Key Takeaways
- Carbios has developed proprietary enzymatic recycling technology for PET and biodegradation for PLA.
- First-of-its-kind industrial demonstration plant operational since 2021; commercial plant construction expected to start in 2023.
- Strategic partnerships with major industry players including L'Oréal, Nestlé Waters, PepsiCo, and Suntory.
- Solving critical environmental problem with circular economy solution for plastics recycling.
- Strong IP position with 39 patent families covering enzymatic technologies.
Business Overview
Carbios, founded in 2011, is a leader in developing biological solutions to recycle plastics and textiles. The company's innovative enzyme-based recycling technology breaks down PET plastic and PLA, making it possible to produce high-quality recycled PET (r-PET) and fully biodegradable PLA.
With a strong team of 130 employees—two-thirds in R&D—Carbios holds an impressive intellectual property portfolio of 375 patents across 52 families. Its demonstration plant in Clermont-Ferrand recycles 2 tons of waste, and the upcoming Longlaville plant will increase capacity to 50,000 tons annually.
The company's growth strategy revolves around three key pillars:
Licensing
Granting licenses for its technology and intellectual property to partners.
Enzyme Sales
Selling proprietary enzymes to manufacturers directly or via joint ventures.
Royalties
Earning royalties from partners' sales of recycled PET (r-PET) products.
Technology & Innovation
Carbios has developed functional enzymes able to depolymerize PET and PLA. Monomers of each component are high-quality virgin monomers meaning they can be reused as polymers (R-PET) or remain biodegradable. For PET, the process includes: collection/pre-treatment, depolymerization, filtration, separation of MEG and TA monomers, and final purification. The process is functional at the industrial-demonstration level, with commercial-scale implementation upcoming.
With Carbios ACTIVE, the encapsulated enzyme is added during PLA fabrication with no change to the production line. The additive doesn't affect mechanical properties and is FDA-approved for food contact (EU approval pending). Under composting conditions (temperature, humidity, pH...), the enzyme is activated and the PLA plastic biodegrades completely. This works for both industrial and home compost settings.
Pipeline & Product Roadmap
Carbios' innovation pipeline focuses on enzymatic recycling solutions for plastics and biodegradable polymers. The company is progressing towards full-scale commercialization while expanding its research into new applications.
Today
Industrial demonstration of PET depolymerization and production of high-quality r-PET, showcasing Carbios' readiness for large-scale deployment.
Short Term
Expansion of Carbios ACTIVE for PLA biodegradation, enabling food-safe, fully biodegradable solutions, with active U.S. market rollout and anticipated EU regulatory approvals.
Mid Term
Advanced research into enzymes for other polymer types, such as polyamides and polyolefins, targeting broader sustainability goals and market diversification.
Partnerships & Commercialization
Carbios' ownership structure reflects a blend of strategic partnerships and strong insider participation, ensuring aligned interests with shareholders.
Strategic investors such as L'Oréal (via BOLD), L'Occitane, and Michelin Ventures play a critical role in supporting Carbios' long-term vision.
Major Institutional Investors
- BOLD (L'Oréal)
- L'Occitane
- Michelin Ventures
- Swedbank Robur
- Fidelity
Despite recent executive changes and project delays, analysts maintain a positive long-term outlook for Carbios, with many reiterating a "Moderate Buy" rating based on potential upside.
Market Analysis
Carbios' enzymatic process differentiates it from traditional chemical recycling competitors, its market adoption will require scaling operations efficiently and mitigating potential cost barriers. Partnerships with industrial leaders such as Indorama Ventures and consumer brands like L'Oréal have fortified its market presence. However, the emergence of competing technologies from companies like Samsara Eco and Loop Industries necessitates continued innovation to maintain technological leadership.
Financial Analysis
H1 2024 Highlights
Market Cap
€117.08M
Reflects investor anticipation for enzymatic recycling
TTM Revenue
~€83.3K
As of June 30, 2024
Cash & Equivalents
~€144M
Includes term deposits (June 30, 2024)
Total Funding to Date
€314M
Raised since inception
Despite limited current revenues (~€83.3K TTM), Carbios has built a substantial financial runway of ~€144M in cash and deposits as of mid-2024. This capital—bolstered by a €141M capital raise in 2023 and additional public funding—supports ongoing R&D and the construction of the Longlaville industrial facility. While the path to significant revenue hinges on commercializing enzymatic recycling at scale, the company's collaborations, licensing opportunities, and strong IP portfolio position it well for long-term growth in the global push for circular economy solutions.
Intellectual Property
Carbios has a strong IP position with 39 patent families covering enzymatic technologies.
SWOT Analysis
Strengths
- Unique enzymatic recycling technology for PET and PLA.
- Significant IP portfolio (375 patent applications).
- Strong R&D foundation.
- High-profile collaborations.
Weaknesses
- Limited revenue streams pre-commercialization.
- Capital-intensive projects.
- Dependent on external funding.
- Still establishing brand awareness.
Opportunities
- Global demand for circular economy solutions.
- Expansion potential into other polymer classes.
- Regulatory drivers creating tailwinds.
- Possible new partnerships and licensing agreements.
Threats
- Competition from other recycling methods.
- Macroeconomic uncertainties.
- Unforeseen regulatory or environmental hurdles.
- Operational risks in scaling up production.
Competitive Landscape
Compared to chemical recycling methods, Carbios' enzymatic approach is more energy-efficient and environmentally friendly, offering a competitive edge in markets increasingly shaped by stringent environmental regulations. In comparison to peers like Loop Industries and Quantafuel, Carbios' technology benefits from a cleaner, lower-energy process and a robust set of industrial collaborations. Additionally, its focus on biodegradation technologies for PLA positions the company as a key player in the global shift toward sustainable packaging solutions.
Investment Thesis
Carbios offers a compelling investment opportunity for stakeholders focused on industrial biotech and ESG-aligned growth. Its transition from R&D to commercialization, underscored by key milestones such as the upcoming Longlaville commercial plant, marks a significant inflection point. The anticipated surge in licensing revenue and royalties further supports long-term growth projections. While risks related to market adoption, regulatory approvals, and executive leadership changes remain, the company's strong IP portfolio and strategic partnerships provide a solid foundation for scaling and market penetration.
Conclusion
Carbios is well-positioned to capitalize on the increasing demand for sustainable recycling technologies. The successful operationalization of its Longlaville plant and the expansion of its licensing agreements could significantly enhance its financial profile and global market share. For investors seeking exposure to innovative, sustainability-driven solutions, Carbios represents a strategically sound addition to a diversified portfolio.