Kirkbi's climate arm is preparing to step up spending on plastics technologies, with plastics recycling "an area where we plan to invest heavily," CEO Anupam Bhargava said. He said the unit plans for its $1.6 billion portfolio to reach about twice its size within five years.
Looking ahead, capital will be divided about 50/50 between energy and recycling, concentrating on plastics and select EU markets. Following over ten years in climate investing, the team plans a more involved style, aiming for ownership positions large enough to wield "real influence" in boardrooms.
The EU's Packaging and Packaging Waste Regulation aims for all packaging to be recyclable by 2030, part of a broader push to cut emissions and waste. Those rules "will create added confidence for investors like us that the market will eventually mature," Bhargava said. "We can dive in knowing that the market economics don't work today, but if there's no chance for the market economics to ever work, then that's very difficult."
Today, the economics are tough. The EU estimates about 35 kilograms, or 77 pounds, of plastic packaging waste per person each year, much of it from imported fossil fuels. Recycling has struggled thanks to thin investment and petrochemical prices that often make virgin plastic cheaper than recycled material. For now, "there's no solution where you can invest in a technology company and that will produce amazing results," Bhargava said, pointing to a value chain that is "highly fragmented and not very efficient." With deadlines approaching, "the industry needs to get ready now," he added.
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By the end of the year, the holding company behind the Lego Group - Kirkbi - had assets totaling 189 billion kroner ($29 billion). Kirkbi Climate, which manages 10 billion kroner, supports plastics recycling as well as projects tied to the energy transition and land use.
The signal here is clear: patient, long-term capital is moving into the nuts and bolts of how materials get made and reused. If EU packaging rules push the system to scale up and streamline, the business math for recycling could look very different by 2030.
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