Closing the circle - a new model for materials business
Catherine Joce, Materials Security and the Circular Economy Lead at the Knowledge Transfer Network, looks at a new business model for materials use.
Facing numerous economic, social and environmental drivers, many businesses are making the change from linear (often called take-make-dispose) to circular business models. The circular economy model argues that preserving the value embedded in products, components and materials by keeping them in circulation in the economy, ideally at their highest value, makes not just environmental but also business sense. An economic analysis conducted for the Ellen MacArthur Foundation valued the economic opportunity for Europe at £210bln annually for the medium complex goods sector alone. Businesses are shifting towards more resource-efficient and circular business models to reduce costs, mitigate supply-chain vulnerabilities and create value through brand differentiation.
The ideas behind the circular economy are nothing new – we are returning to concepts and models that went out of fashion during the era of cheap materials. We have reached a point where only around 22% of the resource flows in the UK are fed back into the economic cycle and as much as 80% of products are discarded after a single use.
This status quo was never environmentally desirable and the impact is becoming rapidly compounded by population growth. Now that commodity prices are rising substantially, price volatility is increasing and availability concerns due to geopolitics and supply monopolies are growing, businesses are feeling the heat.
Despite many compelling drivers for change, decoupling economic growth from materials use is proving extremely challenging, more difficult in fact than decoupling economic growth from energy consumption.
Out of 28 EU economic sectors, 11 achieved absolute decoupling of greenhouse gas emissions from growth in economic output during 2000–2007. In other words, 11 sectors grew while simultaneously managing to deliver absolute reductions in emissions.
In contrast, not a single industry achieved absolute reductions in material demand and most failed to deliver relative decoupling (materials requirements still growing, but less rapidly than the economy).
Despite these challenges, successful business propositions are possible using a range of approaches, such as remanufacture, product service systems, product-life extension, repair, redistribution, reuse and take-back schemes, often in combination and enabled by advances in digital technology. This change requires development of new relationships between businesses and customers, creating new value networks. In order to make this shift, true co-creation is crucial from those involved in these lifecycles – designers and material experts, manufacturers and resource managers, brands and retailers, consumers, policy makers and government, investors and academics.
New designs for a circular economy
Case study 1: New life from old paint – Seymourpowell and AkzoNobel decorative paints
Of the 337m litres of paint sold annually in the UK, 56m litres go unused every year. Innovative SMEs such as Newlife Paints, in West Sussex, and Castle Repaint, in Scotland, have developed methods to reprocess paint into a quality recycled product with a 50% lower carbon footprint compared to paint manufactured from virgin materials. A collaboration between Seymourpowell and AkzoNobel Decorative Paints sought to understand the challenges involved in creating a business model for paint reprocessing.Currently, only 1% of waste paint gets collected. Technical challenges, such as contamination, design of the tin and poor yield extracting paint from the tin, also need to be overcome. But, if successful, the project could unlock an estimated £175m for the UK alone.
Project Recover has since won further support from Innovate UK in the Supply Chain Innovation towards a Circular Economy competition. Phase two of the project aims to develop technologies to more efficiently extract paint from old, used tins, identify technologies for more effective colour matching of recycled paint, and work with end-customers to design new propositions and business models that help enhance the value and perception of recycled paint.
Case study 2: Sustainable retail design – 4G Design
4G Design won Innovate UK funding to develop prototype retail fixtures, designed for better end-of-life outcomes. 4G demonstrated that intelligent design, combined with informed decisions can deliver products, such as supermarket shelving systems, storage cabinets, signage and display units that are 100% recyclable while simultaneously reducing manufacturing costs.
Product design approaches included dematerialisation, reducing the number of parts, and introduction of recycled and recyclable materials. Traditional wooden shop cabinets are generally made from MDF or laminate, which almost always goes to landfill. A prototype cabinet was built entirely from a novel material called Ecosheet, manufactured in the UK from 100% recycled rigid plastic and recyclable in a closed-loop process. Apart from its environmental credentials, the material boasts a range of favourable characteristics – it is lightweight, easy to machine and durable. Critically, the product design and the material characteristics enable the cabinet to be manufactured without traditional metal fixtures, drastically reducing the number of different materials in the product, reducing complexity and cost, and facilitating recycling. Each cabinet is fitted with an e-badge, which can be scanned with a smartphone app to access information on the materials contained and deconstruction details, to maximise the product’s chance of achieving a good end-of-life outcome.
Catherine Joce is Materials Security and Circular Economy Lead at the Knowledge Transfer Network and supports businesses developing collaborative projects for the circular economy. For more information, email firstname.lastname@example.org