Tackling the Plastic Crisis: Breakthrough Innovations Leading the Way

Across the entire plastic lifecycle, new solutions are being developed that have the potential to drive real change.

In our last blog, we explored the state of the plastic crisis, touching on key legislation and litigation efforts at local, national, and international levels. While these policy developments are crucial, we’re particularly excited about the market-driven innovations emerging to tackle this issue head-on. Across the entire plastic lifecycle, new solutions are being developed that have the potential to drive real change. In this post, I’ll highlight a few promising areas that I find most compelling.

Advanced recycling

There’s no mitigating the plastic crisis without improving and expanding our recycling efforts, and doing so at scale. The reality is that less than 10% of plastic gets recycled, meaning there is significant room for progress. Fortunately there are several compelling recycling technologies and advancements happening all around the world.

Companies like Loop Industries and Carbios are pioneering advanced chemical processes to break down plastics into their base monomers, enabling infinite recycling without quality degradation. Meanwhile, innovations in AI and robotics, such as those developed by AMP, are enhancing the efficiency of plastic sorting in recycling facilities, ensuring better material recovery and less contamination (inadequate sorting abilities is actually a major hindrance to recycling efforts!).

On the investment side, Circulate Capital, led by Rob Kaplan, stands out as a leader in financing circular economy solutions in high-growth markets. Founded in 2018 with a focus on combating ocean plastic pollution in South and Southeast Asia, Circulate Capital’s work is particularly crucial given that high-income countries often export their plastic waste to developing nations in this region. This exploitative practice—akin to dumping trash in someone else’s yard—has long burdened these countries with disproportionate plastic waste, harming both their environment and human health (due to microplastic exposure). By establishing a presence in these regions, Circulate Capital is working to develop localized, scalable solutions that address plastic pollution at its source.

For example, Circulate Capital’s portfolio companies have made significant strides in scaling PET (short for polyethylene terephthalate, a popular plastic often used for bottles) collection and recycling capacity across Indonesia, India, and Brazil. In Brazil, its investment in Cirklo is laying the groundwork for the region's largest independent PET recycling facility, with the capacity to process over 4 billion bottles annually, setting a benchmark for scalable recycling solutions. In India, Srichakra has tripled its food-grade PET recycling capacity by launching two new bottle-to-bottle recycling lines last year. And in Thailand, Union J.Plus has expanded its operations by acquiring a polyolefin recycling facility capable of processing 18,000 tonnes per year.

And this is just a small sampling. We’re seeing a growing emphasis on scaling recycling infrastructure to reduce the burden of plastic waste on communities and ecosystems worldwide.

Reuse and refill business models

One of the biggest drivers of our plastic waste crisis is single-use plastic, which makes up nearly half of all plastic produced today. Designed for one-time use, these plastics are quickly discarded, leading to extraordinary levels of waste. Shifting away from this linear consumption model and toward systems where packaging and containers are reused multiple times could significantly curb this issue. The beauty of reuse and refill models lies in their potential to reduce both the demand for new plastic and the overall waste generated. Additionally, widespread adoption of these systems could cut greenhouse gas emissions associated with plastic by nearly 70%.

The concept of reusing containers isn’t new. Many of us already use reusable water bottles or lunch containers, and some businesses, like Starbucks, allow customers to bring in their own cups for beverages. But what if we took this approach further—building the infrastructure and incentives necessary to integrate reuse and refill systems into the broader economy?

The Ellen MacArthur Foundation, in partnership with New Plastics Economy, has outlined four primary reuse models that can transform how we approach plastic packaging. In the refill on the go model, customers bring their own reusable containers to stores to fill them with items like grains, coffee, or cleaning products. The refill at home model allows consumers to receive product refills by mail, which they use with containers they already own. The return on the go system lets businesses provide reusable containers that customers can borrow with a refundable deposit and return at designated drop-off points in grocery stores or coffee shops. Finally, the return from home model involves businesses supplying reusable containers that are picked up from consumers’ homes, cleaned, and recirculated.

