Is Advanced Recycling a Boondoggle?
By Clare Goldsberry | 5/19/21 | Plastics Today
Is it any wonder that so many startups promoting alternative recycling technologies that promise to cure the plastic waste “crisis” are beginning to fall out of favor with investors? Could it be that they haven’t proven they can create any actual value? Currently, there are some 40 advanced recycling technology companies that have made a lot of promises about what they can do and touted large-capacity manufacturing plants, but there doesn’t appear to be much in the way of actual products coming from these plants. Even Greenpeace, which I don’t often agree with, has been tracking these companies in its report, “Deception by the Numbers.”
To create value in a business, first you need to find the value proposition. Is your idea a solution to a problem? Does it fill a niche or a need? Value creation is one of the most difficult parts of setting up a business, because you have to determine what that value is and whether your potential customers also recognize its value.
Plastic has long been of value to the world. Early plastic materials replaced whale bone in women’s corsets, replaced ivory in piano keys, and allowed innovation for literally millions of new products in both durable goods and disposables. Plastics have made food safer, replacing tin cans welded along the seams with lead, which used to kill people. So, what is happening in the world of advanced recycling that has caused so much fallout with investors over the past eight months?
Thrown for a “Loop”
First it was Montréal-based Loop Industries. Following an investigation, short-seller Hindenburg Research concluded that the company’s advanced recycling process was anything but novel and there was virtually no way to scale it to the extent needed to fulfill demand by the large CPGs the company claimed it had partnered with to supply rPET material.
Within the last three weeks, two more advanced recycling companies were in the crosshairs of investment groups. Danimer Scientific is accused of having problems similar to Loop — an inability to produce any real product. Nodax, the trade name for Danimer’s biopolymer, is made from enzymes using canola oil.