Impact Paper Bagging Capital

Bagging Capital
Attracting Private Investments in Canada’s

Plastic Recycling Industry
Impact Paper | January 11, 2022

Contents
1 Key Findings Appendix A
2 Introduction 24 Methodology
3 Plastic: Types and Uses
Appendix B
4 Canada’s Plastic Recycling Industry: 7 Investment Trends
2
A Primer
6 Recycling Has Variants Appendix C
8 Bottlenecks 28 Bibliography
11 Privatizing Recycling Programs
11 Emerging Opportunities
13 Investment Prospects
17 Canada, the United States,
and the Netherlands
20 Package Deals: Bolstering Canada’s
Investment Prospects
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Key Findings
• Canada needs to implement recycled • Targets for plastic recycling should be set
plastic content mandates for non-food- for specific plastic types. These targets
grade products (e.g., toolboxes, garbage can spur investments in solutions that
bags). Such mandates can enhance the address difficult-to-recycle plastics such as
investment prospects and competitiveness chemical recycling.
of mechanical plastic recyclers.
• Material recovery facilities (MRFs) should
• Leading waste management firms are have minimum performance standards
well positioned to scale and invest in for the rate of contamination in plastic
the plastic recycling industry with the bales, with achievement supported by
right de-risking polices and incentives. multi‑stream recycling programs.
Governments will also need to disincentivize
• Preferential pricing for local recyclers
landfilling and regulate the control of plastic
relative to non-locals should be introduced
waste feedstock.
where feasible. This reflects the
• Extended producer responsibility (EPR) environmental and economic benefits of
programs involve assigning responsibility local recycling.
for the end-of-life management of products
• Waste management firms and early-stage
and packaging to their producers. EPR
financiers lead investments in Canada’s
programs in Canada should ensure that:
plastic recycling industry.
– recyclability and circular economy
• While investors are most active in chemical
principles guide the design, manufacturing,
recycling, the majority of transactions in
and procurement of plastics;
Canada involve risk-mitigation instruments
– business decisions by producers factor in
that do not provide growth capital for
the availability and capabilities of recycling
chemical recyclers.
infrastructure in Canadian markets;
– waste streams from industrial,
commercial, and institutional sectors
are included;
– EPR fees send a price signal strong
enough to change producer behaviour.
Bagging Capital
Attracting Private Investments in Canada’s Plastic Recycling Industry
Introduction
Life is wrapped in plastic.
From enabling food security and trade, to mitigating climate change1 and
delivering health care, plastics are the materials of convenience, efficiency,
and modernity. But Canada’s linear plastics economy is unsustainable.
Why is this system unsustainable? It is partly The capital required for infrastructure, technology,
due to the plastic recycling industry itself. and the growth of firms that will bring these
Fragmentation, volatility, and an uneven playing attributes to fruition will cost billions. For
field have led to sporadic investments and instance, diverting 90 per cent of plastic waste
capacity deficits. Over 3 million tonnes of plastic from landfills in Canada by 2030 is estimated to
waste are produced in Canada annually. Only require between C$4.6 and $8.3 billion in facility
9 per cent is recycled. 2 We can do better. investments.4 The plastic recycling industry is at
the heart of the circular plastics economy. With
Canada needs a circular plastics economy.
government coffers running extraordinary deficits,
This regenerative economy harnesses natural
the infusion of substantive private capital in plastic
resources sustainably and eliminates waste by
recycling will be instrumental.
design. It reuses and recycles its outputs and
adopts innovative business models with minimal This raises several questions. Who will invest in
environmental and social drawbacks.3 Canada’s plastic recycling industry? What forms
of investments will be made? What segments of
the plastic recycling industry do private investors
have an appetite for? If Canada’s Strategy on
Zero Plastic Waste5 is to yield tangible outcomes,
answers are needed soon.
1 Plastics are used to reduce the weight of vehicles, so they consume less energy for mobility. They are used to insulate homes
to increase their energy efficiency. Plastics are also used as composite materials in the blades of wind turbines to produce
renewable electricity.
2 Deloitte, Economic Study of the Canadian Plastic Industry.
3 Ellen MacArthur Foundation, “Concept.”
5 The Canadian Council of Ministers of the Environment (CCME) released Canada’s Strategy on Zero Plastics Waste in
November 2018. Taking a circular economy approach, the strategy has 10 action areas: product design, single-use plastics,
collection systems, markets, recycling capacity, consumer awareness, aquatic activity, research and monitoring, clean-up,
and global action. Additional details are available at https://www.canada.ca/en/environment-climate-change/services/
managing-reducing-waste/reduce-plastic-waste/canada-action.html.
2
The Conference Board of Canada
Plastics: Types and Uses this impact paper. The different types of (thermo)
plastics, their symbols, and applications are
Plastics are synthetic polymer materials that have provided in Exhibit 1.
a myriad of applications in our modern world.
In Canada, of the 9 per cent of plastics
Plastics are broadly divided into thermoplastics
that are recycled, about two-thirds involve
and thermoset plastics. Thermoset plastics are
polyethylene terephthalate (PET) and high‑density
challenging to recycle due to the nature of the
polyethylene (HDPE). (See Chart 1.) Other
bonds in their chemical structure, although some
plastics, such as low-density polyethylene (LDPE),
innovations are addressing this issue.
polystyrene (PS), and polyvinyl chloride (PVC),
Thermoplastics can be recycled. They also are hardly recycled in Canada.
account for over 75 per cent of global plastic
consumption.6 These plastics are the focus of
Exhibit 1
Plastics and Their Applications
Plastic Symbol Plastic Name Example Applications
Polyethylene Terephthalate (PET) Water and soft drink bottles; fibres for fleece fabrics
Bottles for cosmetics and cleaners; milk bottles, buckets, crates,

High Density Polyethylene (HDPE)
plastic lumber
Rigid packaging such as clamshells; flexible packaging such as deli

Polyvinyl Chloride (PVC) and meat wrap; building supplies such as pipe, siding, window frames,
and fencing
Bags for dry cleaning, frozen foods, and household garbage; coatings for
Low Density Polyethylene (LDPE)
paper milk cartons and beverage cups; toys; squeezable bottles
Containers for yogurt and margarine; medicine bottles; bottle caps and
Polypropylene (PP)
closures; fibres, appliances, and automobile applications
Takeout containers and dishes/utensils; protective foam packaging;

