Why Environmental Managers, Investors Love Circular Economy Technologies

by | Aug 25, 2016

This article is included in these additional categories:

Lux Research circular economy reportCircular economy technologies and initiatives have seen growing interest from environmental managers and sustainability officers of late. A new report suggests these innovations, which reduce waste or convert waste to valuable new products, can also add investors to their list of fans.

Circular economy technologies received $668 million in funding from 2011 through the first quarter of 2016, Lux Research says. Of this total funding, material recycling captured a 69 percent share and accounted for 65 percent of the total 155 deals.

“Waste collection and sorting are experiencing disruptive changes due to the innovations based on software, data analytics, and robotics,” said Jerrold Wang, Lux Research analyst and lead author of the report titled, Observing Trends from VC Investment Activities to Material Recycling Fields.

Wang told Environmental Leader that Zerocycle, which developed a citizen-engagement platform to increase recycling and reduce waste through big data and behavioral science, is an example on the software and data analytics side.

In the area of robotics, CleanRobotics has developed a product called Trashbot. Humans throw everything into one bin; Trashbot automatically separates and sorts waste and recyclables while collecting waste data. “The trash bin identifies shape, color, weight and other properties of bottles, and calculates density so that an algorithm can estimate the material type,” Wang said.

Similarly, ZenRobotics has created an automated system for sorting construction and commercial waste. By using optical cameras, laser cameras and haptic sensors, the system identifies the makeup of the waste materials and translates that information to robotic arms, which place it in appropriate bins to be properly reused or recycled.

Meanwhile waste-to-energy, a dominant force a decade ago, got 16 percent of the funding, followed by wastewater treatment. Wang said this is because in general, waste-to-energy isn’t the best way to get the most value from waste.

“In many cases, the net value of recycling waste materials is more than the value of the energy generated from them,” he said. “Also, reducing the need for virgin materials is the most important, from a perspective of environmental protection. Based on this logic, among the practices in circular economy, reuse is usually the best solution. Recycling and composting are the second best options. If reuse, recycling, and composting are not feasible or don’t make economic and environmental sense, waste to energy should be a good solution.”

Wang expects to see strong investment in material recycling technologies moving forward. In addition to policy and practical factors that create a need for recycling — such as limited landfill space and shrinking natural resources that lead to environmental regulations limiting virgin material use — Wang says recycling technologies will continue to advance.

“Recycling has not yet realized its full potential to serve the world in an innovative, environmental, and economic way,” he said. “Considerable opportunities for material, data analytics, and robotic innovations still exist in waste collection, sorting, and processing.”

In addition to providing opportunities for smart waste management and recycling companies, several recent studies have shown how circular economy initiatives can shrink entire sectors’ environmental footprint while saving companies money.

Circular economy principles could save the construction industry a trillion dollars while cutting its carbon emissions and waste, according to a World Economic Forum report published in May. These savings come from reusing materials — discarded asphalt products can be used as road-building materials and waste lumber as wooden flooring material, for example — and reduced waste hauling costs. Plus, recycled products generally cost less than virgin materials.

Another report published the same month found medical waste costs each operating room about $5,243 per year and reprocessing this waste could save one health care company about $25,000 on medical devices, representing 22 percent of its annual spending.

Trucost found circular economy approaches to plastics such as closed-loop recycling deliver $3.5 billion in environmental savings.

And on a company level, General Motors in its latest sustainability report said it has generated $1 billion in new revenue streams from recycling and reuse. The company sells vehicle parts with slight blemishes on a secondary market to dealerships, rather than throwing them in the trash.

GM also turns employees’ recycled water bottles into noise-reducing fabric insulation that covers the Chevrolet Equinox engine — thus saving money on purchasing virgin materials — and turns polystyrene foam packaging into footwear.

Additionally, the automaker generates a huge amount of metal byproduct, which is separates, sorts and sells, as well as reusing the material in its plants. “Part of that $1 billion included bringing materials back into our foundries, rather than buying metals on the open market,” John Bradburn, GM global manager of waste reduction, said in an earlier interview. “There are significant savings in keeping materials in a closed loop, and a circular economy scenario.”

In another example of a company making their processes more sustainable by employing circular economy principles, paper giant Sappi in its recently released sustainability report says is it minimizing the use of landfills by burning the by-products of its operations for energy use and providing other by-products, like fly ash, to local farmers that use it to improve productivity.

“There are multiple benefits in applying circular economy principals,” said Laura Thompson, PhD, Director of Technical Marketing and Sustainable Development at Sappi North America. “Higher levels of renewable energy separates us from the volatility of fossil fuels. Focusing on minimization of waste helps lower our input costs while simultaneously reducing costs for waste treatment or landfill disposal. We also utilize by-products from other industries as alternative fuel sources (for example, construction and demolition wood as well as tire derived fuel).”

Thompson points to a Cloquet, Minnesota mill as an example of Sappi’s cost savings from circular economy principals. A few years ago the mill was creating waste at a rate that would have filled the onsite landfill by 2020.

“The mill manager decided that he did not want to incur the cost of developing a new site or having to pay for offsite landfill disposal,” Thompson said. “With a concerted effort, the mill implemented major waste reduction efforts including a beneficial use program, which provides boiler ash and lime mud as soil amendments to local landowners. At today’s waste generation rate, it appears we will have at least another 20 years of capacity in the landfill.”


Additional articles you will be interested in.

Stay Informed

Get E+E Leader Articles delivered via Newsletter right to your inbox!

This field is for validation purposes and should be left unchanged.
Share This