Lamor Recycling

Finding a solution to the plastics challenge is crucial for tackling climate change and transitioning towards a circular economy. The plastics industry and more specifically plastics manufacturing accounts for more than three per cent of global emissions, and the volume of plastic waste has doubled worldwide in the last twenty years. Only one tenth of all plastic waste is currently recycled accordingly.

Lamor Recycling Oy’s plan is to build a 10,000-tonne plastics recycling facility in Kilpilahti, Porvoo. The new plant will make it possible to reuse plastics that are incompatible with mechanical recycling processes and therefore difficult to recycle, instead of having to dispose of them by incineration as waste. The plant will produce pyrolysis oil, which can be used as a substitute for crude oil in the production of, for example, plastics and other chemicals, thereby reducing the consumption of virgin feedstocks.

The Climate Fund’s investment decisions are guided by a set of criteria emphasising impact, against which every case applying for funding from the company is evaluated. Preconditions for funding include a credible plan for repayment of the investment, alignment with the six environmental objectives of the EU’s sustainable investment network, i.e. the “do no significant harm” principle, and that with Climate Fund’s investment the project will be realised earlier, on a larger scale or in the first place. When the preconditions are met, the final selection will be made based on impact criteria, such as emissions reduction potential.

The process has an emissions reduction potential of between approximately 1.8 and 2.4 tonnes of CO₂ equivalent per one tonne of plastics feedstock. The annual emissions reduction rate at the Kilpilahti plant’s design capacity is currently estimated at 19,000 tonnes of CO₂-eq on average and the plant’s cumulative ten-year emissions reduction potential is estimated at approximately 0.2 million tonnes of CO₂-eq. Most of the reductions will contribute for the Effort Sharing sector. The Kilpilahti facility serves as a reference for Lamor, whose broader goal is to create a project portfolio of 100,000 tons by the end of 2025. This would also increase the total emissions reduction potential considerably.

Chemical recycling is considered consistent with the EU taxonomy for sustainable investment activities if mechanical recycling is not a technologically and economically feasible option. The waste fed into Lamor Recycling’s process cannot be recycled mechanically.

Climate Fund’s EUR 6 million capital loan is allocated to building the company’s first chemical recycling plant for plastics. The loan is priced at market terms and includes an interest rate premium.