Harald Tepper, Global Lead, Circular Economy at PhilipsAt the COP24 climate summit in Katowice on December 7, a coalition of European circular hotspots presented evidence and best practices of the circular economy as a means to bridge the gap in the climate agenda and identify where there is potential for scaling up.
Forward-looking members from the business and science communities were invited by the coalition to outline the significant contribution the transition to a circular economy, which aims to decouple economic growth from the use of natural resources and ecosystems by using those resources more effectively, has towards reaching the climate goals. The circular economy not only contributes towards CO2 reduction, it also keeps materials in the loop and is restorative in nature. The greenhouse gas emission (GHG) reduction potential is not cost driven but based on sound and inspiring business models that have significant potential in every market segment and can work both in developed and developing nations. The organizers aim to send a strong signal to the formal COP representatives about the importance of adopting circular economy strategies that can start today.
Here is a sampling of what they had to say:
Kari Herlevi, Project Director, Circular economy at Sitra: “Making better use of the materials that already exist in the economy, using circular business models and having greater material efficiency can take EU industry halfway towards net-zero emissions in an economically attractive way.”
A large part of CO2 emissions that the world agreed to reduce in the Paris Agreement is associated with producing materials. Sitra presented its recent study The Circular Economy - a Powerful Force for Climate Mitigation made in collaboration with European Climate Foundation and Material Economics which explored whether we can make better use of the materials already produced, and so reduce the need for new production. The conclusion: demand-side measures can take us more than halfway to net-zero emissions from EU industry and hold as much promise as those on the supply side.
The concept of the circular economy creates these opportunities through strategies such as recirculating a larger share of materials, reducing waste in production, replacing heavy products and structures with low weight alternatives, extending the life-times of products, and deploying new business models based around sharing of cars, buildings, and more.
Eva Gladek, CEO Metabolic: “It is essential for us to manage materials in a circular fashion in order to ensure that we have enough for the technologies critical to a low-carbon future.”
That resources are the missing link in the Climate Debate also came forward out of new research from Metabolic and Copper8 - Metal Demand for Renewable Electricity Generation in the Netherlands - that identified challenges in supplying the rare earth metals needed to build enough solar panels and wind turbines to meet Paris Climate agreement targets. The report found that achieving the Paris agreement goals requires the global production of some metals to grow as much as 12-fold by 2050. Circular manufacturing of renewable energy technology is one part of the solution.
National Governments signed the Paris Climate Agreement in 2015. They can set targets, support frontrunners and create financial and legal incentives. National governments are wise to integrate the Circular Economy in the implementation of the Paris agreement. Countries like the Netherlands set directions and boundaries. The Netherlands wants to be fully circular in 2050 and halve the non-renewable resource use by 2030. Whatever ambition a national government sets, in the end it is up to business to introduce innovations and actions to scale-up.
Harald Tepper: Program Lead Circular Economy at Philips: “Philips aims to deliver 15% of total revenues from circular products and services by 2020. Furthermore, the company has pledged that it will take back and repurpose all the large medical systems that its customers are prepared to return to it by 2020, and that it will extend these practices to all professional equipment by 2025.”
Philips strives to make the world healthier and more sustainable through meaningful innovation. As a leading health technology company, the journey to a circular economy is core to that vision, as is the ambition to become CO2-neutral in its operations by 2020. In 2017, the company published its first, externally audited Environmental Profit & Loss account (EP&L), as part of the Annual Report. The EP&L shows a substantial contribution from materials and components across the supply chain, thus further emphasizing the importance of a transition to the circular economy.
Philips has fully embraced circular economy principles, because of its benefits for society, and because of a strong believe that it is a driver for innovation and economic growth. That’s why it is actively working with other front-running companies, governments, and NGOs to advance the circular economy globally in the Platform for Accelerating the Circular Economy (PACE).
Jakub Wójcik, Vice-Chairman of Izodom Company: “Constructing a new building is similar to sending a letter into the future. Traditional buildings are like sending a gift with a growing bill to pay - an energy bill. Our children will be forced to supply them with their limited energy resources, as well as, they need to deal with the remains of our ‘gift.’ We work to make this bill the smallest possible and the burden with construction waste avoidable.”
The importance of the built environment sector for achieving circular economy is huge. It is the sector with the largest materials flows in the economy. Buildings and infrastructure have a very long lifetime and they are a dominant part of the footprint of a city. Today’s focus is predominantly on supply of renewable energy. There is far less focus on minimization of demand for energy. Energy loss related to cooling in hot countries is probably as impactful as energy loss related to heating in cold countries.
