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Closed-Loop Recycling: Definition and Guide for Plastic Packaging

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What is closed-loop recycling, and why is it a fundamental pillar for building a circular, sustainable global economy?

In this article, we explain closed-loop recycling, how it works, and some common examples illustrating the accelerating adoption of closed-loop practices across multiple industries—including plastic packaging.


What Is Closed-Loop Recycling?

Closed-loop recycling refers to a specific type of recycling process that transforms existing manufactured items or materials into new products, effectively “closing the loop” of waste from manufactured goods. Recycled goods may be either processed into raw materials (as with polymers or aluminum) or repurposed in their current form (as with refurbished clothing items or shoes).

In a truly closed-loop process, no new raw materials are needed, and manufacturing can be sustained indefinitely using resources that have already been processed.

Closed-loop recycling is the ultimate goal for achieving a more circular economy because it keeps waste out of landfills and waterways, reduces raw material usage, and can help save energy to cut carbon emissions. To achieve this vision, manufacturers must plan ahead, incorporating materials based on not just their short-term costs, but their full lifecycle recyclability—materials must not lose their key properties during the recycling process.


Recycling: Closed-Loop Versus Open-Loop

Comparing closed-loop recycling to open-loop recycling is helpful for understanding what makes his approach unique.

  • Open-loop recycling refers to the more widespread and easily attainable concept of reusing waste materials where it is convenient and economical. Open-loop manufacturing processes do not necessarily rely on repurposing output materials, and substantial portions of production may be ultimately rejected as waste.

    Open-loop recycled materials are often used in downstream, lower-value applications instead of repurposed in their original manufacturing process. Open-loop recycling is a valuable tool for helping organizations cut down on waste, but it will not lead to the end goal of true circularity. A common example of open-loop recycling is paper products.

  • By contrast, closed-loop recycling preemptively plans to recycle production materials, and the economics of recycled materials are incorporated into product design and supply chain planning from the outset. The production process itself is designed based on recyclability, and most materials are reused in the same type of product as their original use case, limiting the need for subsequent reprocessing.

Open-loop recycling provides a practical outlet for repurposing waste streams where possible, but closed-loop recycling is the only proven path to systematically reducing overall material consumption and waste for manufacturers


Closed-Loop Recycling Examples

Progress in establishing closed-loop supply chains varies substantially based on material and industry. While technical barriers to effective closed-loop recycling programs remain in some industries, others have proven that a closed-loop approach can deliver impactful results at a large scale:

Plastics are another important area where manufacturers are increasingly offering economical options for recycled materials. While a relatively small percentage of the plastics produced today are recycled, plastic producers are making rapid strides. According to the Association of Plastic Recyclers:

  • Nearly 5 billion pounds of plastic was recycled in North America in 2021.
  • Plastic recycling alone supports over 200,000 jobs in the U.S.
  • Replacing new plastic with recycled material can reduce greenhouse gas emissions by 70%

Growing Options for Recycling Closed-Loop Plastic Packaging

Plastic packaging provides an excellent illustration of the newly flexible options for improving sustainability for food products and other packaged goods. Post-consumer regrind (PCR) plastic can reduce energy consumption for packaging by at least 79%.

Crucially, PCR offers manufacturers flexible options for incorporating the optimal mix of recycled materials for working toward a truly closed-loop while maintaining required material characteristics, aesthetics, and cost—this is because plastic products may be manufactured either entirely or partially from PCR material. Even a 10 or 20% PCR mix can help mitigate waste, and the proper grades of PCR plastic provide equivalent strength and protection compared to unrecycled virgin plastics. 

Need help understanding the full lifecycle impact of your plastic products? Learn how a lifecycle assessment can help quantify product impact and meet your sustainability goals.

Our team at Lacerta continues to work hard to offer sustainable options for plastic food packaging. Our use of PCR materials has already saved 324 million bottles from landfills, keeping over 5,000 tons of greenhouse gases out of the atmosphere—the equivalent of taking 1300+ cars off the road.

We are now committed to making all of our products available with up to 100% recycled materials by 2025, effectively allowing our customers to choose a closed-loop material for their food packaging needs. 

To learn more about closed-loop technology, Lacerta’s sustainability sourcing strategy, and our innovative approach to reducing plastic waste, we invite you to visit our sustainability page.

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