Zume secures funds to build North America’s first zero-carbon compostable packaging factory

27 Jul 2021 --- Jefferson Enterprise Energy’s joint venture with Zume, creators of an advanced molded fiber technology for replacing single-use plastic items, has secured US$122 million bond financing from Hilltop Securities to build North America’s first renewable energy-powered compostable packaging factory.

The complex will decarbonize molded fiber production for consumer goods, using zero fossil fuels, and be situated in Texas.

“We know the desire for sustainable packaging exists in Texas because of acts like the Climate Action Plan in Dallas,” Zume’s VP of product research and compliance, Pam Horine, tells PackagingInsights.

“And we know US consumers are putting pressure on companies to be more sustainable, which is why nearly every major global brand has huge sustainability commitments but struggles to find ways to meet the cost and performance of plastic.”

Horine says Zume’s compostable products perform well or sometimes better than plastic and styrofoam at a similar cost. The supplier’s packaging is manufactured to seal in hot food and beverages, keeping them contained securely at high temperatures, including for food delivery services.

Zume’s newest line of plant fiber-based bowls, meal boxes, 3-compartment trays and cups are among the first in its class to provide an anti-leak solution with a corresponding snap-fit lid for preventing spills.Zume’s molded fiber compostable food packaging.

“Options like Zume are why it is estimated that US$10 billion to US$20 billion worth of single-use plastic packaging will convert to molded fiber in the coming years,” adds Horine.

Certified compostable packaging
Zume’s products are tested using ASTM D6868, a standard certifying that 100 percent of the product content is compostable. The certification confirms the product will fully decompose in less than 90 days in an industrial facility.

“Currently, there is no US certification for home composting, so we recommend finding an industrial facility,” explains Horine. “Our packaging is also certified recyclable.”

According to Innova Market Insights, US consumers consider recyclability as the most important environmental sustainability concern for packaging (49%), followed by reusability (45%) and the use of recycled materials (36%).

Twenty percent of US consumers regard compostability as a key environmental credential for consumer packaging.

Plastic bans gather pace
According to Earth Day, a third of the US now has some form of plastic ban in place. Meanwhile, the US Department of Energy recently announced US$14.5 million in funding to combat plastic waste and pollution.

“This is a good start but not enough,” argues Horine. “I expect the US to follow the likes of the EU’s Single-Use Plastics Directive (SUPD) and India’s plan to phase out plastics by 2022.”

However, campaigners reported the Italian government to the European Commission for passing legislation they say violates the EU SUPD. Against EU advice, Italian authorities made exemptions for compostable and biodegradable plastics in national law.

Compostable packaging supplier Tipa welcomed Italy’s interpretation and urged other European countries to follow suit. A new study found Tipa’s compostable packaging provides a longer shelf life to fresh vegetables than traditional plastic packaging.

As the EU SUPD came into force on July 3, PackagingInsights discussed the future of fiber-based single-use packaging with Zume and fellow molded fiber specialist PulPac.Jefferson recommissioned a biomass power plant that will provide energy for Zume’s fiber pulping facility and robotic machinery.

Climate change action
Recognizing the need for climate action, Jefferson Enterprise Energy has recommissioned a 55 MW biomass power plant that will provide energy for Zume’s renewable fiber pulping facility and robotic machinery.

At the heart of the new green energy and manufacturing facility will be a 400 ton per day pulp mill producing high-strength renewable pulp from wood waste and agricultural waste materials. 

The partners say the factory will be the first of its kind in the world and credits its success largely to local and state partner support. Notably, the City of Lufkin and Angelina County, Texas, provided support via tax abatements and community support.

The regional community’s residents are expected to be one of the ultimate beneficiaries of the new complex with hundreds of new, well-paid jobs.

In support of this initiative, Hilltop Securities and Jefferson closed two financing transactions, the first in the amount of US$22 million and the second for US$100 million. The third transaction for an additional $100M is scheduled for 2022 to develop the complex further. 

“The single-use plastic packaging industry is valued at US$320 billion and it is ripe for innovation. Zume has developed superior equipment, product design and technology advantages to drive the conversion to sustainable packaging in the fastest way possible,” concludes Horine.

By Joshua Poole