Circular Economy

Recently, Chrysalix announced the first investment from our Carbon Neutrality Fund: Deadwood Innovations. The company upcycles low-quality timber, transforming waste into value while significantly minimizing environmental impact. Deadwood Innovations exemplifies our commitment to the circular economy and waste-to-value investment thesis alongside other portfolio companies like Sortera and C2CA Technologies.

The circular economy and materials transition can contribute up to 50% of the EU’s net-zero target (McKinsey, July 2022).

Additionally, the same study highlights an astounding €78 billion in lost material value across the steel, plastics, and aluminum supply chains.

At its core, the circular economy is a production and consumption model that extends the resource lifecycle through sharing, leasing, reusing, repairing, refurbishing, and recycling. While rooted in diverse schools of thought, it continues to evolve, drawing from ideas like:

• Cradle-to-Cradle Design: Products and processes inspired by natural systems (William McDonough and Michael Braungart).

• Biomimicry: Drawing solutions from nature, which has already addressed many challenges we face (Janine Benyus).

• Regenerative Design: Breathing new life into depleted systems and achieving nature-positive results.

• Blue Economy: A practical, open-source approach showcasing sustainable business models (Gunter Pauli).

Based on these pillars the circular economy concept has been refined and developed:

Despite the strong intellectual and scientific foundations, the circular economy faces barriers from the entrenched linear “take-make-waste” model. This legacy system was built in a time of abundant resources and smaller populations. Today, it is buckling under environmental, physical, and financial constraints.

Breaking the Linear Lock-In

The persistence of linear systems is driven by vested interests, lobbying, conservative regulations, and the high cost of entry for innovators. Overcoming this requires systemic changes, capital investment, and bold innovation.

Take the concrete industry as an example—a sector responsible for 4–8% of global greenhouse gas emissions. While traditional supply chains reward volume, weak signals suggest an emerging circular opportunity:

• Increasing costs and dwindling availability of primary raw materials like sand and gravel.

• Rising disposal fees and limited capacity for construction and demolition waste.

• Environmental pressures to reduce emissions and protect natural resources.

• Regulatory shifts, such as landfilling bans and recycled content mandates.

Recycled concrete aggregates (RCA) are often downcycled to low-value applications like road construction, with performance limitations due to adhered mortar. To unlock the potential of concrete recycling, we defined “good looks like” criteria: low cost, high-quality output, modular flexibility, and meaningful sustainability benefits.

C2CA Technology: Circular Innovation in Action

Our portfolio company, C2CA Technology, is at the forefront of this transition, recovering high-purity cement and aggregates from demolition waste for reuse in concrete manufacturing. With a Series A round secured, C2CA is set to build a flagship facility with joint venture partner Dura Vermeer near Rotterdam, Netherlands.

At Chrysalix, we are driven to identify transformative business innovations in circularity. By analyzing resource intensity, market drivers, and startup contributions, we aim to accelerate the shift to a circular economy—turning waste into value and creating a sustainable future.