Polystyrene (PS)
electronic housings; thermal insulation; and plastic mouldings
Polycarbonates (PC), Acrylonitrile Butadiene Water cooler bottles; multi-material packaging; bullet-proof glass; laptop
Styrene (ABS), Ethylene-Vinyl Acetate (EVA) etc. and mobile phone cases; credit cards; textiles; and engineered mouldings
Sources: The Conference Board of Canada; American Chemistry Council, “Plastic Packaging Resins.”
6 United Nations Principles for Responsible Investment, The Plastics Landscape.
3
Bagging Capital
Chart 1
PET and HDPE Account for Two-Thirds
Canada’s Plastic
of Plastic Recycling in Canada
(annual breakdown, per cent)
Recycling Industry:
A Primer
1 1
14
PET PP Post-consumer recyclers are the poster
37
HDPE PS child of the plastic recycling industry.
LDPE Other
However, there is more to the industry than
17
recyclers. Waste management firms, material
recovery facilities (MRFs), incineration plants,
landfills, and brokers are important agents.
30 Furthermore, the industry exists within a
broader plastics value chain. (See Exhibit 2.).
Note: Percentage shares are based on estimates that 268,000 tonnes
of post-consumer plastic raw materials are produced in Canada annually. Understanding the recycling industry requires
Sources: ChemInfo Services Inc., Canada’s paper, plastic, and e-waste
sectors; The Conference Board of Canada. an examination of the challenges that plastic
recyclers face, which also illuminates the
nature of their relationship with other entities
in the value chain. The emerging opportunities
that are on the horizon are also instructive.
4
Exhibit 2
Plastics Value Chain
Firms and Consumers Actions and Processes
Ecosystem Boundaries Post-Consumer Circular Measures
Residential
Leakage Environment
Consumer
Oil and Gas Petrochemical Plastic Industrial Garbage

Feedstocks Plastic Producers Converters Consumer Disposal
Commercial Consumer
and Institutional Recycling
Consumer
Reduce
Reuse
Mechanical Waste
Management
Recyclers
Firms
Material
Chemical Bidding
Recovery
Recyclers and Sales Facilities
Brokers Recyclable Plastics Plastic Waste

International
Plastic Waste
Trade
International
Recyclable Plastic Incineration
Trade Plants
Landfill
Facilities
Entity Description
Petrochemical plastic Produce plastics from fossil fuels with or without carbon emissions mitigation technology; 99 per cent of
producers plastics are produced from fossil fuels.
Plastic converters Produce plastic products using plastic pellets supplied by petrochemical producers and/or plastic recyclers.
Residential consumer Consumers of plastic in the residential sector of the economy, e.g., single and multi-family homes.
Industrial consumer Consumers of plastic in the industrial sector of the economy, e.g., automotive and textile industries.
Commercial and Consumers of plastic in the commercial and institutional sector of the economy, e.g., office buildings,
institutional consumer malls, hotels.
Offer collection, sorting, and material recovery; landfilling; and other waste management services, e.g. harzdous
Waste management firms
waste disposal.
Incineration plants Burn waste with or without energy recovery.
Landfill facilities Muncipal solid waste and other types of waste are buried at landfills with or without the recovery of landfill gas.
Material recovery facilities Sort recyclable materials into plastic, metals, paper, glass, and other marketable materials.
Mechanical recyclers Recycle plastics using physical methods.
Chemical recyclers Recycle plastics using thermo-chemical or electrical methods.
Brokers Buy sorted plastic bales for resale to domestic and international customers.
Note: Important simplifications made in Exhibit 2 are discussed in Appendix A.

Source: The Conference Board of Canada.
Bagging Capital
Recycling Has Variants Not all conversion processes (e.g., production of

combustion fuels from plastics) are considered
Recycling can be defined by the degree of bona fide chemical recycling technologies by
material circularity, or the technology involved. circular economy stakeholders. Purification
There are two broad categories of recycling technologies can separate and recover plastics
in relation to material circularity—closed-loop from contaminants and additives. Decomposition
recycling and open-loop recycling. and conversion technologies can alter the
molecular structure of plastic waste such that the
Closed-Loop and plastic monomer is recovered.10 Consequently,
Open-Loop Recycling chemical recycling technologies have a higher
In closed-loop recycling, the material is returned propensity for closed-loop recycling.
to a state where it can serve the original purpose
Mechanical recycling refers to operations
for which it was produced. For example, a PET
that aim to recover plastic from plastic waste
plastic water bottle is recycled into a new water
through physical means, i.e., grinding, washing,
bottle at its end of life. In open-loop recycling, at
separating, drying, and granulating processes.
least part of the material is used for a different
Mechanical recycling does not have the ability
purpose than the one for which it was originally
to alter the molecular structure of plastic waste.
produced.7 For instance, a PET plastic bottle is
Most mechanical recycling is open-loop recycling.
converted into polyester fibre and used to make
Mechanical recycling accounts for 8 per cent of
garments or carpets.
the 9 per cent of recycled plastics in Canada,
In open-loop recycling, recycling no longer occurs with chemical recycling accounting for 1 per cent.
after one cycle of material renewal in most cases.
Between 1950 and 2015, less than 1 per cent of The Trade-Offs
all plastics produced were recycled more than Mechanical recycling has lower technology
once.8 The material is discarded in landfills, risks, capital costs, energy consumption,
incineration facilities, or the environment. and greenhouse gas emissions compared
to chemical recycling. Chemical recycling
Mechanical and technologies are an emerging opportunity with
Chemical Recycling higher technical risks. Nonetheless, they have the
Chemical recycling is an umbrella term for potential to recycle a broader variety of plastic
technologies that transform plastic waste into waste and produce higher quality (food-grade)
new plastics, intermediate products, or other plastics in a closed-loop manner. They also have
non-plastic compounds through decomposition, the potential to be integrated with existing assets
purification, and conversion processes.9 in the petrochemical industry.
7 International Energy Agency, The Future of Petrochemicals.

8 Geyer, Jambeck, and Law, “Production, Use, and Fate of All Plastics Ever Made.”
9 Closed Loop Partners, Accelerating Circular Supply Chains.
10 Hann and Connock, Chemical Recycling.
6
Between 1950 and 2015, less than

1 per cent of all plastics produced
were recycled more than once.
Bagging Capital
Bottlenecks Millions Versus Billions

Plastic recyclers are predominantly made up
At the Mercy of the Value Chain of small and medium-sized enterprises (SMEs).
Thirteen dedicated plastic recycling firms are
Canada’s plastic recyclers have limited control
responsible for over 90 per cent of recycled
over the quantity, quality, and price of their
plastic production in Canada.13 The majority
feedstock. Key reasons for this include:
of these entities have small balance sheets,
• the behaviour of consumers and businesses revenues, and production capacities compared
around compliance with recycling guidelines, to their primary competitors, petrochemical
e.g., the degree of contamination in consumers’ plastic producers. Both sell plastic pellets/flakes
recycling bags or blue boxes;11 to plastic converters.
• the specific requirements of municipal recycling
Petrochemical plastic producers are often
guidelines and policies;
publicly traded, multinational firms. Three—Nova
• decisions by waste management firms about
Chemicals, Dow Chemicals Canada, and Imperial
how much of the plastic they collect is diverted
Oil—account for almost 90 per cent of production
to MRFs, especially from the industrial,
capacity in Canada.14 In 2017, Canadian plastic
commercial, and institutional (ICI) sector,
producers had revenues of C$10 billion. This was
which mostly falls outside their municipal
30 times higher than the revenues of Canadian
recycling contracts;12
recyclers in 2016.15 As well, plastic recycling
• the efficacy of sorting by MRFs;
capacity in Canada is less than a tenth of the
• the use of auctions by some MRFs to sell their
production capacity of plastic producers.
sorted bales, which can cause a high variability
in prices. Recycled plastics are also considered to be of
inferior quality to new “virgin” plastics. Additives,
Finally, recyclers are also affected by international
contaminants, colouring, inconsistency in
markets and policies; plastic value chains in the
composition, and insecurity of supply are the
United States are particularly important. For
primary reasons. In addition to their higher quality,
example, some plastic recycling firms, due to
virgin plastics are also more cost-effective when
difficulties in securing feedstock locally, source
oil prices are low. Historically, this has limited
as much as 60 per cent of their feedstock from
the demand for recycled plastics and lowered
the United States.
their prices.
11 The adoption of single-stream or multi-stream recycling by municipalities also affects the degree of contamination in recycling
bags. Relative to single-stream recycling, contamination is reduced in multi-stream programs, as paper, glass, metals, and
plastics are sorted into different recycling bags. This comes at the cost of convenience to the consumer and may impact
recycling rates negatively.
12 According to Canada’s Strategy on Zero Plastic Waste, over 60 per cent of all municipal waste is from businesses and institutions.
13 Cheminfo, Canada’s Paper, Plastic, and E-Waste Sectors.
14 Based on data received from Environment and Climate Change Canada.
8
In recent years, demand has exceeded supply Outsized Competitors

