GREENPETClosed cycle collection and recycling system based

on thermoelectric compression of PET bottles

„Waste is a valuable raw material”

Project for the Think Beyond Plastic competition

Official Contact: Lajos Simon, CEO, lajossimon@budafilter.hu Contact: Peter Kenedi, co-owner, kenedip@t-online.hu +36 (30) 948-2343

http://english.tepet.net/ Mezőfalva, Hungary

The Problem to be Solved

The emission of PET bottles continues to grow, which is a serious ecological risk as the efficient collection and recycling of the plastic bottles are still unsolved. The garbage islands on the oceans and in the forests and fields are mainly made of PET bottles, causing irreparable environmental pollution.

In case of the current collection systems, the PET bottles are contaminated and their transportation is expensive, thus the recycling ratio is far below the desired and possible level. However, the clean PET bottle that is not mixed with other kinds of waste is a valuable raw material (or it could be).

The Solution is: GREENPET (1)A recycling system that is based on the compressing and isolated

collection of PET bottlesThe PET bottles shall not be mixed with garbage. It can be ensured, on one hand, by the thermo-electric PET bottle compressing device that shrinks the empty PET bottle to 1/12th of its original size, thus making the waste management convenient for the households. On the other hand, to increase the attractiveness of the selective collection, a return fee shall be paid for the compressed bottles, or a deposit system shall be introduced.The compressed bottles are then delivered to a recycling plant by inverse logistics (the addressee pays the delivery fee), where after color sorting, grinding and washing, the highest value-added products are made from them. This method reduces the CO 2 emission to half compared to the conventional selective collection (considering the fact that the compression uses some electrical energy), and the delivery cost is much lower.The recycled products are priced very good, and the system itself can utilize a significant portion of it: new PET bottles can be produced (thanks to the closed cycle collection), and other good quality products can be manufactured, including the plastic housing of the household compressing device.

The Solution is: GREENPET (2)

Beyond the household devices, automated machines can be operated in public places (shops, post offices, schools, etc.) They can either collect the compressed bottles, and provide the customer with a receipt against which the return fee (or deposit) can be paid, or can make the compression itself of the bottles got empty off home.

If a deposit system is in place, the automated machines recognize the bottles by their shape, of by an RFID stamp embedded around the neck of the bottle.

With this system virtually all emitted PET bottles can be collected and returned to recycle, with an efficient and cost saving method and without damaging the environment.

How does GREENPET make money?

The sister company of Budafilter'94 Ltd. – which is dealing with the GREENPET underpinning research since 2002 – will manufacture and distribute the new generation of the household compressing devices and the automated machines. This, or another new sister company collects the compressed PET bottles, arranges the transportation (e.g. by inverse logistics of the Post office), pays the return fees (or deposit) to the customers, and sells the compressed bottles to the parent company for recycling.

The compressing devices are to be sold to households. The automated machines will not be commercially available, but instead a GREENPET-based franchise system will be placed on community spaces.

How does GREENPET Work?

Compressing in households

Budafilter’94 Ltd.

Process the color selected

compressed PET bottles and sells

the recycled products

worldwide(Postal) inverse logistics

Off home collecting places:

– supermarkets – municipalities

– schools– post offices

– other community places

Collecting points:

- Take over the bottles-Sell the household devices-Operate the automated machines

Return fee, or

Deposit

The marketing and sales strategy of GREENPET

Beyond the usual commercial channels, the household appliances can be sold through post offices, municipalities and schools. It is also possible to provide the devices against a deposit to households that agree to return 1,000 compressed bottles per year through 3 years to GREENPET.

This Hungarian model – if successful – can be implemented in the US. The „American business" consists of three distinct parts:

GREENPET (or a new local sister company) would do the sales of the household devices. The manufacturing would remain in Hungary, but if the sales volume justifies, establishment of a new local factory is possible, too. The automated machines would also be manufactured by Budafilter’94 Ltd., but licensing to an American manufacturer is an option, too.

A local logistics company (or even the Post Office) would conduct the entire collection, including the operation of the automated machines.

One or more local plastic manufacturers would buy the compressed bottles as raw material. It can produce similar products and uses the know-how of Budafilter'94 Ltd (housing of the device, special filters, strapping tape, etc.) against a license fee, or can manufacture anything else, including new PET bottles.

The competitors of GREENPET

Competitor is all communal waste management system, company and technology, but they all lack the 2 key points:

The compression technology (the patent of Budafilter’94 Ltd.), that ensures double compression ratio compared to any other known method. It means much lower transportation cost (i.e. others carry at least twice as much air along with the „payload”), easier handling and storage. Also, the compression by electrical heat is permanent (keeps the compressed shape), while others, like the „cold” mechanical compression, are not.

The closed cycle collection ensures high purity raw material (PET), which is the basis of good quality recycled products. It can not only used by the food industry (unlike others where PET bottles are mixed with plastics of non-food origin or even garbage), but avoid the „pollution” of PVC, which, if present in more than a few percentages, dramatically decreases the quality.

The GREENPET team

Budafilter’94 Ltd is going to reshape one of its sister companies for the Think Beyond Plastic competition. The managing director and majority owner of Budafilter’94 is Lajos Simon, who is the owner of the related patents.

The investors include an IT specialist, a waste management company and a public venture capital firm.

The strategic advisor is a professor in the Budapest Corvinus University.

Financials of GREENPETGREENPET revenue (in thUSD) 2012 2016 2019

Collection (ThermoPress Hungary Ltd.) collected compressed bottles (tons) 150 1 300 2 500 revenue from sales of compressed bottles 45 390 750 number of household devices in use (pcs) 20 000 200 000 400 000 revenue from sales of household devices 800 8 000 16 000 number of automated machines in use (pcs) 0 400 700 break-even volume of collection (tons) 500Recycle (Budafilter'94 Ltd.) sales of recycled products (tons) 140 1 200 2 400 revenue from sales of recycled products 280 3 600 7 200Investment (between the actual and the previous period) collection 1 000 500 recycling 2 800 700 1 000Investments Total 2 800 1 700 1 500 owners / from profit 700 100 1 000 private investors 1 300 0 0 state subsidy 500 200 0 public venture capital 300 400 0 bank loan 0 1 000 500

Sustainability of GREENPET

The system itself guarantees the ecological stability. It turns a polluting activitiy into a profitable, self-sustaining, socially beneficial one, and creates a 'quasi' ecosystem while remains comfortable for the customers.

 The current status of GREENPET The sister company of Budafilter’94 was able to collect 100-150 tons of compressed

PET bottles per year so far, with using previous generation, less efficient household devices and without automated machines in public places.

The recent commissioning of its new 1200 tons capacity recycling plant proved that the conventionally collected, baled PET material can only be re-used at very low efficiency. This induced a strong focus of the GREENPET concept.

The company therefore started to develop a new, improved and less expensive household device and the automated machines for public places, and is introducing collecting partnerships with supermarkets, post offices, schools and municipalities in order to provide sufficient raw material feed for its processing plant.

Though the development of the new products is not yet 100% ready, the „Hungarian model” is working and does not require further investment.

If we win the First Prize, we’d use it implement the system in the US, starting with the sales of the household devices, and continue with the other related elements (logistics, partnerships for the collection, etc.).