These models aren’t just theoretical; there are already promising examples of their implementation. In Ottawa, a pilot project introduced reusable containers at grocery stores, enabling customers to purchase food items in them and return the containers at designated drop-off locations. Companies like Algramo have developed specialized dispensing machines that allow consumers to buy and refill a variety of everyday products—detergent, soap, pet food—in reusable packaging. Similarly, Loop has built a circular system in partnership with major brands like Coca-Cola, Unilever, and Nestlé. Loop collects used packaging from consumers and retailers, manages deposit returns, sorts and stores containers, and returns them to manufacturers for hygienic cleaning and reuse.

Scaling these systems will require collaboration among businesses, communities, and consumers, but the potential impact is enormous. By committing to reuse and refill initiatives, we can reduce plastic waste at its source, create more sustainable supply chains, and move closer to a truly circular economy.

Bioplastics

Everyone knows recycling is critical. And undoubtedly, emerging reuse and refill models are promising. But those alone are not enough. Ultimately, we have to truly and fundamentally reimagine materials from the onset. At Third Nature, one of our core investment focuses is on lifting up a new set of regenerative materials that will fuel the 21st century, moving us away from the extractive and pollutive materials of the past. Bioplastics – created from plants and other renewable materials – represent a foundational shift in how we think about materials, offering a sustainable alternative to the fossil fuel-based plastics that have dominated the past century.

That said, while there is exciting innovation happening in bioplastics…not all of it is created equal, and we must be discerning. EcoEnclose is a great company, under the leadership of Saloni Doshi, committed to accelerating the shift to innovative, sustainable packaging, and they’ve conducted extensive research on different biological packaging inputs, comparing the footprint and environmental impact of each – check out this graph. What they’ve found is that many inputs commonly touted as strong alternatives in plastic production – such as corn, sugarcane, or wood chips – actually threaten biodiversity, put pressure on terrestrial systems, require high volumes of freshwater, create nitrogen and phosphorus runoff, and still rely on fossil fuels for production! In contrast, seaweed is emerging as a standout alternative in the field of bioplastics – as it requires no fresh water, no fertilizers, no land, and actively improves ocean health and marine life.

This is why Third Nature has been bullish on seaweed-based plastics, and we’re not alone. According to Phyconomy, at least $43 million was invested in seven different seaweed bioplastics companies in 2024 alone. This surge in funding is fueling a wave of entrepreneurship and innovation. A notable example is the TOM FORD Plastic Innovation Prize powered by Lonely Whale, which is the only global competition dedicated to developing scalable and biologically degradable alternatives to traditional thin-film plastic. Remarkably, the three grand prize winners—Sway (a Third Nature portfolio company), Zerocircle, and Notpla—all focus on seaweed-based solutions!

Market interest in seaweed-based plastics is also gaining traction with consumer brands. Late last year, Sway announced partnerships with four fashion brands—prAna, Faherty, Alex Crane, and Florence—to introduce their polybags made from seaweed, plants, and compostable polymers. These bags are even printed with ink derived from algae (versus the environmentally harmful, but traditional option, carbon black), further emphasizing the potential for regenerative materials to reshape the packaging industry.

Bioplastics represent an essential shift in the plastic lifecycle—one that is imperative to meaningfully address the plastic crisis. While efforts like recycling are important, the most transformative change comes from disrupting petroleum-based plastic production itself. By shifting from fossil fuels to seaweed as the underlying feedstock for plastics—regeneratively grown with little to no inputs and compostable at the end of life—we can create a truly restorative and circular solution for the future.

The plastic crisis is a multi-faceted, urgent set of problems to be solved. But I’m so encouraged and inspired by the incredible innovations emerging (and working!) all over the world. The momentum is building – let’s keep it going!

#####

Be sure to follow us on LinkedIn and subscribe to our Substack for all the latest company updates and insights!