A "future" industrial sector?

When you read the press release from the giant Procter&Gamble ($65B in sales, after all!) announcing a bottle made from ocean plastic for its household cleaning products, you'd think that, at last, we're going to clean up the oceans industrially! But on closer inspection, this bottle is only made from 10% Ocean plastic, and that's just one product (a dishwasher).

350M tonnes of plastics produced worldwide in 2019, creating 240M tonnes of waste. Of all kinds: monomers, polymers, multi or monolayers, flexible or rigid, colored or translucent, PET/PVC/ etc... They're everywhere in our daily lives, and eliminating them completely today is a losing battle for the consumer. Of this 240M tonnes of waste, between 8 and 10M tonnes end up in the oceans every year. An estimated 150M tonnes of plastic are stored in the oceans today.

What does 150M tonnes mean? It means that at least half of all wild fish have plastic in their guts, which means that when you go to the fishmonger, you have a 1 in 2 chance of ingesting plastic!

Current commitments (by politicians, industrialists and associations) are not up to the challenge: they will only enable a 7% reduction in discharges by 2040, with almost 30 million tonnes discharged into the sea every year by 2040.

As in any complex system, there is no single solution. What we need to do now is to implement a series of strong actions to succeed in reducing this pollution, which is going to kill life in the oceans, and therefore on land.

• Reducing the use of plastics: We all know of examples where plastics are over-used: over-packaging, all-you-can-eat bags, disposable containers, etc. Various studies show that this use could be reduced by 30%.
• Substitution for plastics: paper and other compostable materials can reduce plastics by 17%, without increasing packaging costs.
• Improving collection and treatment: collection areas are still poorly controlled and allow a lot of plastic to "leak". Of the 10 million tonnes of plastic waste in the oceans, 61% comes from non-collection and 39% from leakage after collection.
• Plastics recycling : only 20% of plastics are recycled today, as recycling remains costly. It is possible to increase plastics recycling to 54% with a few simple changes, and make the recycling process more profitable. For example, removing color pigments from plastics would increase the value of recycled plastic by 25%.

A superb study by systemIQ shows that by launching these various initiatives simultaneously, we could reduce the amount of waste discharged into the oceans by 80% by 2040.

But who can believe that there is a worldwide political consensus at the same time to act, regulate and legislate on plastics? Nobody! But if this pollution were to become a business opportunity, if recycling were to become profitable or even very profitable, if investors were to integrate SDG14 into their due-diligence, then manufacturers could become leaders in ocean protection without waiting for governments?

Doing business with plastic waste?

Collection

Veolia achieved sales of $200M in 2017 with recycled plastics and has announced a target of $1B for 2025. And it's investing in tech (artificial intelligence) to get there!

Paprec, France's leading recycler, claims to recycle 12 million tonnes of waste, but only 300,000 tonnes of recycled plastics (barely 3%!).

Collection is still too costly for many countries, and significantly reduces the profitability of the recycling sector. In developed countries, local authorities (and, in fact, local residents through their local taxes) bear the cost of collection. But if these costs are reintegrated into the overall financing of recycling, the latter loses $293 per tonne. In low-GDP countries, plastics are mainly harvested from PET and HDPE, which have a higher selling price. Combined with lower labor costs, recycling becomes profitable at $51 net profit per 1t of recycled plastic.

The Transformation

A little further from home, in Quebec, we can't help but be enthusiastic about Loop Industrie, a Nasdaq-listed company since 2017. Loop has developed an industrial recycling process for PET that consumes less energy and produces recycled plastic with the same properties as new plastic: same purity, same physico-chemical properties. And infinitely so. The innovation seems to lie in their ability to recycle polluted plastics that are not easily recyclable today: colored plastics, thermoformed plastics, carpets, clothing... This ability to swallow almost any plastic should increase the recycling of ocean plastics. Loop licenses its technology to major industrial groups. In France, they have signed partnership agreements with L'Oréal, Suez and l'Occitane. Given the stress on the recycled plastic market and consumer demand, we can only expect the value of their stock on the stock market to soar!

We took Loop Industries as an example, because they have signed significant agreements with CAC 40 companies, but there are other companies on the same roadmap, such as Envision Plastics.

Two other leading European plastics recycling companies are the Italian Aquafil Group, which produces environmentally-friendly nylon(Econyl) from large-scale waste materials such as fishing nets and carpets. Aquafil's commercial focus is on ready-to-wear and interior materials.

More specifically dedicated to recycling plastics caught in the Ocean, Danish company Pack Tech launched the " Ocean Waste Plastic " project in 2013. They use this ocean waste to make primary packaging. Their goal is to recover 4,000 tonnes of ocean plastics by 2020 for their packaging. This is obviously modest compared with the millions of tons dumped in the oceans, but the appeal lies in their desire to set up a complete industrial chain, from waste to finished product.

SEAQUAL certification

Finally, the Spanish association SEAQUAL has developed a kind of standard/certification to validate industrial processes that manufacture recycled plastic fiber and whose communication is focused on cleaning up the oceans. However, given the difficulty of recycling ocean plastics, their specifications only require 10% ocean plastics. Despite this, they have succeeded in making their "brand" a benchmark, with over 530 SEAQUAL-certified companies in 46 countries. Depollution remains modest in relation to the stakes: 600 t of Ocean plastics removed!

What about start-ups?

Start-ups have a habit of wanting to change the world, don't they? Well, here's a great subject for them: removing plastic from the oceans! In a previous blog, we talked about investor incubators to encourage the emergence of Ocean start-ups. In France, we're seeing a wave of entrepreneurs working downstream in the recycled plastics chain. Most are looking to create ready-to-wear brands. To name but a few:

• Momem' s first products, swimwear, were a great success.
• Hopaal, a start-up based on the Basque coast, develops a wide range of men's and women's clothing,
• Corail, which makes sneakers from plastic bottles recovered from the Mediterranean Sea
• Awake Concept, which makes watches with fishing net straps.
• Or, a little more anecdotal, Adaoz Wave, which makes surf and paddle fins from recycled plastic. Even if this doesn't "change the world", it does help to raise awareness and promote the industry.

Last but not least, we can't overlook the amazing work of start-up 4ocean, which has already fished out nearly 5M tonnes of plastic in Asia and the Caribbean in 6 years, all by hand! It is, by far, the company that has harvested the largest volume of plastics from the oceans, turning fish-fishermen into plastic-fishermen.

Bibliographic resources

One of the first foundations to focus on the circular economy was the Ellen McArthur Foundation. Created in 2010 by the famous yachtswoman, this foundation has become a benchmark in the field, with a team of 127 employees and industrial and public-sector partners around the world. A wealth of studies and work by this foundation can be freely consulted here.

Conclusion

The demand for recycled plastics is undeniably growing, whether they come from the oceans or the continents. Industrial groups are developing innovative processes to meet this demand, and an industry is emerging. This demand increases the value of this material, which becomes a raw material, but at the same time makes new plastic less expensive as the price of oil falls. Will these "recycled plastic" or "seaqual certified" labels be sufficiently valued by brand marketing departments to offset this extra cost?

Mc Kinsey forecasts that demand for plastic will continue to grow, but that 60% will be recycled plastic.

Having said that, we still don't have the ideal solution for eliminating the discharge of plastics into the ocean, or for cleaning them up completely. Land-based pollution will continue to pollute the oceans, and we'll certainly have to get used to seeing animal species killed by plastics and eating plastics ingested by wild fish. Perhaps fish from organic aquaculture can be protected from this pollution by new netting and filtration technologies.