The Circular Economy: It’s time has come

It is not difficult to find collective evidence that global human activities have begun to overrun the resources of the planet. It is clear that ‘business as usual’ is not an option that industry can maintain for long. With France’s Total investing over $1 billion in batteries, DONG Energy switching to a new business under now Ørsted. BPs investment of $200m in Europe’s solar market, Indian Oil preparing to diversify into green energy, Exxon Mobil making breakthrough in bio-oil from algae with over $1 billion/year investments!

Back in early 2000 – Who’d have thunk it – that investments in renewables would come from these giants?

But there is a catch. Prior to the energy crisis, most economies were too extravagant; now, they have now overreacted and have become retrenchment-mad. It is imperative to think rationally and design progress with the right analysis and tools to achieve a truly sustainable society.

Circular Economy: Does it really exist?

It is instructive to think of the supply chains involved with the earliest industrial developments.  It was a case then of unlimited resources and unlimited wastes. No one was constrained by resource scarcity. A contrasting picture is where the proximal resources are limited. In such a system, the resulting supply chains become strongly interlinked and form a complex supply chain as we know today. Here, the flow of materials within the proximal domain may be quite large, but the flows into and out of the domain (resources to waste) are quite small. Such a system is more efficient than the previous one, but clearly not sustainable over the long term because the flows are all in one direction. The system is ‘running down’.

To be ultimately sustainable, the system has to be cyclical in nature, with ‘resources’ and ‘waste’ being undefined, since waste to one component of the system represents resources to another. It should be noted that cycles within the system tend to function on widely differing temporal and spatial scales, a behavior that greatly complicates analysis and understanding of the system.

Many present-day processes and products remain largely dissipative such as lubricants, paints, pesticides, automobile tires. Some examples where the specific materials are sufficiently precious for example, precious metal recovery are not all dissipative and come close to the Model C. A classic example is the recycling of rhodium metal used in the Oxo-process to generate n- and iso-butanol wherein, the metal is recycled to ppb levels!

On the broadest of product and time scales, there are many examples today that the flows in the ensemble are so large that resource limitations set in: changes in global CO2 levels, unavailability of waste disposal sites etc. Accordingly, the entire supply chain and affiliated systems will be increasingly under selective pressure to evolve to move from Model A to Model C.

Such disruptive entities are missing and should be created by fiat, if the circular economy is to proceed at a rapid pace.

Ideally the organization will be a cyclic flow of materials within the model, as they evolve into various modes of operation that are more efficient, and have less disruptive impact on external support systems.

The key would be enhanced communication among specialists, a restraint on the use of jargon, and a willingness to develop new concepts to deal with new approaches to understand the functioning of individual processes.

Approaches to Circular Economy

1. Material specific, that is, it selects a particular material or group of materials and analyzes the ways in which it flows through the entire supply chain. Such an analysis is generally made while products are in their manufacturing cycle, and any modifications to materials or processes tend to be capital intensive and difficult, and perhaps not the best way forward from a pure business perspective,
2. Product specific, this one selects a particular product and analyzes the ways in which its different component materials flows can be modified and/or redirected to optimize product environment interaction. Such an analysis is particularly appropriate at the initial design stage of a product, when decisions on alternative materials or processes can often be made at a stage preceding the investment of large amounts of capital for equipment or process development, an action that often locks in a particular material or process for the long term.

Influencing Circular Economies

Much of the energy is used in industry is concentrated on very few sectors: aluminum production, cement production, iron and steel industry etc. Major reductions in energy will follow from the trend to declining materials use, since modern technologies are much less energy intensive than the processes they replace – one needs to focus more on energy efficiency to make a sustainable argument.

Many technologies for such change are already in hand; the challenge appears to lie rather in achieving satisfactory economic incentives. For example, with plastics – today recycling rate is around 30% with a promise to 60% with various initiatives, globally. The largest groups in total non-fiber plastics production are PE (36%), PP (21%), and PVC (12%), followed by PET, PUR, and PS (<10% each). Polyester, most of which is PET, accounts for 70% of all PP&A fiber production.

