Why the major brands are shifting to recycled plastics: Christian Schiller, CEO of cirplus

Posted:
9 May, 2022

Christian Schiller is no stranger to the world of startups, having grown German car-sharing platform BlaBlaCar from zero to launch and then to monetisation, all within a short span of four and a half years.

He left the company to go for a year-long sabbatical, fulfilling his lifelong dream of finally getting the chance to travel around the world when his life took an unexpected turn.

While sailing through the beautiful waters from Columbia to Panama, he took a moment to rest and dipped his legs into the water. Suddenly, they were hit by a carpet of algae and plastic waste. To him, it felt dystopian.

“We all must have heard about plastic pollution and how important it is to stem the ballooning problem,” tells Christian, “But hearing about it and seeing it in real life is quite another experience. I resolved within myself there and then that I have to do something about it.”

And that was the first thing he set out to do when he returned to Germany.

“While I wasn’t quite sure where to begin, I knew I wanted to be tackling the plastic crisis right at its roots,” tells Christian, “I was after driving systemic changes that can solve the plastic problem more effectively.”

To do that, he knew he needed the freedom and space to take innovative risks, and entrepreneurship was the best pathway forward. 

Aware that venturing into a new industry is incredibly challenging, Christian set out looking for a complementary co-founder to build a company in the plastic waste space. Together, they can move faster, and learn quickly to increase their odds of success.

The problem, however, was that a new industry meant that Christian had no expertise, no experience, and above all knew no one with the required skillsets for the plastic waste industry to begin with.

“When I first heard about Entrepreneur First’s unique speed dating for founders approach, I was intrigued, excited, and instinctively wanted to give it a go,” recalls Christian, “Getting immediate access to a cohort of talented individuals who want to start companies today helps accelerate my co-founder search.” 

Since that decision to join Entrepreneur First, Christian has quickly risen to the challenge. He’s gone from industry novice to recognised expert in just a few short years; met his ideal co-founder on our platform; and is now, with them, paving the way for a new, sustainable future. This is how they did it.

Entrepreneur First as Christian’s launchpad for his entrepreneurial venture

From Day One at EF, Christian began experimenting with ideas with others in his cohort.

He first partnered with a chemist and they were exploring ideas around finding the right bacteria that can disintegrate plastic in the ocean. However, as they struggled to find a viable pathway to commercialise it, they decided to part ways and pivot to other ideas.

His next idea was conceived by working with a cognitive scientist. They wanted to utilise artificial intelligence to sort plastic waste. But, as the solution was hardware-heavy, they couldn’t see a road to market and aborted the idea.

By then, he also started to observe a recurring theme from the numerous customer conversations he had been having with people from the plastic waste industry. It seemed that the recycled plastic market, in particular, is super fragmented, not transparent, and very old-school.

It was around that time when he started to speak with Volkan Bilici, a Turkish native, with extensive experience in software development and building global market platforms. As plastic pollution is huge in his home country, they were very much aligned almost immediately. They decided to go all-in to engineer a solution to reduce plastic pollution.

The case for recycled plastic

Humans have become accustomed to the convenience of plastic for the past 50 odd years and it’s inconceivable to do without it, even though plastic pollution has reached unsustainable levels. By recycling used plastic, plastic waste will be reduced and less will end up in landfills and oceans. 

Recycled plastic solves the dilemma in the plastic pollution crisis perfectly but challenges abound and adoption is painfully slow.

“Recycling technology today is still stuck in the 1990s and is hardly adequate at all,” explains Christian, “For all the technological advancements we have seen, recycling technology, unfortunately, has taken a backseat all these while.” 

This then leads to a counterintuitive phenomenon in the world of plastic.

“High-quality recycled plastic actually costs more than brand new plastic,” tells Christian,” New plastic production has been around for 70 years. They have robust global supply chains, enjoy economies of scale, and are hence more price-attractive to plastic buyers.”

Beyond just economic incentives, the recycled plastic market is highly informationally inefficient and opaque. Unlike thriving marketplaces, purchasers of recycled plastic can’t be certain of the quality of the recycled plastic they are buying.

Understandably, it’s hard for used plastic adoption to really take off. Even those that did consider buying recycled plastic might find themselves going back to what they know best- virgin plastic, at least they know for certain what they are buying. 

In recent years, legislation is quickly catching up to ramp up the adoption of recycled plastic. In 2019, Germany launched its packaging law enforcing that all packaging on the market has to be more environmentally friendly and use more recycled plastic. Fast forward to today, there are now even bigger regulatory tailwinds including the EU Circular Economy Action Plan, the EU Plastic Tax, and India’s increased push with new plastic waste regulations.

The United Kingdom, for instance, launched a new Plastic Packaging Tax on the 1st of April 2022, forcing every brand that brings packaging to the UK to pay tax if they do not meet the requirement of containing at least 30% recycled plastic. Brands now have an added incentive to use recycled plastic to avoid paying hefty taxes.

“What’s also on the horizon are similar plastic taxes that are likely to come in Italy and Spain soon,” shares Christian, “The European Union has pledged to put out mandatory plastics in the near future. The United Nations recently passed a resolution to tackle the plastic pollution problem with a globally binding treaty within the next two years.”

The tide is shifting fast. With imposed taxes, the Nikes and other big brands of the world will soon find that buying new plastic might not be as lucrative as before. It is becoming increasingly clear that recycled plastic will play a larger and larger role in the years to come. Demand for recycled plastic is poised to grow and the bottleneck to expect lies on the supply side.

“That’s where cirplus, our B2B recycled plastic procurement platform, comes into play,” shares Christian, “By digitising a traditional and rudimentary offline process, we are bringing transparency back to the fore. Businesses can be assured of the quality of recycled plastic. By aggregating demand and supply as a platform for recycled plastic, we can also catalyse for growth to capture this growing market. ” 

“What’s important to add is more than just reducing plastic pollution, relying less on new plastic production also reduces significant carbon emissions. You’re reducing the carbon footprint that comes with every plastic usage. It’s more than just keeping our oceans clean; there is that double sustainability effect.” 

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