A recycling startup backed by Lululemon Athletica Inc. is expanding its operations in Australia, aiming to address rising demand for recycled fibers across fashion, packaging, and automotive sectors — particularly those made from hard-to-recycle materials like nylon and polyester.

Samsara Eco Pty. has opened its first commercial-scale facility: a A$30 million ($20 million) plant located in Jerrabomberra, near Canberra. The site is expected to process 1.5 million tons of plastic annually by 2030. Its recycled materials will be used by clients, including Lululemon, as well as in trial phases with brands from multiple industries.

The company’s proprietary technology uses artificial intelligence to engineer enzymes not found in nature, which can break down synthetic materials traditionally considered unrecyclable. The new plant will also include research labs and development spaces designed to expand the range of plastics it can process.

“Being able to develop an enzyme that could address an unrecyclable plastic became very important to us,” said Samsara Chief Executive Officer Paul Riley. “We’re continuing to look at some of those harder-to-recycle plastics.”

The urgency to scale recycling technologies has intensified after international talks in August failed to produce a global treaty limiting plastic pollution. According to Bloomberg Intelligence analyst Gail Glazerman, growing regulatory pressure and shifting consumer preferences are driving momentum in the fiber recovery market. For instance, in the Netherlands, 25% of textile fibers used in new products must now come from recycled sources.

Globally, an estimated 60% of clothing materials are plastic-based, including polyester, acrylic, and nylon, according to the United Nations Environment Program. Yet, only 9% of plastics are recycled, according to data from the Organisation for Economic Co-operation and Development.

Unlike mechanical recycling, Samsara Eco’s process — which originated as a research project at the Australian National University — doesn’t require sorting or melting plastics. Instead, it uses enzymes to chemically separate and decompose different types of plastic, along with the dyes used to color them, Riley explained.

Lululemon signed a 10-year agreement with Samsara in June to access recycled nylon and polyester, and has already used the materials in a jacket.

“Lululemon has identified material innovation as a business opportunity, believing it can boost sales from sustainability-conscious consumers,” Glazerman noted in a research briefing. “Fundamentally, the product has to match expectations. Being cleaner and better is good, but it actually has to perform — and that’s a challenge some brands are facing.”

Samsara Eco has raised more than $100 million in funding to date. Investors include Temasek Holdings Pte., Main Sequence Ventures, and Woolworths Group Ltd. The company is preparing for another funding round within the next 12 months, according to Riley.