The CEO of an incubator that aims to commercialize alternatives to plastic discusses how Oregon is ripe for innovation.
It is Earth Day on Sunday, April 22, and we are marking the occasion with a look at how the business community can solve the plastic pollution crisis.
This year, the Earth Day Network, a global environmental movement that originated in 1970, is focused on galvanizing support for a global effort to eliminate single-use plastics. The accumulation of these plastics, most of which end up in oceans and waterways, is one of the biggest environmental problems of our time.
Each year, at least eight million tons of plastics leak into the ocean. Under business-as-usual conditions, the ocean is expected to contain one ton of plastic for every three tons of fish by 2025, the World Economic Forum report finds.
In this conversation, Daniella Russo, CEO of Think Beyond Plastic, a California business incubator, explains how plastic recycling is no longer viable, how Oregon is a perfect place for alternative materials innovation, and how businesses are catching on to the benefits of a new plastics economy.
At the beginning of this year, China banned U.S. imports of recyclable plastic. How has this affected the business environment for alternative plastics manufacturing?
There is so much single-use and disposable plastic, which is the fastest growing segment of plastic production and consumer packaging, that recycling is no longer a viable solution. It hasn’t been for quite a while, but now we are discovering it really isn’t.
A material will only get recycled if it gets collected and if there is market for that material. Around the world, less than 14% of plastic is recycled for a variety of reasons. One is the market is not very lucrative anymore because of the low price of natural gas. We have arrived at a conundrum where the recycled material is more expensive than virgin plastic. When that happens, all the economic incentives for collecting and recycling get wiped out. The onus is on waste management facilities in the U.S. and around the world to deal with the collection and treat it as trash.
China had a little bit to do with this, but it is part of a bigger picture of a world where recycling is not necessarily the way to go. It is not lucrative. A lot of plastic gets exported to Vietnam as well, so if it is not one country with a lack of environmental regulations others can be found.
What is a viable business solution to replace plastic recycling?
The single-use and disposable plastic – the bottles, the cups, the lids, the utensils – they will never be a good recyclable target. If we want to solve the problem of plastic pollution we need to look into the use of different materials.
We should look for different material in consumer food packaging. There are a lot of chemicals used to make food packaging. They leach endocrine disruptors that make it highly unsuitable for food packaging and beverage applications; although this is primarily where it is used because it has good properties for food transportation and food presentation. We should look for different material in products that are specifically intended to be thrown away so they can disintegrate.
Daniella Russo, CEO of Think Beyond Plastic
Agricultural plastics also. Fields are being covered in plastic mulch; that is beginning to be a dominant trend now, not just in the U.S. but China. Plastic is used in agriculture to cover the fields, to protect the crops, to keep a certain temperature and moisture down. That plastic mulch has to be lifted at a certain point from the soil or it will break down and disintegrate in the soil. When that happens we don’t know what it will do to microbial life because plastic has chemicals in it.
We definitely see the consumer packaging sector is ready for change and disruption. In that sector there is benign material we have known for an eternity, like paper, cellulose, lignin-based materials. Paper we used 50 years ago is the not the same we can use today. We can add other materials that are food grade and that will increase the performance of paper to be more sturdy and more moisture resistant and to be able to contain foods. That is one area we are focusing on.
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How much interest is there from the business community in manufacturing alternatives to plastic food packaging?
There is interest. But it is not an easy problem to solve. On the one hand, we want products that do not last forever; on the other hand, they need to have a long shelf life. If you want degradable or ocean degradable material, it would be difficult to use this for packaging of liquid. That said, there is a whole set of companies that are looking into this. Carlsberg is one of them. They made a big commitment to create a bottle out of wood particles. That bottle will be able to contain carbonated drinks. It is not an easy proposition, but they are working with a start-up and an investor, who are committed to making it work because this is a multi-billion dollar market. Whoever comes up with a solution that meets these needs will most likely be the market leader going forward.