for some recycled plastics, e.g., colourless,16
for Feedstock
rigid plastics such as HDPE. (See “A Demand
In the recycling industry, feedstock access is
Boom.”). This is changing pricing dynamics. It
paramount. Plastic recyclers have outsized
has established a significant price premium for
competitors in this regard. Leading waste
recycled (colourless) HDPE and a slim premium
management firms are publicly traded,
for coloured HDPE. (See Chart 2.)
multinational entities with revenues measured
Notwithstanding, the difference in scale between in the billions of dollars. They are diversified
recyclers and plastic producers has implications firms, owning and operating MRFs, transfer
for their ability to undertake new investments. stations,18 and landfills in addition to their
Plastic producers are often recipients of collection business.
billion‑dollar investment incentive programs from
governments in North America.17 Recyclers lack
programs of similar magnitude to help them scale.
Chart 2
Some Recycled Plastics in North America Have Maintained a Premium Over Virgin Plastics
(price, US$ cents per pound)
Virgin HDPE plastic (blow-moulded) Recycled HDPE plastic (colourless) Recycled HDPE plastic (mixed colour)
160
140
120
100
80
60
40
20
0
16
16
16
17
17
17
18
18
18
19
19
19
20
20
20
21
20
ay
n
ay
ay
ay
ay
p
Ja
Se
Ja
Ja
Ja
Se
Se
Se
Ja
Se
M
M
M
n
M
Ja
Note: Prices shown for virgin HDPE are net transaction prices. The net transaction price is an IHS Markit estimate for a representative domestic
(i.e., United States and Canada) transaction price.
Sources: IHS Markit; The Conference Board of Canada.
16 Colourless recycled plastics offer greater flexibility in their end use compared to mixed-colour recycled plastics.
17 See Olateju and Brown, publication Banking on a Dual Transition: Sustainable Finance for Petrochemical Plastic Producers for
additional details.
18 Transfer stations are used for the aggregation and compaction of waste from a broad scope of collection service areas.
This waste is sent to landfills, treatment facilities, or other disposal sites at long-distance locations. This allows the waste
to be transported in a more cost-effective and efficient manner.
9
Bagging Capital
The four largest waste management firms in As an indication of plastic recycling challenges,
North America by revenue—Waste Management, we did not find evidence of these leading waste
Republic Services, Waste Connections, and GFL management companies being directly involved in
Environmental19—had a combined revenue of the plastic recycling business—i.e., production of
US$34 billion in 2019. That year they collectively recycled plastic pellets/flakes. Chart 3 provides a
owned or operated 580 landfills, 759 transfer breakdown of their revenues.
stations, and 258 MRFs. 20 These companies exert
Considering these bottlenecks, investment in
significant control over post-consumer plastic
plastic recycling has been a tough sell. But there
waste feedstock.
is cause for optimism.
Plastic recyclers are at a structural disadvantage
to these firms. They depend on their MRFs for
feedstock, compete against their landfills, and Chart 3
Collection and Landfills Dominate Revenues
lack their economies of scale. Waste collection
for Waste Management Firms
is an essential service, while recycling is largely (2019 revenues, US$ billions)
optional in North America.
Collection Landfill
Waste management firms have secure multi-year Material Recovery Intercompany
Facilities Revenue
contracts with municipalities/PROs (producer Other
Transferstation
responsibility organizations) that yield stable
revenue streams. With relatively high barriers to Waste Management
entry and limited competition in the regions where
Waste Connections
they operate, especially in rural markets, investors
have been keen to provide capital. The situation GFL Environmental
has been the opposite for plastic recyclers—
Republic Services
private investment capital has been scarce. The
–5 0 5 10 15 20
lack of reliable revenues has impacted their
attractiveness for private capital.
Notes: We chose 2019 revenues to mitigate any anomalies due to COVID-19.
Negative intercompany revenues reflect when buyer and seller are the same
commercial entity and are hence subtracted. Intercompany revenue for
Republic Services was already subtracted from their reported figures.
Sources: Waste Connections, 2019 Annual Report; GFL Environmental,
2020 Annual Report; Waste Management, 2019 Annual Report; Republic
Services, 2019 Summary Annual Report; The Conference Board of Canada.
19 GFL Environmental Inc. is headquartered in Vaughan, Ontario. It is Canada’s largest waste management firm and the fourth
largest in North America.
20 See the 2019 annual reports of Waste Management, Waste Connections, and Republic Services. Data for GFL Environmental
were derived from its 2019 sustainability report.
10
Bagging
TheCapital
Conference Board of Canada
Privatizing Recycling Emerging Opportunities

Programs
Canada’s Need for
In Canada, the management and/or cost of
residential recycling programs, including plastic
Self‑Reliance
packaging, is being fully or partially transferred to Globally, plastic pollution is a marquee
private sector-controlled producer responsibility environmental issue and exporting plastic
organizations (PROs). PROs can differ in composition waste to international markets is increasingly
depending on the regulations of the jurisdiction in difficult. The plastic waste amendment of
question. For plastic packaging in Canada, they are the Basel Convention23 in 2019 designated
generally financed and controlled by fast-moving unrecyclable and contaminated plastic waste
consumer goods companies, retailers, importers, etc. exports as controlled materials subject to
regulations and restrictions. 24 An increasing
The transfer of responsibility in whole or in part from
number of countries that were previously
municipalities to the private sector for the operation
recipients of plastic waste exports from advanced
and financing of recycling programs is the essence of
economies, including Canada, have closed shop.
the extended producer responsibility (EPR) programs
that are being introduced in Canada. The aim is to For instance, China, through its National Sword
steer producers toward better packaging decisions. Policy, has implemented a full import ban on
plastic waste. Until 2018, nearly half of the world’s
Since the release of the Canadian Ministers of the
plastic waste had been exported to China for
Environment (CCME) EPR Action Plan in 2009, five
recycling over a span of 25 years. 25 China’s exit
provinces (Saskatchewan, Manitoba, British Columbia,
Ontario, and Quebec) have adopted some form of from the international plastic recycling business
EPR for residential packaging. 21 Other provinces has sent shockwaves that are still reverberating in
and territories are not far behind. New Brunswick is Canada and other advanced economies today.
expected to introduce EPR for paper and packaging
products in 2023, while Alberta and Yukon are
currently engaging stakeholders on EPR.
Depending on the jurisdiction, municipalities may

