By Selin Gökkut & Priya Saikumar
This article builds on Banking on Circularity, a white paper co-authored by Academics for Circular Economy (ACE) for Garanti BBVA, and on ACE's review of publicly documented cases of circular economy financing across five categories of financier.
Earlier this autumn, Academics for Circular Economy (ACE) contributed several chapters to Banking on Circularity: Zero Waste, the Circular Economy and Climate Finance, a white paper prepared for Garanti BBVA by the Oxford Centre for Technology and Development. Our task was to understand how banks actually finance circular businesses, and to that end we examined thirty cases from thirty banks, five on each inhabited continent, ranging from Intesa Sanpaolo's dedicated credit line in Italy to the funds that BNDES provides for waste-picker cooperatives in Brazil.
The clearest finding was also the simplest, namely that there is no such thing as a single circular loan. The thirty cases relied on at least eight families of financial instrument, none of which accounted for more than six cases, and in each case the instrument followed the particular financing problem that the borrower's circular model had created rather than any label attached to it.
Banks are, however, only one source of capital, and the white paper deliberately confined itself to them. For this article we have therefore widened the lens, drawing on publicly documented cases of circular economy financing across five categories, namely commercial and development banks, private equity and infrastructure investors, development finance institutions and other public lenders, corporate and strategic investors, and the policy and catalytic mechanisms through which governments shape the market in which all of the others operate.
Why Antalya is the right moment
It seems fitting that this conversation should reach COP31, which opens in Antalya on 9 November, given that the white paper was written for a Turkish bank in the very year that Türkiye hosts the climate negotiations. The more substantive reason, however, is that finance has become the point at which climate ambition is tested against reality. At COP29 in Baku, governments agreed that developed countries should take the lead in mobilising at least US$300 billion a year for developing countries by 2035, within a wider call to raise climate finance from all sources to US$1.3 trillion a year [1]. The Baku to Belém Roadmap, which sets out how that larger sum might be reached, is due to present its first implementation update in Antalya [2], and negotiators will also be pressed on how COP30's call to triple adaptation finance by 2035 is to be honoured [3].
The circular economy has rarely featured in these discussions, which is curious given how closely it is bound up with them. The extraction and processing of materials accounts for more than half of global greenhouse gas emissions [4], so keeping products and materials in use for longer is as much a matter of climate policy as it is of waste management. The energy transition itself depends on copper, lithium, nickel and cobalt, and the IEA finds that recycled critical minerals carry, on average, around 80% lower emissions than those that are newly mined and refined [5]. As our previous article argued, what becomes of these minerals once they have served their first purpose is also a question of who keeps the value.
There is a further reason why the timing matters. Much of the US$1.3 trillion is expected to come from private and blended sources, and circular projects illustrate in miniature why such capital is hard to attract, since they tend to involve long payback periods, uncertain markets for recovered materials and a great many small actors. They also show rather clearly which public instruments genuinely draw private money in, and which merely appear to do so.
Circular is not one thing
A circular economy seeks to keep products, components and materials in use at their highest value for as long as possible, which in practice covers a ladder of strategies running from sharing and maintenance, through repair, reuse, refurbishment and remanufacturing, down to recycling and, at the very bottom, the recovery of energy. Each rung retains a different amount of value, and each alters the cash flow of a business in its own way.
Where a company keeps ownership of its products and leases them, or sells their use as a service, it must buy the asset at the outset and recover the cost slowly over many years, which is why leasing and infrastructure equity tend to suit it. IFCO, which operates a pool of more than 290 million reusable crates handling over 1.6 billion shipments a year, is a case in point [6]. A refurbisher, by contrast, has to buy, store and repair used goods before it can resell them at prices that are never entirely certain, and the European Investment Bank's €17 million loan to Swappie, a Finnish refurbisher of smartphones, was intended to strengthen precisely those refurbishment capabilities [7].
