Dive Brief:

• Minnesota-based Eureka Recycling will receive more than $10 million to assist with an upgrade of its single-stream MRF in Minneapolis that is targeted to be done by 2025.
• The nonprofit recycler will install new optical sorters to decrease contamination and increase the recovery of select commodities. It estimates the upgraded facility will capture an addition 222 tons of PET and 248 tons of aluminum per year.
• Closed Loop Partners’ catalytic private credit arm led the $10 million loan, which includes $3 million from American Beverage and the Minnesota Beverage Association. The Recycling Partnership also provided $350,000 in grant funding.

Dive Insight:

Closed Loop Partners, a brand-backed group that invests in a wide range of recycling initiatives, has been active for more than 10 years. Its private credit arm, the Closed Loop Infrastructure Group, reported investing more than $225 million into 48 projects through the end of last year.

These projects include a range of collection, sortation and processing investments, including multiple others in partnership with beverage groups. This latest announcement marks CLP’s fourth loan to Eureka to date. The nonprofit recycler is also a regular partner with the group on other initiatives, such as a recent study of how artificial intelligence-enabled technology can capture more polypropylene.

In addition to boosting PET and aluminum recovery, Eureka also anticipates its latest MRF upgrade may increase recovery of polypropylene, polyethylene, mixed paper and cardboard.

“This loan funds key upgrades that bolster our resilience to changes in the recycling material stream and shifts in policy across the U.S.,” said Miriam Holsinger, Eureka’s co-president and chief operating officer, in a statement.

Eureka processes an estimated 100,000 tons of material per year and also provides select collection services in the region. Last month, St. Paul announced that Eureka won a new five-year contract to collect recyclables from an estimated 80,000 residential properties in the city.

"We see immense opportunity to support independent recycling operators that are building the necessary infrastructure for a circular economy in the U.S.," said Jennifer Louie, managing director and head of the Closed Loop Infrastructure Group, in a statement.

This marks the fourth investment done in partnership between CLP, American Beverage and The Recycling Partnership.

Eureka is also preparing for a much larger shift in its market following Minnesota’s recent passage of an extended producer responsibility law for packaging. The final law was seen as a compromise between recyclers and brand-backed groups, including support from some groups such as American Beverage that have opposed EPR proposals elsewhere.

For years it has been common for major food and beverage companies to prefer smaller-scale investments recycling collection and processing projects via groups such as Closed Loop Partners and The Recycling Partnership rather than supporting broader state policies. That tide has begun to shift as five U.S. states move to implement packaging EPR laws and a brand-backed group has become the lead producer responsibility organization in many of them.