Closed loop plastic recycling is to become a reality in the UK, following the opening yesterday of a pioneering new recycling plant backed by Coca-Cola Enterprises and ECO Plastics.

The new £15m facility was developed by Continuum Recycling, a new joint venture launched last year by Coca-Cola and recycling specialist ECO Plastic, and was officially opened by recycling minister Lord Taylor of Holbeach.

“With the opening of this facility, the UK is now home to the world’s largest plastics recycling plant, bringing jobs and growth to the rural economy of Lincolnshire,” said Taylor. “Recycling is a growing industry, and investment in these types of projects not only makes good business sense – it will help us achieve our ultimate aim of a zero-waste green economy.”

The Lincolnshire plant is being hailed as a first for the UK as it delivers “closed loop” recycling, taking plastic from old bottles and returning them to the shelves as part of new bottles.

Coca-Cola said the plant would ensure that the company meets its commitment to use 25 per cent recycled plastic in its bottles by the end of the year, while also single-handedly doubling the amount of bottle-grade recycled plastic produced in the UK.

The facility will also play a key role in Coca-Cola’s green marketing around the London Olympics this summer, which includes a pledge to turn plastic bottles discarded at Olympic sites into 80 million new drinks bottles.

Simon Baldry, managing director of Coca-Cola Enterprises, hailed the opening of the new facility as a major milestone for the company’s sustainability efforts. “Our investment in Continuum Recycling shows that we are serious about setting the industry standard for sustainable packaging,” he said. “This is a first for the industry and an important milestone in our ongoing efforts to build a low-carbon, zero waste business here in Great Britain.”

According to Continuum the new plant will save around 33,500 tonnes of CO2 emissions a year, while also creating 30 new jobs.

The news came on the same day as consultancy Grant Thornton released a report highlighting growing investor interest in a waste and recycling sector, which according to government figures is now growing at over five per cent a year.

The report confirms that the recycling market saw a record number of mergers and acquisitions last year, and predicts that the trend is likely to continue as the market consolidates and investors seek to break into the market.

“We continue to see the waste and environmental space performing as a key growth sector as the legislative agenda continues to push development and growth,” said Nigel Mattravers, principal consultant at Grant Thornton.

“The surge in the number of deals was in part driven by an increasing level of acquisitions made by overseas parties (11 deals in 2011) and eight deals done during 2010. This is particularly significant as the deals took place while the sector experienced a marked drop in waste volumes, largely driven by legislation changes as well as the economic slowdown.”

He added that it can remain difficult for firms to attract fresh capital, but predicted that with recycling rates climbing alongside increases in landfill duty demand for recycling services is set to rise even as waste levels fall.

“Our analysis found that landfill operators are under increasing pressure to add value to waste streams in order to generate returns and retain contracts,” he said.