It was my great pleasure to attend Circularity 19 — the largest circular economy conference in North America — held last week in Minneapolis. The two and a half days I spent in Minnesota offered me the chance to speak with some smart and inspirational entrepreneurs, ask questions to executives at SABIC, Dow, General Mills, Apple, and 3M about what large companies are doing to move toward a sustainability, and learn about everything from clothing recycling to regenerative agriculture.

Many people at the conference were talking about plastic – arguably the most important material in today’s consumer economy. Plastic is a modern wonder – lightweight, flexible, and tough – perfect for holding everything from carbonated drinks to frozen dinners to houseplants. The big problem is the waste created after its use – a problem I mentioned in the article Feeding the World With Plastic.

According to one of the conference speakers from the National Geographic Society, nine million tons of used plastic finds its way to the ocean every year, collecting into enormous floating islands, being eaten by ocean animals, and breaking down into microparticles that find their way into our food.

By the year 2050, humans will have manufactured 50 billion tons worth of plastic – most of it only used a single time before being discarded. Only a small proportion of the plastic will be recycled, a proportion that may be getting smaller now that China halted imports of waste plastics.

Because of the negative effects on the natural world, plastics are a big concern of environmental groups, and I was surprised to hear that none other than World Wildlife Fund (WWF) has researchers working on the issue. The WWF sent a team to the Circularity conference, and I got the chance to speak with one of the members, Ms. Alix Grabowski, who serves as the WWF’s Lead Specialist for Sustainability R&D.

 

Even though Ms. Grabowski’s specialty is bioplastics, I was surprised and happy to hear her say “Just because something says ‘bio’ doesn’t mean it is good for the environment.” She emphasized to me that understanding the system consequences of an entire value chain must be taken into consideration when talking about sustainability and circularity.

This systems perspective is formalized across WWF programs like the Bioplastic Feedstock Alliance (BFA) and the Cascading Materials Vision. The essence of these programs is to find opportunities to continuously improve the process of materials sourcing and product and packaging design to create plastic consumption efficiencies that cascade through the consumer value chain.

Real world examples of the operationalization of BFA and the Cascading Materials Vision are as numerous as they are impressive.

For instance, as a result of the WWF program, Ford found a way to use recycled materials and bioplastics to create lightweight automobile trim material. This initiative not only reduces the greenhouse gas (GHG) emissions associated with mining hydrocarbons and refining them into plastic, but also decreases GHG emissions due to the cars’ higher fuel efficiency.  Another excellent case is the development of Coca-Cola’s PlantBottle containers – which use plant-based plastics.

I also enjoyed meeting the founding team of a materials company based in Israel, UBQ Materials, and their executive team. UBQ, whose founding board member is also the founder of Sabra Hummus, manufactures a novel bio-based plastic material that uses raw food and organic waste as its primary feedstock.

UBQ’s process take household garbage and, through a patented conversion process, turns it into fully functional material that can be used in the manufacturing of durable products – such as deck material – and molded and extruded plastic parts – such as garbage cans or plastic pipes.

What’s more, UBQ’s team told me that their plastic products actually serve to permanently sequester carbon emissions – creating a sustainable thermoplastic material that is not just low-carbon or carbon-neutral, but carbon-negative.

The company is now working in expanding its operations commercial operations in the USA and in Europe.

The last company that caught my eye was SABIC – Saudi Basic Industries Company – the third largest chemical company in the world that recently announced it would be acquired by oil giant Saudi Aramco.

The reason SABIC caught my eye is that I know they have a joint venture with an English firm called Plastic Energy to create a “chemical recycling” plant in the Netherlands that will turn plastic from a linear economic source of waste to a circular economic renewable resource.

The essence of the chemical recycling of plastic is different from the “mechanical recycling” that most people know. Mechanical recycling is the process of cleaning, chopping, and melting down of used plastic to create uniform plastic pellets that can be melted down with virgin plastic and reformed into a new plastic good.

Chemical recycling through a process known as pyrolysis heats plastic under pressure in an anaerobic environment in a way that breaks the plastic down into its component hydrocarbons. The result of this process is plastic feedstock – undistinguishable from that coming out of a refinery – ultra-low-sulfur diesel fuel, and several other useful industrial products.

In a sense, chemical recycling would be the equivalent to taking used paper and, rather than making cardboard out of it, turning it back into raw timber.

Pyrolysis is not a new technology – Chinese firms have converted used car tires to fuel and kerosene for years – but the process can be dirty and difficult when different types of plastics are mixed together. There were several good programs at the conference dealing with chemical recycling, and there are some big names in the chemicals business, including SABIC and Dow, that are looking at ways to improve the commercial potential of pyrolysis.

Even though plastic was a topic on many people’s lips during the conference, I also learned about some fascinating innovations in the recycling of paper and fabric fibers. I’ll cover those discussions in my next article.

I was happy to attend this conference, talking to people who know, as I do, that the only way to build and maintain intergenerational wealth during this century will be by investing in a new paradigm. Intelligent investors take note.