Recyclers face a different problem again, since they must pay for their feedstock before they can sell what they produce, and their margins rise and fall with the price of virgin material. A firm buyer can make all the difference in such cases, as Inditex demonstrated when it committed more than €100 million over three years to buy recycled textile fibre from Infinited Fiber [8]. Large recovery plants, meanwhile, need long-term debt and secure contracts for both their waste supply and their output, which is why the Ecotriagem sorting facility in Brazil was financed with blended loans running for up to eleven years [9]. The collection systems on which all of this depends are often run by cooperatives and informal workers with very little on their balance sheets, and they are generally reached through grants and programmes rather than loans, as with the BNDES fund for waste-picker cooperatives, which the bank finances in equal shares with its partners [10].
At present, most of the money flows to the lower rungs. Of the thirty bank cases in the white paper, fourteen financed recycling or material recovery whereas only three financed keeping products in use, and our review of public finance found service and leasing models similarly scarce. This matters, because it is the higher rungs that retain the most value and avoid the most extraction.
Five sources of circular finance
Circular finance is often described as a niche, yet the cases suggest something rather different, namely that a wide range of financiers are already active, each addressing a different part of the problem. A single Australian packaging company, Pact Group, illustrates the point well. Its lenders, Westpac, HSBC and Commonwealth Bank, converted A$420 million of loans into sustainability-linked facilities whose margins depend partly on recycled content [11]. In 2023 the infrastructure investor Morrison paid about A$160 million in cash for half of Pact's reusable crate business, Viscount, which was valued at around A$380 million [12]. The government's Clean Energy Finance Corporation and Commonwealth Bank each lent A$16.5 million to a bottle-to-bottle recycling plant that Pact runs jointly with a waste company and beverage makers [13], while Woolworths agreed to buy recycled packaging from Pact and to increase its use of Pact's reusable crates from about 50 million to 80 million a year [14]. Four circular activities within one business thus drew on four quite different kinds of money.
Banks use at least eight families of instrument, and in the white paper's sample none of them accounted for more than six of the thirty cases. ABN AMRO has observed that in product-as-a-service models “expenditure precedes profit”, a pattern that standard credit models handle poorly [15], while J.P. Morgan runs a supply chain finance programme that pays Bridgestone's suppliers early and offers better rates to those with strong sustainability ratings [16]. Intesa Sanpaolo set aside €8 billion for green and circular lending over the period from 2022 to 2025, some of it supported by guarantees from SACE, Italy's export credit agency [17]. Banks nonetheless provide very little equity, and not one of the thirty cases disclosed the residual values on which such lending ultimately depends.
Private equity and infrastructure funds occupy the gap between venture capital and conventional bank debt. Brookfield committed up to US$700 million to Circular Services, an American recycling platform that began with twelve facilities [18], whilst funds pursuing a buy-and-build strategy have merged smaller recyclers in Brazil, Central Europe and South Korea in search of scale. Summa Equity went so far as to create a €550 million continuation fund so that it could go on growing its Nordic recycling group beyond the life of the original fund [19].
Development finance institutions and other public lenders take on the risks that others will not. The European Investment Bank invested €5.1 billion in 153 circular projects between 2020 and 2024 [20], and its fund arm, the EIF, has committed €30 million to a debt fund for circular firms building their first commercial plants, a stage that the EIF describes as “too innovative for banks and too capital intense for venture capital” [21]. What such institutions can offer, and others generally cannot, is long tenor, capital willing to absorb the first losses, and help in preparing projects that are not yet ready for investment.
Corporate investors contribute more than money, since they are also able to supply demand, feedstock and technical knowledge. Dow, for instance, agreed to buy an estimated 65,000 tonnes a year of oil made from plastic waste at a planned Freepoint plant in Arizona, becoming the sole buyer of its first phase [22], and a credible buyer of this kind can make a plant financeable even where no loan is involved. Braskem, for its part, pays for training, equipment and repairs at recycling cooperatives in Brazil through its Ser+ programme, because the recycled plastic it sells depends on their collection [23].