play a lesser role in the operation and financing of
recycling programs, with PROs rising to prominence
here. It is unclear how long this transition will last and
whether Canada’s provinces and territories will all 23 Environment and Climate Change Canada explains that Canada
ratified the Basel Convention on the Control of Transboundary
operate under full or partial EPR.
Movements of Hazardous Wastes and Their Disposal in 1992. The
United States has signed, but not ratified, the convention. Bilateral
It is noteworthy that the current EPR programs agreement exemptions, under Article 11 of the Basel Convention,
allow Canada to engage in plastic waste trade with the United
in Canada do not account for plastic waste from
States. Further details are available at https://www.canada.ca/
industrial, commercial, and institutional (ICI) sectors. en/environment-climate-change/corporate/international-affairs/
partnerships-organizations/transboundary-movement-hazardous-
In many provinces and territories, the ICI sector waste.html.
generates most plastic waste.22 As EPR programs 24 United States Environmental Protection Agency, “New
International Requirements for the Export and Import of Plastic
in Canada mature and evolve, the ICI sector may be
Recyclables and Waste.”
included in future. 25 Watson, “China Has Refused to Recycle the West’s Plastics.”
21 Canadian Council of Ministers of the Environment (CCME),

“Discussion Paper.” 11
22 Ibid.
Bagging Capital
There is a strong incentive for Canada to build As a result, these value chain entities and
domestic plastic recycling capacity and better financiers are seeking opportunities to
utilize local value chains. Building this capacity will demonstrate that they are part of the solution to
require capital investments, and Canada’s policy plastic pollution and a circular economy, not the
environment is shifting to support investment. problem. Investments in plastic recycling may be
Apart from an upcoming ban on difficult-to- on the horizon because the environmental, social,
recycle, single-use plastics, Canada’s Ocean and governance (ESG) risks of the companies in
Plastics Charter has set a target to increase the the value chain are increasingly determinants of
recycled content of plastics products by 50 per their access to capital and valuation.
cent by 2030. Recycled content mandates can
uplift prices for recycled plastic above prices
for virgin plastic. 26 This increases the potential Forging New Ties
for investments. With Innovation
Emerging chemical recycling technologies
(see “Recycling Has Variants”) have several
A Demand Boom important implications. One is the forging of
Demand for recycled plastics has boomed. new ties between chemical plastic recyclers
Societal pressure is mounting on fast-moving and petrochemical plastic producers. Chemical
consumer goods (FMCG) companies and their recycling enables plastic producers to use
brands to end their contribution to plastic recycled monomers directly in their production
pollution. This has led to a flurry of voluntary process. The result is that plastic producers
commitments by FMCG firms to use recycled become the customers of chemical recyclers
plastic in their packaging. Consequently, these rather than their competitors, as in the case of
firms are demanding recycled plastic packaging mechanical recyclers. This has the potential to
from plastic converters. galvanize investments from the petrochemical
industry, which has the investment capital,
Other segments of the plastics value chain are
technical-know-how, and scale needed to
also in the hot seat. Petrochemical plastic resin
transform plastic recycling.
producers are under increased scrutiny for their
limited use of recycled plastics, their contributions
to plastic pollution, and their carbon footprint. 27
Financial institutions are also in the spotlight for
enabling plastic pollution. 28
26 Brooks and others, “Recycled Plastics Recover.”

27 The Conference Board of Canada’s impact paper by Olateju and Brown Banking on a Dual Transition: Sustainable Finance for
Plastic Producers addresses the challenges facing plastic producers in greater depth.
28 Portfolio Earth, Bankrolling Plastics.
12
Investment Prospects Solutions are available from mechanical and

chemical recycling. Where plastics have
We engaged active and potential investors in low contamination and impurities, and high
Canada’s plastics value chain to assess the homogeneity, they can be mechanically
investment prospects, barriers, and opportunities recycled for food-grade uses. Deposit-return
for plastic recycling. We conducted 15 structured schemes for bottles produce these sorts of
interviews involving 17 participants. high‑quality plastic bales. But most plastic
waste has high contamination and impurities
These interviews were complemented by an
and is heterogeneous. Chemical recycling is the
assessment of recent investment trends in
leading solution in this case. It can better support
Canada’s plastic recycling industry. To put
closed‑loop recycling of plastics and enable
Canada’s investment prospects in context,
food-grade applications from a broad spectrum
investment trends for the plastic recycling
of plastics.30
industry in the United States (i.e., California and
Texas) and the Netherlands were examined.
Extended Producer Responsibility
These are our key findings from engaging
May Impact Competition and
with investors.
Investment
With EPR poised to become more widespread
Trends in Investor Engagement in Canada, the contractual commitments made
by municipalities for plastic recycling may
High Demand for Food-Grade shift to private sector-controlled PROs. (See
Recycled Plastics “Privatizing Recycling Programs.”) This could
There is an acute scarcity of recycled plastics herald a wholesale change. The customers
that can meet the standards of regulators and of recycling services will evolve from many
plastic converters for food-grade applications. municipalities that control their local market to
Most food-grade plastic packaging (e.g., PET a singular and centralized customer that could
water bottles) is converted into non-food-grade control the provincial/territorial market. While
products when recycled. Rather than being a single customer can reduce the transaction
recycled, these plastics are “downcycled,” in costs of firms in the recycling industry, it may
an open loop. (See “Recycling Has Variants.”) also hinder competition.
Plastic packaging accounts for a third of plastic
demand in Canada and almost half of the
plastic waste generated. 29 Investors are keen
to support solutions.

30 Capital costs and carbon emissions from chemical recycling will be higher than those from its mechanical counterpart.
The reliability of chemical recycling and its resiliency to impurities and contaminants in plastic waste are yet to be proven
widely on a commercial scale.
13
Bagging Capital
Private organizations such as PROs are not Limited Interest in the

obligated to make the basis of their procurement Recycling Business
decisions public. Even when this occurs, PROs
can create a winner-takes-all paradigm. The Value chain segments such as plastic converters
provincial market, not just a municipality, can and FMCGs have limited interest in venturing into
become exclusive to the winning party or a select the post-consumer plastic recycling business. It
few parties. With value chain segments such is not a core competency. These entities want
as waste collection already subject to limited access to recycled plastics, not ownership of
competition, EPR may compound this further, recycling assets. They are unlikely to invest
depending on how contracts are allocated. directly in the plastic recycling industry but
have a strong interest in enabling investments
EPR can also impact investments. For instance, and technology development via purchase
in British Columbia, Recycle BC (the PRO agreements and other instruments.
for plastic packaging and paper) has generic
recycling targets for flexible and rigid plastics. Federalism, Fragmentation, and
There are no targets for specific types of plastic. Regulations Challenge Investment
(See “Plastics: Types and Uses.”) It is left to the
Canada is a complex terrain for investors. The
discretion of the contracted plastic recycler to
fragmentation and lack of alignment around
meet these recycling targets using plastics of
plastic recycling, as well as circular economy
their choice. Most recyclers will opt for the path
policies and regulations at the municipal,
of least resistance and cost. Strong incentives
provincial, and federal levels, are challenges
to address difficult-to-recycle plastics used in
for investment.
packaging, such as multi-layered LDPE films,
polystyrene, and others, are limited. Specific For instance, while the federal government has
targets for these plastic resins can help. Targets announced recycled content targets in plastic
can strengthen the drivers for investments to products, these targets are yet to be reflected
address these difficult-to-recycle materials, e.g., in the policies of provinces and territories.
investments in chemical recycling. EPR programs for plastics are inconsistent
across the country in terms of definition, scope,
recycling targets, reporting requirements, and
the share of costs borne by the private sector.
Recycling collection methods, i.e., single stream
or multi‑stream recycling, are different across
Canada and within provinces.
14
The federal government’s designation of plastics Scope 3 Emissions Accounting Can