Izodom focuses on an even larger part of the lifetime footprint of a building by introducing smartly designed and effective thermal insulation building materials that have been produced locally and can even be reused after the life-cycle of a building into a new function. Izodom managed to send 19,000 buildings into the next century and saved, between 1990 and 2018, roughly nine million metric tons of CO2, which would have been emitted if those homes were built traditionally.
Arve Ulriksen, CEO Mo Industripark: “Most things start with a vision, and the goal is to set up your business in a way that enables you to fulfill your vision. It’s when we dare to say them out loud that the real work begins, and the pressure is on to fulfill them... More sectors need to step it up and vocalize a vision when it comes to mitigating climate change through circular economy. We need to be bold and think big if individual small contributions are to make up a cohesive whole.”
An industrial symbiosis constitutes a local partnership where partners provide, share and reuse resources to create shared value. The purpose of industrial symbiosis is to create loops of technical or biological materials while minimising the leakage and waste in the loops - demonstrating some key parts of a circular economy, at a local scale.
Mo Industrial Park is the largest industrial cluster in Arctic Norway; 108 different companies within the process industry, marine sector, mining, datacenters, the service sector and many more enjoy an advanced industrial symbiosis. Some overarching achievements include the recovery of heat from the industry equivalent to the annual energy consumption of the city of 24,000 inhabitants. This recycled energy is used to produce smolt within the park and district heating in the city of Mo i Rana, ensuring ice free streets and heated sports arenas, hospitals and other public buildings.
Also, when it comes to by-products from the process industry, Mo Industripark utilizes dust, slag, CO-gas and refractory materials over and over, making sure they stay in a circular loop.
Callum Blackburn, Head of Policy, Research and Evaluation at Zero Waste Scotland: “The circular economy isn't just about tackling climate change - it will also be a boost to local economies. We have identified a wide range of exciting business opportunities in the emerging circular economy, which could be worth £1bn to the economy of two of Scotland’s regions alone.”
In cities, everything comes together. Cities are the place of action. With large populations and an abundance of resources in a small geographic area, cities offer an ideal location for new circular economy business models. The volume of businesses and people also give sufficient scale to enable the change. A key strand of Zero Waste Scotland’s circular economy strategy is to take a cities and regions approach, as it allows for a cross-sectoral focus, taking advantage of the benefits and potential synergies between businesses from different sectors.
Recent reports focusing on Scottish cities and regions from Zero Waste Scotland have demonstrated the scale of potential opportunities. Going forward we must align public, private and academic sectors to fully exploit the opportunities that the circular economy offers.
In all, the circular economy is the way forward to decouple economic growth from the use of natural resources. It contributes significantly to the Climate Goals not as a cost factor but by viable business models. A circular economy transition can start small but has a tremendous potential to scale up. Unleashing the potential requires eliminating circular economy barriers and stimulating drivers to make the transition happen.
Recommendations that come forward when considering the many circular economy cases that are operational today include:
Integrate Circular Economy and Climate Policies.
Many governments have adopted legislation to improve waste management—just one aspect of circular economy and often not tied to climate policy—but few have adopted legislation that tries to reduce waste holistically and at the source or in conjunction with climate action. Circular economy policies targeted to the source of waste include lifetime extension, modular design, design for disassembly, material and resource passports, and international cooperation on supply chains.
As industry associations and the European Commission consider new mid-century ‘roadmaps’ for industry, they should include circular economy measures for cost-effective ways to achieve deep emissions cuts.
Policy levers for a circular economy and climate measures can work in tandem.
More emphasis on design. In the design phase there is a high likelihood that 80% of the environmental footprint can be determined.
Incentives for green public and private procurement help create demand for circular products. Public procurement is 20% of EU GDP and can create a huge pull factor for new circular innovations.
Extended producer responsibility schemes introduce life-cycle thinking in manufacturing, in supporting the marketing of better products, and in promoting responsible interaction between producers and consumers. When set up in close alignment between government, producers and taking consumers into account they have proven to be effective in the European Union and in front- running countries such as France.
Supportive tax reform can make it more attractive for companies to adopt circular business models, even if these are more labor intensive.
Use metabolic approaches to identify mitigation options.
Aligning standards and definitions across borders - for example, regarding a waste and a resource status.
Cities as the place of action
System change
The greenhouse gas emission (GHG) reduction potential of circular economy is not cost-driven but based on sound and inspiring business models that have significant potential in every market segment and can work both in developed and developing nations. A circular economy is also an opportunity to create jobs and raise standards of living. It requires that we continue to raise awareness and educate the leaders for tomorrow.
