Ian Thomas, Managing Director, Turquoise
The circular economy is rapidly transforming waste management across the UK and Europe, presenting significant investment opportunities in innovative, low-carbon solutions. As the European Environment Agency reports, Europe’s circularity rate reached 11.8% in 2023, indicating a growing preference for recycled materials in manufacturing and production.
At Turquoise, through the Low Carbon Innovation Fund 2 (LCIF2) which we manage, we have supported pioneering companies driving this transition. Our investments focus on scalable technologies not only mitigating environmental impact but also offering compelling returns.
What is the circular economy?
The circular economy is a system designed to extend the lifecycle of products and materials through sharing, leasing, reusing, repairing, refurbishing, and recycling. The EU aims to achieve a fully circular and climate-neutral economy by 2050, with an interim goal of doubling the use of recycled materials between 2020 and 2030. The bloc is making strong headway towards achieving this goal by implementing key policies, including the Circular Economy Action Plan, the Ecodesign Directive, and the Right-to-Repair Directive.
Reducing electronic waste
Electronic waste is a significant environmental challenge, with traditional printed circuit boards (PCBs) contributing to toxic pollution and resource inefficiency. Jiva Materials is addressing this issue with Soluboard®, a biodegradable PCB substrate made from plant-based materials. Soluboard® reduces embodied carbon by 60% compared to traditionally manufactured PCBs, as well as facilitating the safe recovery of used electronic components and minimising e-waste.
The total available market (TAM) for PCBs is expected to see substantial growth. In 2023, the global PCB market—including single-sided, double-sided, and multilayer PCBs—was valued at USD $67.93 billion and is projected to reach $926.41 billion by 2039, growing at a CAGR of 5.46%.[1]
A farewell to plastic packaging
Packaging waste (particularly from plastics) remains a global concern. Recycling is often seen as a solution, but the reality is more complex. In the US, for example, fewer than 30% of plastic bottles are recycled, while most are ‘downcycled’ – used to make lower quality products rather than being returned to their original use. Disconcertingly, a recent lifecycle assessment from IVL Swedish Environmental Research Institute found that ‘downcycling plastics’ – has almost as much climate impact as incinerating it.[2] These findings show the need to reduce plastic use at source.
Striving to alleviate this issue is Archipelago Technology Group, which has developed Powerdrop™, a precision coating system that enables a shift to fibre-based packaging. Through extremely precise application of coating materials, Powerdrop™ drastically reduces material waste and allows fibre substrates to displace plastics whilst being fully recyclable and biodegradable. Our investment in Archipelago via LCIF2 is driving the company’s next stage of growth and supporting its expansion towards large-scale adoption.
Archipelago’s strong supply chain relationships (with coating manufacturers and others) are supporting preparations for the next phase of expansion. To further accelerate production and international rollout, Archipelago has launched a new funding round, with plans to raise £5 million.
Connected Energy
The rise in popularity of electric vehicles (EVs) is accelerating the urgency of implementing effective end-of-life battery management strategies. Our portfolio company Connected Energy pioneers second-life EV energy storage, extending the useful life of lithium-ion batteries by up to ten years and cutting 450tCO2e per 1MWh installed. This approach not only enhances grid resilience but also exemplifies the principles of reinvention and reuse central to the circular economy.
Investor interest in Connected Energy is growing – unsurprisingly, given that it’s one of the few companies worldwide to have successfully demonstrated that second-life vehicle batteries can be repurposed for commercial battery storage systems. Supported by LCIF2 and a group of leading blue chip companies including Volvo and Caterpillar, Connected Energy is scaling technology and operations to meet rising energy storage market demand.
Investor guidance
Savvy investors must ensure that potential investments align with current and forthcoming regulations, such as the EU’s Circular Economy Action Plan, which outlines initiatives across the entire product lifecycle, targeting design, promoting circular processes, and encouraging sustainable consumption. Investors can leverage this by identifying companies that are innovating in sustainable packaging, advanced recycling technologies, and circular economy solutions.
Secondly, consider market scalability. Focus on solutions with the potential for widespread adoption, ensuring that the business model is economically viable and impact ready. Also prioritise technologies offering measurable environmental benefits. LCIF2, for example, invests in businesses demonstrating significant, tangible carbon emissions reductions.
The transition to a circular and low-carbon economy is not only a regulatory imperative but also an attractive investment landscape. By supporting innovative solutions that address waste and resource challenges, investors can achieve high returns while contributing significantly to environmental stewardship.
[1] Printed Circuit Boards: Technologies and Global Markets, September 2024
[2] https://packagingeurope.com/news/downcycling-plastics-almost-as-damaging-as-incineration-lca-cautions/12474.article