under Schedule 1 of the Canadian Environmental Reduce Investment Incentives
Protection Act would regulate them as a toxic
material. Among other factors, this is due to Equity investments in post-consumer plastic
their potential immediate or long-term harmful recycling (i.e., mechanical or chemical recycling)
impact on the environment or its biodiversity. have little to no carbon emissions benefit for
Some investors raised the possibility that this some segments of the plastics value chain.
designation may challenge investment attraction This does not help the investment case for
in the plastics value chain. plastic recycling.
Other investors cited Canada’s relatively lax For instance, if a plastic converter makes an
policies on plastic recycling, recycled content, equity investment in a post-consumer plastic
and incentives for a circular economy compared recycling plant, its scope 1 and scope 2
to Europe. For several innovative firms in the greenhouse gas emissions rise. The climate
plastics value chain, Europe, not Canada, is a change benefit of using recycled plastics in
springboard for growth. Europe’s bold policies its production process is accounted for in
(taxes on the use of virgin plastic resins, its reduced scope 3 emissions in the form of
recycled content mandates, etc.) and the reduced use of petroleum products as feedstock
density and collaboration of plastic value chain for plastics.31 Scope 3 emissions account for
ecosystems were cited as the underlying reasons. the lion’s share of greenhouse gas emissions
by plastic converters. However, they are highly
uncertain. There is currently no broad consensus
Recycled Content Commitments
on how to account for scope 3 emissions by
Have Limited Impact on
companies. The carbon emissions performance
Mechanical Recyclers
of companies is almost exclusively assessed on
The flurry of recent voluntary recycled plastic
scope 1 and scope 2 emissions.
commitments by FMCG firms sends a strong
demand signal. But the immediate impact on If the challenges of scope 3 emissions accounting
mechanical recyclers and their investment can be resolved, the use of recycled plastics can
prospects is limited. Apart from the fact that most contribute substantively to emissions reductions
of these commitments are four to nine years for plastic converters as well as reducing plastic
away, they also focus on food-grade recycled pollution. The emissions profiles of two of the
plastics used in packaging. Mechanical recyclers world’s largest plastic packaging companies
struggle to provide food-grade recycled plastics (Berry Global and Amcor) underscore this point.
because of the contaminants and impurities of (See Chart 4.)
plastic waste and the increased costs involved in
meeting food-grade specifications.
31 As defined by the Greenhouse Gas Protocol, scope 1 emissions are the direct greenhouse gas emissions from owned or
controlled company sources. Scope 2 emissions are the indirect greenhouse gas emissions due to the generation of purchased
energy, e.g., purchased electricity. Scope 3 emissions are the greenhouse gas emissions that occur in the value chain of the
company, both upstream and downstream.
15
Bagging Capital
Chart 4
Plastic Resins Account for up to 84 Per Cent of Scope 3 Emissions for Leading Plastic Converters
(per cent)
Berry Global Amcor

Scope 1 direct GHG emissions Scope 1 direct GHG emissions
Scope 2 indirect GHG emissions Scope 2 indirect GHG emissions
Scope 3 indirect GHG emissions: Plastic resin Scope 3 indirect GHG emissions: Raw materials for packaging
Scope 3 indirect GHG emissions: Other (fuel/energy, waste, Scope 3 indirect GHG emissions: Other (logistics,
capital goods, upstream T&D, downstream T&D) energy delivery, waste)
81
83
84
95
16
5
17 12.5
2 4.5
Note: While Amcor does not disclose the contribution of plastic resin in raw material emissions, according to its 2019 annual report, Amcor is one of the
world’s largest manufacturers of rigid plastic containers and related products. The company is also one of the world’s largest suppliers of plastic, aluminum,
and fibre‑based flexible packaging. Amcor reported a revenue of US$13 billion in 2019—78 per cent was due to flexible packaging, while 22 per cent was
attributed to rigid packaging.
Sources: Berry Global, GRI Index 2019; Amcor, 2019 GRI Sustainability Report; The Conference Board of Canada.
16
Canada, the United States, growth of early-stage innovative firms in chemical

recycling, artificial intelligence-based sorting
and the Netherlands technologies, etc., especially in the pre-revenue,
pre-commercial phase.
Following the Money
Publicly disclosed investment transactions Investments by Petrochemical
from 2018 to 2021Q1 in the plastic recycling Plastic Producers and FMCGs
industry for Canada, the United States (i.e., Are Limited
California and Texas), and the Netherlands are Investments by plastic producers and FMCG
documented in Appendix B. Some distinct trends entities are scarce in Canada. Conservative risk
and commonalities are apparent. mitigation instruments such as joint development
agreements (JDAs) and supply agreements
dominate the activities of these firms. JDAs and
Canada supply agreements support the plastic recycling
industry but do not provide growth capital.
Waste Management Firms and Early-
Stage Financiers Lead Investments Plastic producers are the natural strategic
Waste management firms are the leading source partner for some chemical recyclers such as
of investment in Canada’s plastic recycling decomposition and conversion technologies.
industry in terms of large financial transactions They have the scale of production, the technical
(i.e., greater than C$100 million). know-how, a strong incentive to be more
circular, and access to capital. The underlying
Most of these investments take the form
causes behind the limited equity investments by
of mergers and acquisitions (M&A) of
plastic producers in Canada warrants further
competitors and other value chain segments.
examination.32 It may reflect the challenges
(See Appendix B.) There are no examples of
associated with Canada’s innovation ecosystem
waste management firms investing in mechanical
along with the issues of elevated technology
recycling facilities, and Waste Management’s
risk and greenhouse gas emissions pertinent to
equity investment in Enerkem was the sole
chemical recycling.
example found in Canada for chemical recycling.
Without investments, co-innovation, and strategic
Venture capital, private equity firms, and other
relationships between plastic producers and
financial institutions have also made significant
chemical recyclers, achieving a circular plastics
equity investments in the industry, with a
economy becomes much more difficult. Canada’s
particular focus on chemical recycling. These
positioning on the global landscape as a potential
equity investments (all things being equal) have
leader in chemical recycling is also affected if this
a higher degree of risk when compared to debt
linkage in its plastics value chain is weak.
or supply agreements. They are crucial to the
32 Canada’s innovation competitiveness in chemical recycling is the subject of a future research publication by The Conference
Board of Canada.
17
Bagging Capital
GFL Environmental and Enerkem: Mechanical Recycling Still Garners