Together, these six groups account for 92% of all plastics ever made. Approximately 42% of all non-fiber plastics have been used for packaging, which is predominantly composed of PE, PP, and PET. The building and construction sector, which has used 69% of all PVC, is the next largest consuming sector, using 19% of all non-fiber plastics.

Given the ubiquitous nature of plastics, it becomes rather difficult to proceed much further so long as the plastics are designed into products in such a way that their extraction after use is unfeasible or causes excessive degradation of the basic polymeric material – leaving very little scope to fit in the circular economy model.

Thoughtful initial design of products, utilizing green manufacturing processes to truly bio-based materials that degrade efficiently, will be needed. Ways around this problem may come from innovative work wherein the use of tandem biotech/chemical synthesis and material science has resulted in a family of materials that are produced from renewable resources while being completely biodegradable. While these are significant in their own accord, a more dramatic innovation is necessary.

There is a need for the big ten of the plastics industry (Dow Chemical, Lyondell Basell, Exxon Mobil, Sabic, Ineos, BASF, Eni, LG Chem, Chevron Phillips, Lanxess) to design efficient ways to create plastics that can be recycled appropriately.

Constraints & Incentives for Circular Economy

Circular Economy cannot be studied and optimized in isolation from the institutions of various kinds that promote or constrain the material/energy flow, for example:

a. Engineering excellence/efficiency can often promote cyclic behavior by designing processes and promote materials reuse,

b. Green synthetic chemistry to reduce the quantity of wastes of (better) to substitute materials or components that result in less toxic wastes,

c. Extensive taxation to promote raw material flows and import-export flows that are contrary to cyclization,

d. The overall economics may make it difficult to raise capital to alter a process and render it more efficient, that is, to improve it cyclic nature,

e. Government regulations may make the reuse of materials so difficult that enhanced waste flow is de facto encouraged. Policies should provide support to entities that help minimize such waste streams,

f. The rapid rate of technological evolution and obsolescence contributes to an enhanced waste stream. Accomplishing the much-to-be-desired-ends is to chart the obsolesce of capital and consumption goods at the time of their production, by designing with focus on planned obsolescence versus built-in obsolescence of various goods,

g. Standard of living of the consumer may encourage long product use or, alternatively, may promote early product disposal,

h. Adapting Blue Economy, where the best for health and the environment is cheapest and the necessities for life are free utilizing a local system of production and consumption that works with what you have, i.e., use local buy local, eliminating multiple steps involved in the supple chains,

i. The price system, by failing to include relevant externalities in prices and costs, may preclude adoption of circular economy by manufacturers and producers. Alternatively, one could use force majeure by ensuring that all environmental costs and benefits are priced at their full social value, for example with a CO2 tag – higher the CO2 emissions should result in a higher penalty. 

Appropriate methodologies to assess circular economy parameters are vital, since environmental tradeoffs are certain to arise, just as to economic and technological tradeoffs.

A few hundred years ago, industry changed from a small, labor-intensive, unobtrusive activity to one that has become large, obtrusive, and potentially destructive to the resources that support it. Industry now has the opportunity to take a step as great as was taken in the industrial revolution of the 18^th century: to move from unconstrained use and disposal of materials to manufacturing processes and approaches that make products and impacts into account in the same design and with the same degree of foresight. To conclude – at best, we as a society can achieve a quasi-circular economy since achieving a perfectly circular economy is an ideal case scenario – and frankly – ideal systems do not exist!

However, miracles do happen. They must be planned in order to occur. Similarly, in this time of global crisis, we must work out our own salvation. If we can afford to sink ships, that cost millions of dollars to construct, merely for giving target practice to the gunner, then surely we can afford to destroy other obsolete and useless products in order to give work to millions and pull the world out of the dire catastrophe in which it is now wallowing.