Poseidon that the world’s economies can meet their essential climate targets”
According to market data of the Climate Bonds Initiative, an estimated $1.45tn has been issued in green, social and sustainability bonds since 2006, with $360bn issued this year alone. To date, over 389 companies have achieved Climate Bonds Certification including UBS, SNCF, Porsche, and Volkswagen.