Two Bright Spots Investment Interest
Since its founding in 2007, GFL Environmental Some large, well-established value chain entities,
has experienced strong growth through its i.e., Nova Chemicals and TC Transcontinental,
aggressive acquisition strategy. Prior to being are investing in mechanical recycling. This
publicly listed, the company was successful in underscores the relevance of mechanical
raising capital from a diversity of large global recycling even as more sophisticated chemical
investors, including Macquarie Infrastructure and recycling technologies emerge. Despite its
Real Assets, Ontario Teachers’ Pension Plan, shortcomings, mechanical recycling is a mature,
and BC Partners. GFL raised C$2.95 billion in its well-understood technology that will spearhead
initial public offering (IPO) in March 2020—one recycling efforts for years to come.
of the largest in Canadian history.33 Enerkem,
a non‑publicly traded chemical recycling
firm, raised over $US480 million in equity United States
from 2018 to 2020.
Diversified Investments
As tables 13 to 19 in Appendix B illustrate,
Quebec is a Chemical Recycling
investments in California and Texas are more
Hotspot in Canada
diversified and broader in scope than Canada’s.
Chemical recycling is the value chain segment This is true for the types of investors involved
with the most investment transactions in and the target sectors. Mechanical and chemical
Canada’s plastic recycling industry. Most of recycling as well as artificial intelligence-based
these chemical recycling-focused investments sorting and material recovery facilities are all
involve risk mitigation instruments (e.g., JDAs, experiencing significant investment activity.
supply agreements). Most chemical recycling
investments in Canada target firms that are Significant expansionary capital in mechanical
headquartered in Quebec—an indication of an closed-loop bottle-to-bottle recycling has been
emerging and vibrant ecosystem in the province. deployed in California and Texas. CarbonLite,
a mechanical recycling firm previously
headquartered in California, led this effort. Facing
financial pressures from the pandemic and
challenges in raising prices, CarbonLite filed for
bankruptcy in March 2021. Its recycling assets
have since been sold to other plastic recycling
stakeholders including Indorama Ventures,
DAK Americas and others.34
33 Milstead, “GFL Closes Oversubscribed Debt Offering.”

34 Staub, “Plastic Giants Snap Up CarbonLite
18
Equity Investments by Plastic FMCG Firms Are More Active

Producers and FMCGs and Make Direct Investments
Remain Scarce FMCG companies are more active in the
Equity investments by plastic producers are Netherlands relative to Canada and the U.S.,
limited in California and Texas. Risk mitigation with some providing equity directly through
instruments such as supply agreements, JDAs, their venture arm. They are also engaged in the
joint venture plans, and partnerships constitute provision of risk mitigation instruments such as
most of their activities. This is consistent with supply agreements and partnerships.
trends observed in Canada.
Mechanical Recycling Is Still
There is little evidence of direct investment
Receiving Investments
activity by FMCG firms in either state. Some firms
Consistent with trends in the United States and
provide investment capital indirectly through
Canada, mechanical recycling is raising capital
venture and equity funds that focus on circular
investments from a diverse investor base in
plastic economy solutions.
the Netherlands.
Waste Management Firms

Are Active Investors Some Plastic Converters and
Retailers Are Providing Equity
Similar to Canada, waste management entities
These two value chain segments have made
have been significant equity investors in both
direct equity investments, contrary to what has
states. Their investments span all segments
been observed in the United States and Canada.
of the plastics value chain except mechanical
and chemical recycling. M&A activity by waste
management firms is also significant in these two Dutch Plastic Producers Are Less
regions, with Texas being the dominant state in Conservative Investors
this area. Plastic producers have provided equity
for acquisitions of recycling firms and the
construction of chemical recycling plants in the
Netherlands Netherlands. While there are few investment
transactions by plastic producers, most of
Waste Management Firms Dominate
them move beyond more conservative supply
Equity Investments
agreements and joint development agreements.
Waste management firms are the leading source
of equity investments in the plastic recycling
industry in the Netherlands. (See tables 20 to
22 in Appendix B.) In Canada, the United States,
and the Netherlands, waste management firms
are active equity investors with the highest
transaction values.
19
Bagging Capital
Package Deals: De-Risk Feedstock Access

Bolstering Canada’s and Pricing for Local
Plastic Recyclers
Investment Prospects Municipalities and PROs should prioritize
Canada’s tiers of government need to access to feedstock for local recyclers in
collaborate in de-risking the plastic recycling their contractual arrangements with waste
industry. Without this, substantive private sector management firms and MRF operators, where it
investments will remain sub-optimal for plastic is reasonable and cost-efficient to do so.35 Plastic
recyclers especially. Governments must also recyclers, especially those that do not own MRFs
provide incentives and disincentives for entities or waste collection assets, face formidable
in the plastics value chain to advance desired challenges in securing long-term supply
societal outcomes and increased efficiency of agreements for feedstock. But supply is only one
the industry. side of this issue.
We recommend the following actions. Feedstock pricing instruments that reduce the
volatility and uncertainty that recyclers face
during bidding rounds are needed. For example,
Develop Industrial Recycled where municipalities own MRFs that sell sorted
Plastic Content Mandates plastic bales, a portion of this material could be
Recycled content mandates in non-food- earmarked for local recyclers and sold at a price
grade industrial products can enhance the that is discounted relative to the price for brokers
investment prospects for plastic recyclers. and non-local buyers. Local recycling offers
Examples are recycled content in garbage environmental co-benefits such as improved
bags and automotive parts. Recycled content efficiency, lower greenhouse gas emissions, and
commitments from FMCG companies focus on lower air pollution from reduced transportation
food-grade packaging applications, which are out logistics. These benefits are not fully accounted
of reach for many mechanical plastic recyclers. for in bale prices.
Chemical recycling is yet to become a mature
commercial-scale reality.
Mechanical recyclers can readily meet the

required material specifications for industrial
products today. These mandates can provide the
demand certainty and price independence from
virgin plastics that can galvanize investments.
35 For example, some municipalities may have no MRFs locally to sort the plastic waste into bales of recyclable materials to be
used by plastic recyclers. The plastic waste streams would have to be sent to non-local MRFs for processing.
20
There is a disconnect between

the design, manufacturing,
and procurement decisions of
producers and the availability
and capability of plastic recycling
infrastructure in Canada’s
end markets.
Bagging Capital
Incentivize High-Quality To enable this change, multi-stream recycling