There is a big industry effort on multi-laminates – material that is used for snack packaging. It is very thin, but it is highly unrecyclable because there are several layers of plastic. The waste makes it difficult to collect and the nature of the material makes it difficult to recycle. There is a group of companies which have committed to reinvent that packaging. We are working with some of them to help create the next generation of material that has the right food preservation properties.
A big issue are the little sachets that are used for spices and condiments. There are all sorts of material properties issues with them because if you have something that is highly acidic, like ketchup or mustard, it tends to eat through the material unless the material has the right properties. They are highly polluting; not just in the US but in developing countries where there is no recycling and collection infrastructure.
How much interest is there in Oregon for alternatives plastics manufacturing?
I presented at Oregon BEST two years ago because Oregon would be a perfect source for this type of innovation, particularly because of the lumber industry in the Pacific Northwest and the availability of waste material. That material can be repurposed and can be an excellent source for new packaging. We don’t have a company out of Oregon yet in our portfolio, but I am sure they are out there. I am sure it is a function of just not knowing who they are yet. There is great innovative spirit in Oregon and also there is the materials resource base.
How effective is waste material from the lumber sector in the creation of alternatives to plastic?
It is very effective because it has properties that, with the proper handling, can approximate the applications of plastic. We have several companies we work with that use wood particles processed in a particular way to create an alternative to agricultural sheeting. Sheets used to cover the crops can be made out of a material that can be mulched at the end of the season and out in the soil. That could be paper or wood particle-based material, lignin or cellulose.
I am hoping Oregon entrepreneurs reach out to us because I can’t imagine there isn’t anyone working on this in a state with so many natural resources.
What is the biggest barrier to manufacturing plastic alternatives?
It is a tough market to get into. It is asset heavy and it is materials innovation. You need access to materials innovation labs. For the most part they exist in academia in research labs or at the big companies. At Think Beyond Plastic we recognize this and are opening an innovation center that will offer that kind of equipment in a competitive space to entrepreneurs dedicated to creating bio-benign material and design for products packaging.
The other issue are investors. This type development requires patience and capital. There are no unicorns where you can make a billion dollars quickly and get out of it. It is slow and important and strategic for the planet and society. Therefore, there has to be some government funding. That is how it works in Europe. The companies we work with in Sweden, Germany, Norway – all of them have started with R&D funding from governments. Here it is more difficult. The government feels we have a lot of private-sector initiative and it is the private sector’s job. The private sector is excited about unicorns and digital technologies. This kind of materials development is difficult to fund.
Photo credit: Caroline Power
What will happen in the next decade if the plastics issue is not addressed?
We know the earth is going to add 2.5 billion people in the next 30 to 40 years. That is a projection by the United Nations, and we know it to be true. We also know the majority of this growth will happen in coastal areas, because 80% of the population lives within 100 km of a coastal zone. With population growth, what will happen is a correlated growth in waste. This waste is plastic because of our consumption patterns. Most of it will be around the ocean or waterways.
Our oceans and waterways stand no chance of survival at the present rate. It has to change. The way to change it is switching to using new materials if we like the convenience of disposability; switching away from conventional plastics; and society working with business where business understands the new generation of consumers demand social responsibility from them. It is not just something they can shirk off to recycling.
What needs to happen in the U.S. to kickstart interest?
There is interest on the side of consumers. The global movement to raise awareness about plastic pollution is about 10 years. I was at the forefront and I co-founded one of the first organizations talking about this, called the Plastic Pollution Coalition. That was in 2009. We are reaching a critical point of awareness and understanding. What is lagging behind are the solutions because awareness and understanding are not enough. We lean on plastics for a lot of good reasons. The big question is how do we work with businesses which understand that demand and are willing to convert it into investments in new packaging.
All this can happen if one or two major brands put a stake in the ground and make an investment in a new kind of packaging. That will open a floodgate for others to follow.
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