Canada-based PET recycler Loop Industries and Reed, a European investment firm, have signed a non-binding memorandum of understanding (MOU) to commercialise Loop’s chemical recycling technology in Europe.
Reed intends to provide €60 million in funding that doesn’t require Loop Technologies to give up equity or ownership. Half the funding will be invested in a proposed joint venture between the two companies, whilst the other half will be invested in commercialising Loop’s technology. The joint venture will also invest in projects across Europe using Loop’s technology, including the project already announced in Saint-Avold, France.
Loop uses a no-pressure, low-heat process to break down PET and polyester fibre into monoethylene glycol (MEG) and dimethyl terephthalate (DMT), monomers that can be polymerised back into their original form. The company claims that its Infinite Loop depolymerisation technology allows for PET and polyester fibre to be recycled infinitely without quality degradation. According to an independent life cycle assessment (LCA), Loop’s PET resin has up to 79% less global warming potential than virgin PET and has up to 67% less primary energy demand.
“We believe that this partnership, which combines Reed’s extensive financing relationships and experience in the development of major capital projects with Loop’s innovative technology, will be invaluable in the next stage of Loop’s strategic development, and maximise our opportunity to penetrate the European market as brands adapt to increasingly stringent regulatory requirements for plastic recycling,” said Daniel Solomita, founder and CEO of Loop Industries.
Under upcoming European legislation, PET bottles will have to contain at least 25% recycled content from 2025, and at least 30% from 2030. European associations expect high-quality recycled PET will be in short supply by then.
Loop Industries, Suez, and SK Geo Centric plan to build the first Infinite loop plant in Europe at the Saint-Avold site. The planned capacity is 70,000 tonnes per year. The three partners aim to start construction work in early 2025 with plant commissioning slated for 2027.
In 2020, Loop Industries dealt with negative stories about the viability of its chemical recycling process.
On Oct. 13, 2020, Hindenburg Research LLC published a report that it said was based on interviews with former Loop employees, litigation records and other research that questioned Loop's technology. Hindenburg said it shared its findings with regulators.
On Oct. 16, 2020, Loop disclosed that it had received a subpoena from the U.S. Securities and Exchange Commission for details on its technology.
Loop has defended its depolymerisation technology and said Hindenburg's accusations were inaccurate. Loop said Hindenburg holds a short position on Loop stock and said the conclusions in the Hindenburg report are either wrong or based on its first-generation PET recycling technology.