Two major players in the Australian packaging value chain, Amcor and Mondelez, have signed investment agreements that will enable Licella to accelerate construction of its advanced recycling facility in Altona North, Melbourne.
The advanced recycling facility will be one of the first of its kind in Australia, and will deploy advanced recycling pioneer Licella’s Australian-developed Catalytic Hydrothermal Reactor (Cat-HTR) technology to recycle end-of-life plastic back into a crude oil substitute suitable, to produce new food-grade plastic packaging.
Cat-HTR is an advanced hydrothermal liquefaction (HTL) technology, which uses hot, pressurised water to continuously recycle end-of-life plastic that would otherwise be sent to landfill. The new facility in Melbourne, called Advanced Recycling Victoria (ARV), will initially process ~20,000 tonnes per annum of end-of-life plastic, with plans to scale up to 120,000 tonnes per annum.
Amcor Flexibles head of sustainability Richard Smith told PKN this investment marks a significant milestone in the development of a circular economy for flexible plastics in Australia. Smith has long been an advocate of a collaborative value chain approach to solving packaging waste challenges.
Amcor had already signed an MOU to invest in Licella's ARV facility, the partnership with Mondelez will accelerate progress. The Mondelēz International deal is expected to close in the coming days and the Amcor deal before year end.
Through Amcor, Mondelēz International will have access to recycled content from this site to meet much of its Australian soft plastic packaging needs, significantly reducing its need for virgin plastic in Australia.
Confectionery and snacks giant Mondelez has already converted its Cadbury Dairy Milk flexible wrappers to 30 per cent recycled content, with material supplied by Amcor from imported sources. The goal with this investment is to create circularity for Australian PCR content. Until the site is operational, Mondelez will continue to import the material to meet its target for 30 per cent PCR content in its packaging.
CEO of Licella, Dr Len Humphreys, said it’s this kind of leadership from industry that’s needed to help bring Australia closer to more sustainable plastic waste solutions that deliver both economic and environmental benefits.
“The investment from Mondelēz International and Amcor ANZ has come at a crucial time in the progression of the ARV project and will help advance us to the next stage of viability, moving towards construction of this Australian first advanced recycling facility.”
Although the scale of the investment has not been disclosed by either company, previous reports indicate that phase one of the plant, which would yield around 20,000 tonnes processing capacity, would cost about $80 million, and as capacity increases to 120,000 tonnes, the investment would rise to $200 million.
“This is the leading technology of its kind globally and this project will be a key lever for companies to deliver on the national sustainable packaging targets as demand for sustainable plastic solutions grows here and overseas,” Humphreys said.
The facility is to be constructed on the former Dow Chemicals site in Altona North. Marketing director of Licella, Andrea Polson, told PKN that site preparation is well underway. She said the concrete slab is in place, and a fair number of the former factory facilities, like storage silos and sheds, pipe racking and the like will be repurposed and recommissioned where feasible.
“Once construction starts we’re looking at an estimated 18-month build, so we anticipate the plant will be operational in two years. This will also allow time for the industry to develop, in parallel, the collection infrastructure that will ensure the plant has access to sufficient feedstock,” she said.
Mike Cash, president of Amcor Flexibles Asia Pacific, said that through this investment Amcor will be able to meet increasing customer demand for recycled content in the region, as well as take another step closer to achieving its target of 30 per cent recycled content across Amcor’s portfolio by 2030.
“We’re excited to be joining forces with Licella and Mondelēz to enable the local production of innovative packaging made from local end-of-life plastic,” Cash said. “By partnering with key leaders across the value chain, we can help strengthen recycling systems and advance circular solutions that reduce packaging waste well into the future.”
Darren O’Brien, president Mondelēz Australia, New Zealand and Japan, said, “We’re committed to taking the lead and responding to our consumers who we know want their soft plastic wrappers to be recycled again and again. We set new ground when we sourced the equivalent of 30 per cent recycled content for our Cadbury family blocks but our ambitions are much greater than this.”
“We’re on a mission to becoming the most sustainable snacking company in Australia and New Zealand and by collaborating with peers and investing in better systems at scale, we’re making our business more resilient, while creating long-term value for the country and world at large,” he said.
[Ed’s note: This news demonstrates the importance of collaboration and investment from major players if we’re going to successfully scale up Australian packaging recycling innovation. And it demonstrates that demand for recycled packaging exists from big brands, creating the all-important pull-through that determines the feasibility of this type of infrastructure development.]