that decreases contamination and can increase
Sorting at MRFs and Adopt
recyclable yields at MRFs by up to 10 per
Multi-Stream Recycling cent37 should be implemented in municipalities
for Consumers across Canada. This may be less convenient for
Material recovery facilities are the “filters” consumers, but they too have a role to play in
that plastic recyclers rely on for useable enabling a circular plastics economy.
feedstock. MRFs in Canada should have
minimum performance standards for the rate
of contamination in plastics bales as part of their
Enhance Canada’s
licence to operate and contractual obligations. EPR Programs
Governments and PROs need to create Extended producer responsibility programs
conditions such that MRFs have a vested interest offer many benefits for Canada’s recycling
in the quality and quantity of their outputs and industry, but they can do more. EPR programs
its suitability for manufacturing operations that should address the variety of plastics in waste
create value in the economy. streams with specific targets. This can galvanize
investments to address the various kinds of
Currently, there is little incentive for high-quality difficult-to-recycle plastics and builds a market
plastic sorting at MRFs. Plastics can make up for innovative solutions.
a high share of materials received at MRFs by
weight,36 yet they often account for some of the EPR should go beyond the residential sector.
lowest shares of revenue compared to other Many ICI consumers dispose of their plastic
recyclables that MRFs produce such as paper waste directly with waste management firms
and metals. This incentive is even lower in the without the obligation to adhere to residential
case of privately owned MRFs, where landfills recycling program guidelines. Depending on
present a low-cost disposal option. what waste management firms do with these
feedstocks, the supply difficulties for recyclers
In some regions of Canada, municipalities can be exacerbated.
compensate private MRF operators they contract
for the tonnage of material processed, not the EPR was meant to change the packaging
quality of the output. Quality and quantity should decisions of producers to enable higher
be points of emphasis. recyclability and the achievement of a circular
economy. There is little evidence this is the
case for plastics. Some producers regard EPR
as a cost of doing business that is too small to
warrant changing investment decisions in plastic
36 In Ontario’s Blue Box Program for 2019, plastics had the second-highest share of tonnage of all recycled materials—13 per
cent—although this is a distant second place, as paper accounted for 70 per cent of recycled materials.
37 Cheminfo, Canada’s Paper, Plastic and E-Waste Sectors.
22
packaging. EPR fees for producers need to Risk mitigation policies (e.g., reducing zoning,
be material enough to change behaviour. permitting, and liability risks by classifying
recycling operations as manufacturing, not
EPR costs can be passed on to consumers,
waste management)38 and financial incentives
which negates the premise of recycling costs
are needed to encourage investments from
being borne by producers. The design and
these firms. But other investment drivers
manufacturing of plastics for recyclability and
are also required.
a circular economy needs to be a policy priority
for provincial governments within EPR programs. Restrictions and disincentives are needed for
There is a disconnect between the design, plastics and other materials that are currently
manufacturing, and procurement decisions landfilled but could be readily recycled. Landfill
of producers and the availability and capability customers and owners need to be exposed to
of plastic recycling infrastructure in Canada’s the full social cost of these assets—air pollution,
end markets. greenhouse gas emissions, property value
impacts, and socio-economic externalities on
Addressing these issues can enhance feedstock
surrounding communities, among others. The
quality, increase recycling rates, reduce landfilling,
artificially low landfill tipping fees in Canada and
and encourage capital investments to produce
the United States do not reflect the full cost of
high-quality recycled plastics.
landfill sites to society.
Leverage the Scale of Waste

Management Firms and
Incentivize Change
Waste management firms are well positioned to
scale plastic recycling to new heights. They have
the feedstock access and control, MRF assets,
economies of scale, and access to capital
required. These firms will remain reluctant
to venture into the plastic recycling business
as long as the risks of high price volatility
and low feedstock quality remain. Moreover,
their collection and landfilling operations are
much less risky and more lucrative.
38 Ibid.
23
Bagging Capital
Appendix A
Methodology
The Conference Board of Canada engaged a broad Note on Exhibit 2—Plastics
spectrum of stakeholders in the plastics value chain
through structured, in-depth interviews on a variety
Value Chain
of circular plastics economy research themes. Important simplifications in this diagram include
the following:
A total of 38 interviews were conducted with
51 participants. Fifteen of these interviews, involving • Plastics can be produced from non-fossil fuel
17 participants, focused on the investment prospects feedstocks, e.g., biomass-based feedstock.
for Canada’s plastic recycling industry. We would like
These feedstocks account for about 1.0 per cent
to acknowledge the contributions of all our interview
of plastic production.
participants. Their participation does not constitute an
endorsement or responsibility for the research findings • Plastic recycling also occurs prior to consumption—
presented in this impact paper. Table 1 provides a this is known as post-industrial recycling. For
full list of interviewees who granted permission to be
instance, plastic converters recycle their own scrap
included in this paper.
material at industrial production sites.
In addition to these interviews, we engaged public and
• Mechanical recyclers and chemical recyclers produce
private sector entities in California and the Netherlands
in discussions about their respective plastic plastic waste from their operations
recycling industries.
• Plastic producers, converters, and consumers also
An independent literature review and analysis of the export their products.
subject matter addressed in this impact paper was
• Leakage of plastic waste into the environment can
carried out by the Conference Board. This led to the
synthesis of evidence-based findings. occur from other entities in the value chain apart
from consumers.
• Some MRFs bypass local plastic recyclers and

brokers, selling to international entities directly.
• Remanufacturing, refurbishment, repair, and redesign

are examples of other circular measures for
producers and consumers that are not illustrated.
Find Conference Board research at conferenceboard.ca. 24

Appendix A | The Conference Board of Canada
Table 1
Expert Opinion Interview Participants
Name Position Organization
Daniel Yungblut Vice-President and Head of Research 1832 Asset Management
Alison Schneider Vice-President, Responsible Investment Alberta Investment Management Corporation

(AIMCO)
Viridiana Ramirez Senior Analyst, Responsible Investment Alberta Investment Management Corporation
(AIMCO)
Tom Rand Co-Founder and Managing Partner ArcTern Ventures
Amita Sandhu Head of Sustainability and Government Relations BASF Canada
Irene Yang Director, Finance and Business Services BASF Canada
Paulo Springman Aerospace Business Development Manager BASF Canada
Robert Flores Vice-President, Sustainability Berry Global
Peter Johnson Chair, CSA Technical Committee, Canadian Canadian Standards Association (CSA)
Transition Taxonomy and Sustainable Finance
Bernhard Shiessl Chief Operating Officer Center for International Climate Research
(CICERO)
Kristin Eine Senior Advisor Center for International Climate Research

(CICERO)
Courtney Lowrance Managing Director, Sustainable Banking and Citi Bank

Corporate Transitions
Sean Kidney Co-Founder and Chief Executive Officer Climate Bonds Initiative
Shirley Speakman Senior Partner Cycle Capital
Julie Zaniewski Sustainability Director Dow Chemicals
Victor Zapata Recycling Commercial Director of the Americas Dow Chemicals
Martin Vogt President and Chief Executive Officer EFS Plastics
Gerald Naber Programme Manager of the New Plastics Economy Ellen MacArthur Foundation
Global Commitment
Paulina Leung Chief Sustainability Officer Emterra Group
Armand Langlois President and Chief Executive Officer Enerlab Inc.
Aaron Hay Lead Engager, SDG Fixed Income Federated Hermes
Mark Morrissey Director of Economic Development Fort Saskatchewan, City of
Shane Jaffer Senior Advisor, ESG Government of Alberta
Timothy Wong Acting Director, International Energy Strategy, Government of Alberta

Department of Energy
Victoria Bachmann Director, Policy and Planning, Department of Energy Government of Alberta
(continued ...)

