A.P. Moller Holding, Novo Holdings invest in tyre recycling

Denmark-based A.P. Moller Holding, the investment arm of the A.P. Moller Group, has together with Novo Holdings invested €75 million in Circtec, a UK-headquartered technology company specialising in tyre recycling.

The investment is part of a broader fundraising initiative that collected a total of €150 million, with €22.5 million of grants awarded by the Government of the Netherlands.

This substantial funding enables Circtec to launch the construction of what has been described as ‘Europe’s largest end-of-life tyre pyrolysis recycling facility’ in Delfzijl, the Netherlands.

The construction of the new facility was officially announced on May 17 at a ceremony attended by offtake parties BP and Birla Carbon, who will use the output products from the new facility. The first phase of the plant is intended to become operational in 2025.

At full capacity, the Delfzijl plant is expected to tackle approximately 5% of the 3.6 million tons of end-of-life tyres that are generated in Europe annually.

Discarded tyres pose serious environmental and health risks, accumulating in landfills and polluting ecosystems. Over half of Europe’s tyre waste is incinerated or exported for harmful disposal, highlighting the need for innovative solutions. With the rise of electric vehicles, tyre waste will increase as these tyres wear down faster.

“We believe Circtec satisfies both our purpose and return requirements, and we are excited to be investing in the business and partnering with the management team to build a world-class pyrolysis platform,” Chetan Metha, Head of Growth Equity, A.P. Moller Holding said.

“We are very pleased to welcome Novo Holdings and A.P. Moller Holding to our board to continue our growth journey together. The success of this new investment round gives us the partners that will enable us to take Circtec to the next level in realising our goal of scaling sustainability,” Allen Timpany, Co-Founder and CEO of Circtec, said.

“Bringing our technology to a global scale will generate meaningful contributions to the sustainability of the planet.”

The technology

Circtec has developed proprietary pyrolysis technology to decompose end-of-life tyres. Specifically, the company uses pyrolysis to produce its renewable drop-in marine fuel Hevea Upgraded Pyrolysis Advanced (HUPATM), as well as circular naphtha for responsibly sourced plastics, polymers and chemicals, and high-quality recovered carbon black for use back into tyres, rubber and plastics manufacturing.

According to Cirtec, HUPA is 50% biogenic and its biogenic portion is certified as having a GHG reduction impact of 87% compared to fossil marine fuel. The product is ISCC-certified for its Greenhouse Gas reduction effect and can be used by shipping operators, blended with fossil marine fuels, to meet the requirements under the EU’s FuelEU Maritime Regulation and Renewable Energy Directive.

In February 2024, Circtec announced long-term offtake agreements with BP for its sustainable marine fuel and circular naphtha products. This followed an agreement with Birla Carbon, one of the largest global producers of carbon black, for the recovered carbon black in 2021. This means the entire output of the new plant being constructed at Delfzijl is fully sold.

In support of this offtake agreement BP is providing Circtec a €12.5 million debt finance facility to contribute to the capex of Circtec’s new commercial-scale plant expansion in the Netherlands.

The Delfzijl plant is Circtec’s first commercial-scale plant investment following a 15-year technology and product development process. Circtec is planning the development of several plant projects globally over the next few years, starting with North America and Southeast Asia, as direct owner/operator plants and as joint-venture licensing partnerships.

The plant could help container terminal operators address the sustainability challenge of recycling end-of-life tyres. Despite efforts to implement sustainable practices, terminal operators face difficulties in disposing of large OTR tyres from cargo handling equipment due to a lack of proper infrastructure. Dedicated pyrolysis plants, like the one Circtec is constructing, are needed to support the circular economy.