Analyst Take: The EU implemented legislation around packaging recycling, targeting a ban on single-use plastic and implementing strict criteria to ensure that all packaging is recyclable by 2030. The regulation will be positive for companies developing circular packaging solutions, with anticipated demand from sectors such as consumer goods, foodservice, and ecommerce. Other regions may also follow the precedent set by the EU. For instance, even the US is yet to introduce a national-level sustainable packaging direction, apart from a few city- and state-level laws.
Analyst Take: The recycled electronic waste segment continued to generate the most funds (~47% of the total raised), but there was a notable uptick in funding across bio-based industrial materials and the other recycled materials segment led by several large rounds (from Natureworks, CIRCTEC, and Spectro Alloys). Debt accounted for ~55% of total funds raised during the quarter, led by large rounds from Umicore (~USD 531.5 million) and NatureWorks (USD 350 million). Several rounds (~15% of the total rounds) were earmarked for overseas facility expansions including textile recycler Syre, bioplastic manufacturer NatureWorks, and bio-based fiber company Bcomp, which announced plans to expand into Asia.
Analyst Take: Circular Materials product launches were geared toward a range of applications from bioplastics, textiles, packaging, and battery metals recycling. Battery recycler Lithion Technologies and bio-based leather manufacturer Beyond Leather Materials commercialized their products. The majority of launches in Q2 were observed within the bio-based materials space. NatureWorks, which raised funding to establish a bioprocessing facility in Thailand, also unveiled bio-based compounds for film packaging applications. Another highlight was Kari-Out’s launch of what it claims is the industry’s first bio-based, fully compostable packet for single-serve condiments in foodservice applications. Activity in the battery recycling space continued to slow down, with just two launches this quarter (cf. four on average per quarter in 2023). As highlighted in our Q1 2024 report, we believe activity is likely to pick up in the latter part of 2024 and beyond, considering the number of battery recyclers who began constructing new facilities in 2023.
Analyst Take: We observed an uptick in product and service collaborations across our coverage in Q2 2024, matching the peak activity levels seen in Q3 2023. Around 33% of these were sales partnerships, indicating a healthy share of commercial activity during the quarter. We also observed cross-border partnerships focusing on Asia in the circular plastics (Carbios), battery materials (Volvo), and textile recycling (Circ) segments, echoing a trend we observed in funding. Q2 also featured several brand collaborations with large-scale manufacturers, with highlights including Cadillac for bio-based leather interiors, Jack & Jones for bio-based apparel, Kraft-Heinz for bioplastic food packaging, Coty Paris for bio-based cosmetic packaging, and Daimler for EV battery recycling.
Analyst Take: We observed four key acquisitions in Q2 2024 (cf. one in Q1 2024). All acquisitions were made by incumbents in the recycled materials space to expand their recycling capacities and footprint. The target companies operated across recycled plastics (Integra Plastics and Circulus), recycled industrial materials (Angelo's Recycled Materials), and recycled metals (Refrattari Trezzi). GFL Environmental’s acquisition of Angelo's Recycled Materials is noteworthy, as it is part of GFL’s ongoing debt deleveraging campaign while seeking to build investor confidence.
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