The Next Chapter Of Recycling Is Here, And This Micro Cap Is Working To Be A Leader In The Space

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Tuesday, April 19, 2022

Garbage. It’s been a problem for the planet ever since people started gathering in groups. 3,000 years ago, people in Knossos, Crete used to bury trash to hide it. Come 500 B.C., Athens made it a law that people trek trash at least one mile outside the city before disposing of it. Fast forward 2,500 years and Waste Management (NYSE: WM) and Republic Services (NYSE: RSG) are worth $100 billion combined, as the biggest U.S. operators of landfills disposing of large portions of the 1,700 pounds (773kg) of garbage each American generates annually.

The problem is that burying waste or burning it is not sustainable or good for the planet. Recycling programs have been around for 40 years, proving some worth, but mostly demonstrating that conventional methods are inefficient and expensive. To that point, only about 16% of the 2.1 billion pounds of municipal solid waste generated globally each year gets recycled. Safe to say, traditional recycling programs are in crisis mode.

Thankfully, the next chapter in recycling is being written right now.

There has been a shift to place more of the onus on producers to come up with solutions for a circular economy, especially with regards to packaging, a leading cause of pollution. Known as Extended Producer Responsibility (EPR), companies are incentivized to engineer new product life cycles where materials that can’t be reused are eliminated, and others are returned to the factory.

In EPR strategies, companies shoulder the burden of collecting, sorting, and recycling post-consumer packaging, making them a whole lot more conscious about how products, particularly plastics, are manufactured so that they can be recycled less expensively. This means that producers are responsible for educating consumers about recycling programs and for developing eco-friendly packaging.

Being “responsible for,” doesn’t mean manufacturers are doing it all on their own. Far from it. New companies and organizations are cropping throughout North America to participate in the process.

For instance, non-profits like Cleanfarms have surfaced as part of the solution. On a macro level, Cleanfarms is a Producer Responsible Organization (PRO) that is specific to the agricultural waste market and representative of what is happening within the industry on a larger basis by helping producers fulfil their EPR obligations. PROs are funded by producers to organize and manage recycling programs to ensure that products make their way back to the producer as part of the circular economy. As such, PROs forge partnerships throughout the value chain to meet the demands of their funding members.

With EPR commonplace today and companies constantly on the lookout for ways to simplify and modernize, there are some unique opportunities available.

Aduro Clean Technologies Inc. (CSE:ACT) (OTCQB:ACTHF) is a new kid on the block as a Canadian developer of patented water-based technologies that can, amongst other things, chemically recycle plastics. Aduro has developed and is looking to soon commercialize a new process branded Hydrochemolytic™ technology.

An example best explains what Aduro is aiming to bring to market and why it could dovetail perfectly into a circular economy, or an EPR scheme. A producer uses a single-layer plastic for making a fertilizer container, or tote. Once a farm uses the contents, the tote is effectively “waste agricultural polyethylene” that Aduro’s system can mechanically shred and then break it down at the molecular level to convert it back into virgin material for use in manufacturing another polyethylene tote. There’s no waste plastic and even the water can be recycled and reused within the Aduro system.

The example isn’t haphazard hyperbole. On March 28, 2022, Sarnia-based Aduro signed a letter of intent to partner with Switch Energy for the purpose of developing, building, and supplying a pre-commercial pilot plant to convert waste agricultural polyethylene into high-value products.

Why Switch? Because Switch knows waste agricultural plastic. In fact, Switch is a recycler and operator participating in Canada's agricultural and industrial film recycling program that owns and operates the largest collection program for agricultural waste in the province of Ontario. Switch has been in the business for over 10 years, with experience in not only collecting plastic agricultural waste, but also design and development of plastic washing, mechanical shredding, feed systems set-up, and product offtake sales and marketing.

Aduro added cash to its coffer to move the project forward, last week closing the first tranche of a $2.0 million private placement comprised of C$1.56 million in aggregate gross proceeds.

"As we continue to deliver on our strategic plan, we are pleased to see the positive response from our growing investor base,” said Aduro CEO Ofer Vicus in a press release on the raise. The news also noted that members of the Aduro Board of Directors also participated in the private placement. Insider buying is a common practice at Aduro, according to data from CEO.ca, a strong sign of confidence that management believes in what it is doing.

Where this can lead is certainly worth speculation. What is indisputable is the fact that Aduro is starting to look like a natural fit for a circular process, first with polyethylene with the potential to expand into different recyclable materials in desperate need of a re-imagining of the supply chain.

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Aduro Clean Technologies Inc. (CSE:ACT) (OTCQB:ACTHF) Full Corporate Write-Up: Click Here.

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