Plastic recycling tech pioneer Licella secures investment from Amcor for new facility

Zurich-headquartered Amcor (NYSE: AMCR, ASX: AMC) may have grown from its origins in Melbourne as the Australian Paper Mills Company in 1986, but the global packaging giant has returned home to invest in a ground-breaking advanced recycling facility led by Licella in the Victorian capital.

A feasibility study released late last year - supported by Amcor, Coles (ASX: COL), iQ Renew, LyondellBasell and Nestlé - found the facility proposed by Licella at maximum capacity could divert up to 120,000 tonnes, or close to a quarter, of used plastics sent to landfill every year in Victoria.

The Amcor Australia & New Zealand (ANZ) business has now reached a Memorandum of Understanding (MoU) with Sydney-headquartered Licella to invest in the project, which for stage one is expected to process 20,000 tonnes per annum of waste plastic utilising Licella's pioneering Cat-HTR technology.

The process would rely on collections activities to divert soft plastic waste from landfill or incineration, with this stage of the proposed project already approved by the Victorian Environmental Protection Agency.

Advanced recycling allows all types of plastic, like confectionery wrappers and bread bags, to be turned back into oil after use, then made into new food-grade packaging in Australia. The 2021 study found that using the oil created from recycled material in the local plastic packaging supply chain delivers a 64 per cent carbon dioxide reduction compared to crude oil.

The hydrothermal liquefaction technology Cat-HTR (Catalytic Hydrothermal Reactor) developed by Licella over the course of 14 years uses hot pressurised water to recycle carbon from plastic that would be otherwise considered at the end of its life, as well as an enormous amount of biomass residues.

Using water, the process controls thermo-chemical reactions and reportedly operates at lower temperatures than pyrolysis and gasification, also using less water and retaining more carbon in its products

The group currently has a commercial demonstration facility on the NSW Central Coast called Commercial Stage 1 (CS-1), and is co-owned with Canadian Forest Products (Canfor), a global leader in the manufacturing of sustainable forest products, through its joint venture Arbios Biotech.

As one of the first advanced recycling facilities to be built in Australia, the latest agreement supports Amcor and Licella's commitment to creating a local circular economy for soft plastics in Australia and helps advance Amcor's target to achieve 30 per cent recycled content across its portfolio by 2030.

"Licella and Amcor share a vision for a more sustainable future for plastic," says Licella chief executive officer and co-founder Len Humphreys.

"We are delighted to partner with Amcor as we develop our first Australian advanced recycling facility, with our Cat-HTR technology that enables soft plastic to be repeatedly recycled into food-grade post-consumer recycled content, which is rapidly increasing in demand both locally and globally."

Amcor Flexibles Asia Pacific president Mike Cash says Amcor is proud to be part of the solution, supporting the development of new technologies and creating a local circular economy for soft plastics in Australia. 

"We are proud to be able to help deliver a local supply of food-grade recycled content that can enable more customers to participate in a circular economy," he says. 

In 2021 Dr Humphreys described all partners involved in the feasibility study as important pieces of the puzzle for reducing plastic waste.

"I am grateful to them for coming on the journey with us. We’ve come together with a shared vision for a more sustainable future for plastic, and we all understand that we can do more together than we can individually," he said at the time.

Both Amcor and Licella will be undertaking further discussions on final terms and arrangements, which will be subject to respective internal approvals.