Bagging Capital
Table 1 (cont’d)
Expert Opinion Interview Participants
Name Position Organization
Patrick Hum Senior Director, Manufacturing Industries Directorate Innovation, Science and Economic
Development Canada
David Chappell Senior Vice-President, Petrochemical Development Inter Pipeline
Erik Koskela Government Relations Analyst Inter Pipeline
Berit Lindholt Lauridsen Senior Climate Finance Specialist International Finance Corporation
Francisco Avendano Operations Officers International Finance Corporation
Samu Salo Industry Advisor International Finance Corporation
Jamie Bonham Director, Corporate Engagement NEI Investments
Catherine O’Brien Senior Vice-President of Corporate Affairs Nestle Canada
Jacob Michaelsen Head of Sustainable Finance Nordea Markets
Sarah Marshall Director of Sustainability NOVA Chemicals
Neil Antymis Director, Government Affairs PepsiCo
Mirko Papuga Chief Financial Officer PFB Corporation
Lauren Versagli Head of Corporate Development, North America Plastic Energy

Jocelyn Doucet Chief Executive Officer Pyrowave
Virginie Bussières Vice-President, Communications, Marketing, and Pyrowave
Government Relations
Michael Slotwinski Senior Economic Development Officer Sarnia-Lambton Economic Partnership
Shauna Carr Economic Development Officer Sarnia-Lambton Economic Partnership
Jonathon Durnford Vice-President, Food Packaging Sealed Air
Ignacio Bonnett Hernandez Global Policy Manager for Chemicals Shell
and Manufacturing
Michael Richards Investment Attraction Lead Sturgeon County
Tyler Westover Manager, Economic Development Sturgeon County
Mayur Mukati Manager, Sustainable Finance Solutions Sustainalytics
Robert Brown Vice-President, Strategy Veolia
Stephanie Rico Senior Vice-President, Sustainability and Wells Fargo

Corporate Responsibility

Appendix B | The Conference Board of Canada
Appendix B
Investment Trends
The Conference Board of Canada examined
investment trends in Canada’s plastic recycling industry
from 2018 to 2021Q1. For comparison, we also
analyzed investment trends for the plastic recycling
industry in the United States (i.e., California and Texas)
and the Netherlands.
Download this appendix to see the data.
Download appendix

Bagging Capital
Appendix C
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31
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33
Acknowledgements
This impact paper was completed by The Conference Bagging Capital: Attracting Private Investments
Board of Canada’s Sustainability Knowledge Area. in Canada’s Plastic Recycling Industry
The research team involved Dr. Babatunde Olateju, Babatunde Olateju and Colin Brown
Principal Research Associate (Project Lead), and
Colin Brown, Research Associate. To cite this research: Olateju, Babatunde, and Colin Brown. Bagging
Capital: Attracting Private Investments in Canada’s Plastic Recycling
The authors would like to thank the research Industry. Ottawa: The Conference Board of Canada, 2022.
advisory board members of The Conference Board ©2022 The Conference Board of Canada*
of Canada’s circular plastics economy research Published in Canada | All rights reserved | Agreement No. 40063028 |
*Incorporated as AERIC Inc.
platform entitled Aligning Fragments: A Circular
Plastics Economy for Canada. We convey our sincere An accessible version of this document for the visually impaired
is available upon request.
thanks to the board members for their external review
Accessibility Officer, The Conference Board of Canada
and comments (in alphabetical order): Dany Drouin, Tel.: 613-526-3280 or 1-866-711-2262
Director General, Plastics and Waste Management E-mail: accessibility@conferenceboard.ca
Directorate, Environment and Climate Change Canada ®The Conference Board of Canada is a registered trademark of
The Conference Board, Inc. Forecasts and research often involve
(ECCC); Deborah Pietrusik, Chair, Plastics Alliance
numerous assumptions and data sources, and are subject to
of Alberta; John Thayer, Senior Vice President Sales inherent risks and uncertainties. This information is not intended
as specific investment, accounting, legal, or tax advice.
and Marketing, NOVA Chemicals and Committee The findings and conclusions of this report do not necessarily
Chair, American Chemistry Council—Plastics reflect the views of the external reviewers, advisors, or investors.
Any errors or omissions in fact or interpretation remain the sole
Division; and Mathieu Seguin, General Manager, responsibility of The Conference Board of Canada.
TC Transcontinental Recycling.
The authors are also grateful to Eric Corneau,

Section Head, Measures Development and Sector
Analyses, ECCC; and Jason Visscher, Economic Advisor,
Plastics and Waste Management, ECCC, for their valued
contributions during the execution of the research.
We appreciate the contributions of Roger Francis,

Director, Sustainability, and Michael Burt, Vice President,
throughout the course of this project and for their
internal review of this paper. Our research impact and
content strategy team at the Conference Board is duly
acknowledged for their support.
Funding for this research was provided by Environment

and Climate Change Canada (ECCC). The findings and
conclusions of this impact paper are entirely those
of The Conference Board of Canada. Any errors or
omissions in fact or interpretation remain the sole
responsibility of the Conference Board.
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﻿The Conference Board of Canada

Plastic Symbol Plastic Name Example Applications

Bottles for cosmetics and cleaners; milk bottles, buckets, crates,

Rigid packaging such as clamshells; flexible packaging such as deli

Takeout containers and dishes/utensils; protective foam packaging;

6 United Nations Principles for Responsible Investment, The Plastics Landscape.

﻿The Conference Board of Canada

Firms and Consumers Actions and Processes

Ecosystem Boundaries Post-Consumer Circular Measures

Oil and Gas Petrochemical Plastic Industrial Garbage

Brokers Recyclable Plastics Plastic Waste

Incineration plants Burn waste with or without energy recovery.

Mechanical recyclers Recycle plastics using physical methods.

Chemical recyclers Recycle plastics using thermo-chemical or electrical methods.

Note: Important simplifications made in Exhibit 2 are discussed in Appendix A.

Recycling Has Variants Not all conversion processes (e.g., production of

7 International Energy Agency, The Future of Petrochemicals.

Between 1950 and 2015, less than

Bottlenecks Millions Versus Billions

﻿The Conference Board of Canada

In recent years, demand has exceeded supply Outsized Competitors

Privatizing Recycling Emerging Opportunities

Depending on the jurisdiction, municipalities may

21 Canadian Council of Ministers of the Environment (CCME),

26 Brooks and others, “Recycled Plastics Recover.”

﻿The Conference Board of Canada

Investment Prospects Solutions are available from mechanical and

29 Deloitte, Economic Study of the Canadian Plastic Industry.

Private organizations such as PROs are not Limited Interest in the

﻿The Conference Board of Canada

The federal government’s designation of plastics Scope 3 Emissions Accounting Can

Berry Global Amcor

Scope 2 indirect GHG emissions Scope 2 indirect GHG emissions

﻿The Conference Board of Canada

Canada, the United States, growth of early-stage innovative firms in chemical

GFL Environmental and Enerkem: Mechanical Recycling Still Garners

33 Milstead, “GFL Closes Oversubscribed Debt Offering.”

﻿The Conference Board of Canada

Equity Investments by Plastic FMCG Firms Are More Active

Waste Management Firms

Package Deals: De-Risk Feedstock Access

Mechanical recyclers can readily meet the

There is a disconnect between

Incentivize High-Quality To enable this change, multi-stream recycling

﻿The Conference Board of Canada

Leverage the Scale of Waste

• Some MRFs bypass local plastic recyclers and

• Remanufacturing, refurbishment, repair, and redesign

Find Conference Board research at conferenceboard.ca. 24

Appendix A | The Conference Board of Canada

Daniel Yungblut Vice-President and Head of Research 1832 Asset Management

Alison Schneider Vice-President, Responsible Investment Alberta Investment Management Corporation

Tom Rand Co-Founder and Managing Partner ArcTern Ventures

Amita Sandhu Head of Sustainability and Government Relations BASF Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada

The Conference Board of Canada