Circular solution

Advancing the Circular Economy and Sustainable Development Goals

In today’s world, the need for long-term solutions to severe environmental issues is more pressing than ever. The United Nations‘ Sustainable Development Goals (SDGs) give a comprehensive framework for addressing these concerns. Resycure, a Startup in BASF‘s Venture Incubator, Chemovator, showcases the SDGs’ commitment by implementing solutions that support many major objectives—9, 10, 11, 12, 13, 14, and 17. Resycure is committed to accelerating the transition to a circular economy and minimizing global plastic waste. Its innovative business strategy promotes the use of post-consumer recycled (PCR) plastics and promotes sustainable practices across several industries.

Advancing the circular economy

Resycure introduces an innovative business model aligned with circular economy principles. The company forms enduring supply partnerships with Brand Owners, Converters, Manufacturers, and Packaging Suppliers across various sectors like food, cosmetics, and household cleaning. Resycure assists these enterprises in meeting their requirements for PCR plastics and reducing their CO2e footprint. Furthermore, Resycure plays a crucial role in promoting the global expansion of recycled plastic materials by providing favorable terms and minimizing commitments and risks for its clients.

Supporting Recyclers

Resycure’s platform benefits not only Brand Owners, Converters, and Manufacturers, but also Recyclers. Resycure attracts business clients for recycling companies by combining demand from multiple companies and attaining considerable volumes. Because of the growing demand, Recyclers can invest in sophisticated technology, improve the quality of recycled materials, and expand their production capacity. Resycure also connects Recyclers, technology suppliers, and finance choices, allowing them to address the needs of their new clients more efficiently.

Contributing to the Sustainable Development Goals (SDGs)

Resycure’s practices align with multiple SDGs. Objective 9 focuses on industry, innovation, and infrastructure, which Resycure supports by driving technological advancements in the recycling sector. Objective 10, reduced inequalities, is addressed through their efforts to create a level playing field for Recyclers and provide them with opportunities for growth. Resycure’s activities also contribute to objective 11, sustainable cities and communities, by promoting sustainable practices and reducing plastic waste. Objective 12 emphasizes responsible consumption and production, which Resycure facilitates by increasing the availability and usage of PCR plastics. Additionally, Resycure’s commitment to objectives 13 (climate action), 14 (life below water), and 17 (partnerships for the goals) further underscores their dedication to sustainability and collaboration.

Pioneering the circular economy and sustainable development

Resycure’s pioneering efforts in accelerating the transition to a circular economy and reducing plastic waste demonstrate their commitment to sustainable development and the SDGs. Through the Resycure platform, we enable Brand Owners, Converters, Manufacturers, and Recyclers to achieve their sustainability goals, while simultaneously contributing to a more sustainable and equitable world. By supporting objectives 9, 10, 11, 12, 13, 14, and 17 of the SDGs, Resycure serves as an exemplary model for the business community and inspires others to join the global movement towards a more sustainable future. Together, we can make a significant difference in creating a world where resources are used efficiently, waste is minimized, and environmental well-being is prioritized. 

Solving the recycled materials supply conundrum

In order to achieve their packaging sustainability goals, brand owners will require far more recycled material than they currently have access to. Michel Weinketz, CEO of Resycure (part of Chemovator), takes a closer look at this tension and the potential solutions.

According to “The 2023 Circularity Gap Report” by Circle Economy global circularity has decreased, going from 9.1% in 2018 to, in 2020 to 7.2% in 2023 as a result of increased material extraction. This creates a significant circularity gap because the world relies almost entirely on virgin materials. This indicates that more than 90% of materials are lost, wasted, or permanently locked into a stock that cannot be reused. From the report, it can be concluded that businesses and policymakers must take immediate action for a circular economy.

To accelerate the world’s transition to a circular economy, new business models should be designed by the industry for the industry with long-lasting results.

Actionable and immediate solutions must be taken: The move to recycled plastic

Brand Owners are being pressured by legislation and taxes to decrease plastic waste by designing packaging for recycling and using as little virgin plastic as feasible. This reduction is partially accomplished by reducing the weight of the packaging and switching to post-consumer recycled plastic and enhancing the circularity of product packaging are the among main requirements.

To accomplish their 2025 goal, however, more than 60 of the most influential Brand Owners are anticipated to still require an additional 6 million tonnes of recycled plastic annually. Implementing recycled plastic into packaging is often more expensive and difficult than using virgin plastic – things like regulatory requirements, processing characteristics, and material quality are often top of mind of brand owners and packaging converters. Furthermore, if the market is getting shorter what are the specific challenges for Brand Owners to purchase and secure volumes of recycled material?

There are five major challenges that nowadays Brand Owners are currently facing when attempting to buy recycled material in the market.

Intransparent markets create resource-intensive procurement activities

The lack of price transparency in the current market – which Recyclers can provide which grade to which volume, combined with a fairly fragmented market and a strong mix of small, medium, and a few large players – forces Brand Owners to invest in upstream procurement capabilities, that can prove time-consuming and expensive, in particular outside their core markets.

Lower procurement volumes from brand owners lead to low priority by recyclers

Many medium and large Brand Owners have relevant volumes for packaging; however, their PCR resin demand is often relatively low compared to the capacity of a recycling plant and also compared with the biggest Brand Owners that have huge volumes. This means that Recyclers are often not willing to invest in improving processes to meet the quality requirements of companies with low volumes or push them to the end of the line when a larger volume is available.

Long and complex qualification process

For Brand Owners and Recyclers, there is a long and complex process to identify, test, approve, and control recycled material quality, especially for use in food and cosmetics – this process can easily take over 12 months.

No harmonized specifications for both Recyclers and Brand Owners

There is no “standard” quality requirement for PCR defined for specific applications – each Brand Owner defines its own, which makes it harder for Recyclers to meet a multitude of different specifications for multiple clients. This also makes the procurement process much more complex – it becomes hard to compare products and price proposals.

Long-term demand is not secured

Many Recyclers are eager to invest and grow, however, they will not do so without securing long-term demand and relevant volumes to justify their own ROI. Most Brand Owners are not in the position to offer this security, either because they do not have enough volume in that particular region, or because it is too much of a financial risk to commit to a long-term supply agreement in a “take or pay” contract without knowing how its products will perform in the market.

These five challenges combined create a “chicken and egg” situation, that prevents Brand Owners and Converters to secure the volumes they need and also prevents Recyclers to invest and grow.

Solutions for brand owners to overcome challenges to buy recycled plastic and secure their PCR goals

It’s clear that legislation, industry associations, and EPR schemes will play a critical role in changing the situation. That being said, if we want to accelerate the change, we also need pragmatic, market-driven approaches that can deliver solutions in the short term, incentivize recycling and enable Brand Owners to transition to a circular economy and grow the market faster.

There is a need for neutral players that can work together with Brand Owners, Converters and Recyclers to break this chicken-and-egg situation. One example is Resycure, a German venture that is working to break the silos between the relevant players and wants not only to help companies in securing their long-term PCR volumes with no investments or large volume commitments but also leverage that to give security and a positive business case for Recyclers to invest.

Start-ups like that and fast-moving companies are in a perfect position to disrupt the market with innovative business models, giving it the boost it needs so badly.

Michel Weinketz is a Brazilian living in Germany for quite some time now. He has over 16 years of experience in the B2B and chemical industry and is one of the founders of Resycure, a startup in the circular economy that is part of Chemovator, the BASF venture incubator program.