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Circular Economy – Easing the Transition

October 29, 2014

Circular Economy
Circular Economy

Dame Ellen MacArthur and others outline the European legislative and policy levers needed to transition to a circular economy

Speaking at a circular economy debate in Brussels hosted by Philips earlier this month, Dame Ellen MacArthur asked the audience in front of her to let their minds momentarily wander. “Imagine if investment within the European Union was focused on business models that could accelerate this – helping to decouple growth from resource constraints,” she said. “There’s a massive opportunity here for us in Europe. We feel the thirst for this need, for the enabling conditions to help this transition.”

The transition MacArthur talks about – our linear industrialised processes evolving into more restorative mechanisms that can keep resources in use for longer – is a challenging one, not least because it requires systems redesign at every level. Knowing where to start on this journey is a daunting prospect, but MacArthur believes sheer determination is a persuasive enabler. For her, overcoming entrenched attitudes and behaviours is half the battle.

“It is a huge challenge to shift our economy from linear to circular, I can’t deny that for a second. But it depends on the way that you see this,” she said. “One of the biggest challenges is the change in mindset. Because the case studies are there, we know that this is possible, we’re able to do so much of this.”

This view was echoed by Royal Philips’ senior vice-president Henk de Bruin, who oversees his company’s global sustainability drive. He told delegates: “The moment you start thinking about waste as an economic good, you start thinking differently.” Bruin advised businesses looking to make the transition to build on their existing strengths. “Look first at what you are doing and identify if there are circular elements in that. We looked at our own business and said ‘This is already circular, but we can improve it more’.”

Many leading on this agenda are in favour of policy intervention, in particular strengthening business obligations around eco-design and producer responsibility to stimulate market demand for more circular goods and services. MacArthur said that legislation was an increasing area of interest for her own foundation’s work in this field. “We are very used to hearing the words ‘legislation’ or ‘taxation’ as something very negative, but they can be hugely positive things, they can really help to steer. There’s an opportunity here to reset things.”

MacArthur revealed her foundation is about to embark on a new project – the development of a policy toolkit to identify what legislative levers are required to accelerate circular transition. This should hopefully assist more progressive policy makers in their decision-making, such as the European Commission, which launched its own circular economy package of measures earlier this year.

William Neale, member of cabinet for the European Commissioner for Environment, admitted the proposals had taken the Commission outside of its comfort zone. Addressing the audience, he said: “When we go higher up the [waste] hierarchy, when you start to talk about what and how to make the markets work for recyclates, when you start to talk about remanufacturing, reuse and prevention – in terms of EU policy tools, it’s not something we are used to dealing with.”

Neale pointed to various Directive revisions, particularly within batteries and waste electrical and electronic equipment (WEEE), that should help promote moves towards circularity. “In the case of WEEE, we are piloting eco-design criteria for flat screen televisions in terms of the mercury that might be in them, in terms of lead in the plastics, to enable more easy dismantling and recycling.”

He added that the Commission was pushing for minimum rules for extended producer responsibility – a move that could make businesses more accountable for the products they produce and sell once they have been used by consumers. “We have a lot of instruments we could use, in the case of WEEE we are using a certain number of them, but we still have big gaps there. The fact that the markets aren’t working particularly well, there are system failures … problems in terms of consumer behaviour and producer behaviour.”

Part of the problem is a lack of understanding around product, component and material flows in the overall system, especially across global supply chains. These need to be mapped more effectively to enable stakeholders within a supply or value chain to identify where the system leakages are (where resources escape the cycle to become waste) and where there is most value to be gained in retrieving these resources for re-entry into the industrial process.

Such moves would be welcomed by companies such as Umicore, a global materials technology group that specialises in transforming used metals into hi-tech materials. Its senior vice president for precious metals refining Luc Gellens told delegates that his firm offers a closed loop customer takeback service for production scrap. “It’s a service model whereby in many cases our customers own the metal and we recycle it for them,” he explained.

Calling on Europe to “nurture and develop” its recycling sector, Gellens said: “We can rethink consumption, but I very much doubt we can reduce the use of metals. The need for metals will continue to go up and without recycling I think for a number of metals [in use today] the world will be in difficulty for a number of applications.”

According to MacArthur, recycling is “the loop of last resort” within a circular economy, but she was keen to emphasise the positive. “Most of the value in a circular economy lies along the inner loops; the reselling, the remanufacturing, the disassembly, the de-componentisation. Within a circular economy, the recycling increases because companies are creating a system whereby those products come back.”

Praising the European Commission on its policy work so far, Philips’ Bruin expressed a desire to see more fire within government. “I would challenge the European Union to see whether or not Europe can really become the stage on which we drive the circular economy, simply because it drives economic value and it reduces ecological footprint – what more could you want?”

Acknowledging this, Neale said the Commission was keen to hear from those businesses innovating at the sharp end. “We don’t always hear from the progressive companies … we need to find a way to get that advocacy happening here in Brussels. We’ve done a good job so far, but we are a long way from being able to say that the enabling conditions are there.”

Content on this page is paid for and produced to a brief agreed with Philips, sponsor of the circular economy hub

Maxine Perella is an environmental journalist specialising in the zero waste and the circular economy agenda

#Recycled from http://www.theguardian.com/sustainable-business/2014/oct/20/recycling-the-loop-of-last-resort-within-a-circular-economy