Q&A: Bridget Croke, Closed Loop Fund

Q&A: Bridget Croke, Closed Loop Fund

Investment fund’s head of external affairs explains why CLF is focusing on material-specific projects to increase recovery nationwide.

March 14, 2017
Megan Workman
Conferences & Events Financial Glass Material Handling Equipment Municipal / IC&I Plastics Sorting Equipment
The Closed Loop Fund (CLF), an investment fund that finances recycling infrastructure and sustainable manufacturing technologies to advance the circular economy, recently announced its request for proposals (RFPs) for projects that collect, sort and/or process postconsumer polypropylene (PP) plastic. 

CLF says increasing recovery of PP is possible with the proper infrastructure, driving cost savings for municipalities, increasing revenue for material recovery facilities (MRFs) and supplying greater volumes of high-value material into the manufacturing stream.

Bridget Croke, head of external affairs, said CLF will consider projects that use robotics to sort PP, as one example, during the session “Investing in Recycling: Closed Loop Fund” March 13, 2017, at the Southeast Recycling Conference (SERC) & Trade Show in Destin, Florida. In its 30th year, SERC is March 12-15 at the Hilton San Destin Golf Resort & Spa.

In addition to robotic sortation, Croke said candidate projects can include those that improve the quality of postconsumer-recycled PP, MRFs that can justify the addition of conveyors and optical sorters, as well as those that, by adding or updating star screens to a smaller gauge, can efficiently sort nonbottle rigid and small format plastics into a mixed bale and reduce contamination to other streams.

Croke sat down with Associate Editor Megan Workman at SERC to provide insight into how CLF’s work is paying back and why it will continue to fund material-specific projects, including glass, films and multilayer flexible packaging.

Recycling Today (RT): CLF is in its third year. In what ways are the investments CLF has made paying back?

Bridget Croke (BC): We’ve invested in 11 projects so far and about $25 million so far, and that’s over the last two-and-a-half years. We expect once we close the deal with each investment there is a payback schedule and every single investment is paying back on time as expected, which is really exciting because a lot of funds expect to have some challenges with payback and a certain number of projects, and so far we have a great record of the financial payback from everyone. We’re starting to track our impact metrics as well, and those are really strong … We’re both getting the impact measures we want to see and the financial payback, so it’s really exciting. 

RT: CLF is currently seeking RFPs for polypropylene-focused projects to increase that material’s recovery rate. What is the value in upgrading or expanding equipment and infrastructure? 

BC: PP has been a really interesting story because the value has increased so much over the last 10 years or so on a material type that had almost no market at one point, so we see that as a big success story. Many of our investors play in PP, and they want to incorporate more PCR (postconsumer recycled resin) in their packaging, and polypropylene is a big part of that, so that’s kind of a focus area for us for that reason. But, at the same time, we’re seeing that if plastics [Nos.] 3s through 7s at a MRF don’t have a market, then some of it is going to end up in the stream and become contamination for them. We want to increase the value of those materials, get more material recycled that is hard to recycle today or that has value that is not being captured. We see PP as one of those key items that could have a lot of value, and a lot of it is going to landfill today, so we want to ensure that municipalities know that it can be collected, that MRFs have the appropriate ability to either sort it or get it into a mixed bale where it can go to a PRF or a secondary sortation facility or sorted out completely to get the value for that material.

RT: Does CLF plan to fund other material-specific projects in the future? Why focus on specific commodities?

BC: On the collection side, we’re looking at increasing commodities across the board that fit in. Once we start getting into sortation and reclaiming and market development, we’ve looked at the material types, and we want to both increase the volume of the materials that are already accepted today, that have high value and are already pretty systemized. And then we’ve looked at what are the next opportunities to either decrease contamination or increase value for the MRF and then for end markets. And so we’ve identified a number of more difficult materials today or ones that aren’t maximizing that value. PP is a really big one. Glass is another one that we hear a lot about, and so we’re doing a lot of work both on sortation and on end market development for glass to try to improve the value of glass and make it more cost-effective to sort and then transport that to the end markets. We’re starting to look into films and multilayer flexible packaging, and we’ve done that a bit through our foundation because we haven’t found projects that are ready to fund through our debt fund, so those are additional material types that we’re working on, but they’re not quite ready; but, we do hope to make some investments over the next two-and-a-half years in that space as well.

RT: What kind of feedback has CLF heard from recyclers regarding its work?

BC: We’re finding ways to capitalize the system, and everyone likes that obviously; there’s been a high demand. We’ve seen about 160 proposals or so for about $350 million worth of projects. We’ve funded about 12, so there’s clearly a big gap in the need, and we’re hearing that pretty loud and clear from the industry across the board—municipalities, MRFs and then reclaimers and end markets. Across the board folks are looking for a variety of different kinds of funding, and even we can’t meet the demand for that. We’re getting really positive feedback from folks that want to get funded. And we’ve done a lot of work to make sure that we’re working on the right issues, so we’re working with all of the different industry groups to make sure we’re going after the right types of projects as we get more targeted and what we’re looking for. We’re getting a lot of positive feedback on the types of projects we’re looking for and the types of projects we’re funding as well and the successes that we’ve had out of that. But, we’re doing a big project right now that we’re calling Capital Landscape Study to better understand the scale of that need and what other funders are out there that we can pull in to try to really increase the funding because our goal is to catalyze more investors into this space and really get the scale we need. We feel like we’re making a significant impact, but the real impact comes when we can prove to investors across the board that these are valuable investments so that a lot of other capital can flow into this market. We feel like now we’ve started to prove that case so we want to make sure we understand the whole system and who’s out there and how we can get even more projects funded. 

RT: … It’s figuring out which ones are the true, right-now projects and proving to your investors that their money is well spent.

BC: … And proving that we’re unlocking some of the economic bottlenecks that are going to make the system work on its own, so we don’t want to do anything that’s going to be a one-off project. We want to prove that they’re replicable, and so if we improve the value of PP, then it’s a better economic story across the board, and the MRFs make more money and then they can invest more in improving their own infrastructure. Same with glass—if we can take that from being a cost to a point of value, then suddenly the whole economics shift and it unlocks something that just makes the system work better. Those are the kinds of things that we’re trying to target our money toward: taking broken parts of the system and fixing them.