An initiative designed to stimulate a circular economy for flexible packaging in the Upper Midwest area of the United States has been awarded funding by two of the funds managed by circular economy investor Closed Loop Partners. Its Closed Loop Infrastructure Fund and Closed Loop Circular Plastics Fund have committed $5 million to establish a flexible film recycling plant in Minnesota.
The project, which is being led by MBOLD, a coalition of companies, institutions and nonprofit organisations in the region working to address challenges and to foster innovation in issues relating to food and agriculture research, aims to grow the recycling infrastructure in order to reduce the use of virgin plastic, cut waste and increase the supply of recycled materials available for use. MBOLD members General Mills, Schwan’s Company, Target, Ecolab, Cargill, Land O’Lakes, Inc. and the University of Minnesota are collaborating across the value chain with film recycler Myplas USA, Inc. and film manufacturer Charter Next Generation.
The project will see Charter Next Generation purchasing recycled resin from Myplas, enabling the company to broaden its portfolio of sustainable film products. MBOLD members Cargill, General Mills, Schwan’s Company, Land O’Lakes and the University of Minnesota will evaluate potential product applications using recycled resin with Charter Next Generation. Land O’Lakes, Cargill, Schwan’s Company and the University of Minnesota will explore opportunities to direct film waste to Myplas USA for recycling once the plant is operational.
The facility will be the first in the United States for South African recycler Myplas. Slated to begin operations in spring 2023, a new 170,000-square-foot mechanical recycling plant is planned that at full capacity will be able to process close to 41 thousand tonnes (90 million pounds) of PE flexible packaging waste into LDPE and HDPE recyclate annually.
“There is growing demand for recycled polyethylene across the value chain, yet only 11% of polyethylene film is recovered in North America today,” said Ron Gonen, Founder & CEO of Closed Loop Partners. “This new facility is an important piece of circular economy infrastructure needed to develop local market capacity to manage hard-to-recycle plastics.”
The U.S. uses anywhere between 5.5 and 7 million tonnes (12-15 billion pounds) of flexible packaging and films annually. An estimated five percent of the flexible films used are recycled each year, with the rest being landfilled, incinerated or even released into the environment.
“We are building a regional ecosystem to support circular approaches for flexible film,” said JoAnne Berkenkamp, managing director of MBOLD.
Compared with virgin plastics, studies show that use of recycled polyethylene resins offers significant life cycle benefits, including a 65 percent reduction in total energy used, a 59 percent reduction in water consumption and a 71 percent reduction in global warming potential.
In addition to the $5 million from the Closed Loop Partners’ funds, the initiative is also being backed by a combined $9.2 million equity investment in Myplas USA by lead investors General Mills, Schwan’s Company and Wisconsin-based film manufacturer Charter Next Generation, and supporting investors Target and Ecolab. The Alliance to End Plastic Waste is also providing multi-million dollar debt financing to Myplas USA to support development of the new recycling facility, while the Minnesota Department of Employment and Economic Development is supporting Myplas USA through $1 million from the Minnesota Investment Fund and $450,000 from the Minnesota Job Creation Fund.
“Myplas has a deep passion for plastics recycling, and we’re proud to establish our first U.S. plant and our U.S. headquarters in Minnesota,” said Andrew Pieterse, Myplas USA chief executive officer. “Our partners’ commitment, investment and innovative thinking, paired with Myplas’ technical expertise, will be transformative for the entire region. We can’t wait to get started.”