Circular.co Connects Sellers and Buyers of Recyclables

The global recycled plastics market was worth $47.60 billion in 2022 and is expected to see a compound annual growth rate (CAGR) of 4.9 percent from 2023 to 2030. But recycling infrastructure woefully lags in the face of this growth.

A disconnect between buyers and sellers is at the heart of the problem, and it’s fueled by a lack of information available to these stakeholders, believes Shannon Gordon, COO of Circular.co.

The answer to the problems lies in data in her view. She explains how Circular.co leverages data to help inform buyers’ and sellers’ business decisions.  And she discusses other technologies to address some of the hardest problems in the world of recycling.

Waste360: What market factors are driving demand for recycled plastics, and what is this meaning for the industry? 

Gordon: Regulatory pressure and consumer demand are two key factors driving the growth in recycled materials. On the policy side, the UN Global Plastics Treaty targets international supply chains while local/ domestic legislation [to advance recycling] is becoming more pervasive. The majority of European countries have policies in place already and the U.S. has a number of bills proposed for this year’s legislative session. As these Extended Producer Responsibility (EPR) schemes kick in, manufacturers will face stiff financial implications if they do not meet requirements.

On the consumer demand side, McKinsey recently released a report that shows products that make ESG-related claims average 28 percent growth over a five-year period vs 20 percent for products that do not. Consumers are voting with their dollars and brands are listening. Most major brands have some form of commitment to reduce dependence on virgin plastic and replace it with a sustainable alternative.

Waste360: What are core issues and challenges for buyers and sellers of recycled content?

Gordon: In our conversations with buyers, we hear that they can’t find the material they are looking for; the price premium on recycled plastic vs virgin is too high; and they experience variable quality in the product.

In our view, these problems exist because of a lack of transparency and communication between buyers and suppliers. There is no data readily available that helps buyers understand what’s practically possible in the market, who to buy from, and what’s an appropriate price. Without this information, buyers are left with the inefficient process of trial and error.

The process is no easier for suppliers who struggle to secure consistent and predictable customers. Sellers are going to market somewhat uninformed as there is little pricing or material information. So how do I price my product? And they don’t know where to find demand. Unpredictable demand leads to financial uncertainty, which in turn leads to price premiums and volatility.

Waste360: How can technology address the supplier-buyer disconnect? And how are you working on this?

Gordon: We believe the answer lies in data. Helping buyers and suppliers get the information they need to make good business decisions is the key to ending the cycle. At Circular, we’ve developed AI that aggregates data on the world’s supply of PCR and makes it queryable. We can answer questions like: What is the range of performance I can expect from recycled polypropylene sourced in Southeast Asia? What is the true market price for that material? Which suppliers are the best match for my application?

Empowered with this data, buyers can procure material much more quickly and with a higher rate of success than before. On the other side, suppliers get connected with relevant demand they may have never otherwise found.

There’s plenty of precedent for this in the tech world: think of LinkedIn. Twenty years ago, if you wanted to make a hire, you had two options. You could rely entirely on your own limited network or you could hire a recruiter to find someone you don’t know. Either way, the search is either incomplete or opaque and expensive. LinkedIn aggregated the world talent “supply” and then provided tools to filter the universe of possible to the most relevant view. I make this analogy to show how  data aggregation and transparency can help markets operate more efficiently.

Waste360: What other tools do you offer and how are they designed to support buyers and sellers?

Our product has four modules to support companies in their sustainability journey. In our Explore module, we allow buyers to search our database on the exact product specs they need and get insights about what’s available, where, and for how much.

Our Search module allows buyers to identify the set of relevant suppliers that meet their needs - from product spec to compliance to logistical requirements. Vetted suppliers provide custom quotes in days, not months.

Once a buyer has selected the right suppliers, our Procure module allows them to interact efficiently. The two parties communicate directly with 100 percent transparency into documentation, material test requirements and results, contract redlining, etc.

Lastly, our Manage module helps buyers manage and mitigate risk in their sustainability supply chain. We provide digital tools for managing logistics, tracking and tracing, and reporting of avoided emissions.

Waste360: Just how much impact do you think you can have as one tech company?

Gordon: We launched our product about six months ago. In that time, we’ve done nine searches with large global brands for a total of 35,000 megatons of recycled material. On average, we’ve saved buyers 10 percent vs market price and conducted the supplier search in a fraction of the time. We’re proving that, more often than not, the green premium is a myth.

There is no doubt that this is a complex industry that needs much innovation - there’s room for plenty of companies in the space - but we’re very excited about the impact we’ve already had and know that it’s just the beginning.

Waste360: What other technologies out there can complement your platform if you feel there are some that can?

Gordon: Our product supports buyers from strategy and portfolio planning through supply chain management. The natural complement to our product is carbon accounting software that allows companies to measure and report on the CO2 avoided emissions from their sustainability projects. It’s such an important piece of the puzzle that we’ve integrated with Gravity Climate to provide access to their tools through our software. 

Waste360: Can you speak to how technology in general can help address some buyers’ and suppliers’ hardest problems in the world of recycling?

Gordon: I’m pretty excited about technology innovation that we see happening throughout the value chain. In collection, we’re seeing pockets of innovation from private companies that collect and sort waste for you like Ridwell here in San Francisco. Companies like TOMRA and AMP Robotics are building AI to improve sortation.

Though it has yet to be proven commercially viable, chemical recycling has the potential to dramatically change the industry. And we’re seeing new alternative materials like bioplastics emerge as well. All of this innovation is being fueled by growing investment in the industry, so I expect we’ll continue to see big leaps in tech that solves challenges at each stage of the value chain.