Public policy, finally, shapes the economics to which every other financier responds. The deposit return scheme in New South Wales has taken back 15 billion containers and paid out A$1.5 billion in refunds [24]. Public purchasing amounts to around 12.7% of GDP across OECD countries, which is more than enough to create markets for repaired and recycled goods [25], and in the United Kingdom, where the Plastic Packaging Tax raised £250 million in 2025 to 2026, the share of packaging falling below the 30% recycled content threshold has declined from 41% in 2022 to 2023 to 37% [26]. Financiers decide who invests, but it is often policy that decides whether there is anything worth investing in at all.
Matching the money to the model
The useful question, then, is not which product a financier might sell to a circular business, but what is preventing that business from being financed in the first place. A new technology will generally need grants or equity, whereas a proven plant with a working life of fifteen years needs long-term debt, a recycler without a secure buyer needs an offtake contract, and a network of small collectors needs programmes and the revenue that producer responsibility schemes can provide. The strongest systems layer these instruments over time, so that public money can withdraw as private lenders grow more comfortable. As our review of policy instruments put it, public capital is at its most valuable when it is temporary, whereas the revenue and demand that policy creates can endure.
Circular does not mean bankable
The cases include failures, and they are instructive. Rino Recycling built a plant in Brisbane to turn construction waste into aggregates and sand, with A$75 million of finance from the Clean Energy Finance Corporation [27]. The lender placed the business into receivership in August 2025, and its land and plant were later sold to another recycler [28]. Ascend Elements, which raised US$162 million in 2024 to make battery materials from recycled inputs [29], filed for bankruptcy in April 2026 after the federal government cancelled a grant on which it had been relying [30].
Neither failure suggests that recycling is a poor idea. What they do show is that tonnes recovered are a measure of impact rather than a source of revenue, and that a plant still needs buyers for its output, stable policy and costs that it can actually cover.
The evidence also reveals a gap in reporting, since financiers routinely publish tonnes and capacity but seldom disclose payback periods, residual values or their exposure to the prices of secondary materials. Headline figures for the private finance that public money has supposedly mobilised also need to be handled with care. The Global Environment Facility reports US$6.6 billion of co-financing alongside roughly US$1 billion of its own spending on plastics [31], yet that co-financing includes public money as well as finance that might well have flowed in any case, and so it cannot simply be counted as private capital drawn in.
What to watch in Antalya
The circular economy will not have a negotiating track of its own at COP31, and whether it advances will depend instead on the decisions that are taken about finance. Five questions should show whether the money is beginning to follow the loop.
Counting. Will the first update on the roadmap count investment in material efficiency, reuse and recycling, and will it report the private capital actually mobilised rather than total co-financing?
Definitions. Will the categories used to track climate finance distinguish reuse, repair and remanufacturing from waste treatment and energy recovery, rather than placing everything connected with waste in a single category?
Patient capital. Will development banks commit the long tenor and loss-absorbing capital that first-of-a-kind circular plants in the Global South require?
Demand. Will new national climate plans include the policies that make circular businesses financeable, among them producer responsibility, deposit return schemes, rules on recycled content and public procurement?
Reach. Will finance reach the collectors, cooperatives and repairers who hold circular value chains together, and not merely the large plants at the end of them?
The white paper set out to ask how banks might finance a circular economy, and its answer, which the wider evidence only reinforces, is that no single lender or instrument will suffice. Antalya offers a timely opportunity to make that case, and to ask that the finance agreed there be shaped accordingly.
About this series
Road to COP is a series of articles from Academics for Circular Economy (ACE) leading up to COP31.
This article draws on the chapters ACE co-authored for Banking on Circularity: Zero Waste, the Circular Economy and Climate Finance, prepared for Garanti BBVA by the Oxford Centre for Technology and Development, and on ACE's reviews of publicly documented circular economy financing cases in five categories, namely banks, private equity and infrastructure investors, public finance and development finance institutions, corporate and strategic investors, and policy-enabled and catalytic mechanisms. The reviews were compiled in October 2026.
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