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Turning on the circular economy

The concept of a closed-loop or circular economy is not new, but now it is being championed by business and is seen as an opportunity. What are the barriers and opportunities and how will it help to secure resources?

Marcus Gover, director of the closed-loop economy at WRAP

Marcus Gover

WRAP staff will be speaking on a number of themes at RWM, including resource security, textile collections and energy from waste. These all have a crucial role in the concept of the circular or closed-loop economy. This offers a truly sustainable opportunity for growth while offering protection against external instabilities, be they environmental, political, financial and so on.

In an increasingly volatile world, broadening our scope for securing the resources we need - in the appropriate quality and quantities - has to be a priority. This will enable us not only to retain the raw resources, but also to grow our knowledge and skill base about how to deal with these most efficiently.

UK industries will increasingly be looking for these ‘ingredients’ as our technologies grow.

The European Commission has identified 14 economically important raw materials that are defined as ‘critical’ due to their importance in technology development, and are subject to a higher risk of supply interruption.

According to the Commission: “Supply risks may be accentuated by the low political-economic stability of the main supply country, as well as by the low substitutability and low recycling rates of the raw material itself.”

Interruptions to supply, whether environmental or geopolitical, affect not only the availability but also the price of these resources. WRAP has major programmes of work identifying the possibilities for preventing waste arising, so that the resources we have are used smartly, then improving the efficiency of recycling and reuse.

Steve Lee, chief executive of the Chartered Institution of Wastes Management

Steve Lee

‘Circular economy’ means different things to different people. For some it is about finite material resources and the need to shift our mindset away from the product to the ‘service’ we get from it. For others, it covers resources such as energy, water and biodiversity - challenging the very fabric upon which society has based its consumption and business models.

It brings many other questions too. Do we acknowledge that there will always be some degradation of resources or are we talking genuine ‘zero waste’? What will drive progress towards a circular economy - commodity prices and availability (or lack of it), government policy and regulation, and financial mechanisms?

Many talk about the agenda being driven primarily by business and industry but, ultimately, business and industry serves the demands and buying habits of individuals - be they consumers or commercial customers. Does that make the concept of a circular economy a kind of ‘all or nothing’ proposition? And how does it overcome geographical boundaries and global market forces?

Whatever circular economy means to us, the need to make it happen is no longer under debate. So the waste industry, like many others, has to decide what role it can play and where it can add maximum value in enabling and supporting closed-loop systems.

The fight to keep resources working in the economy for far longer is undoubtedly going to be challenging. We know we cannot keep doing the same thing and expect different results but this is change of an order of magnitude that is hard to imagine.

There will be no shortage of energy, enthusiasm and ‘blue skies’ thinking - this is an agenda that is engaging and sexy at the strategic end. Those of us in the waste industry have to be a little more pragmatic, but we have the skills, the knowledge and the adaptability to play a key part in the resources revolution.

Ray Georgeson MBE, chief executive of the Resource Association

Ray Georgeson Resource Association

The concept of circular economy gained prominence recently, thanks to the Ellen MacArthur Foundation and others that have helped to construct the intellectual and economic arguments in favour of this forward-thinking economic model.

Part of why these ideas have had such resonance with many in our sector is that they have been seized upon as a positive and rational way forward in the face of the limited ambition seen in last year’s Waste Policy Review, reinforced by the continual drip of negativity about green policy initiatives coming from the Chancellor’s office.

The popularising of the circular economy is curious. Much of the persuasive nature of the thinking and research comes from the fact that it takes a business-led approach and has been mainstreamed by hard-hitting business consultancies such as McKinsey - hardly a group of hair shirted environmentalists.

At the same time, much of the critique about the lack of impact in Government waste and resources policy is also coming from the business community. The recent call led by EEF and signed by many industry leaders and associations (including my own) for more action on resource security is a strong example of the increasingly outspoken position of many industry representatives.

The recycling and reprocessing industries are vital to the future circular economy. The circular economy model needs to embrace consumers, local authorities and industry alike in the drive for a vision of material resource use which seems some distance away from the short-term preoccupations of politicians and some in the waste industry.

Colin Drummond, chief executive of Viridor

Colin Drummond

The two biggest environmental issues facing the world are excessive resource use and climate change and they are closely interlinked. The concept of a circular economy is not new but it has an important role in addressing these issues.

For years we have been used to terms such as lifecycle assessments, eco-design, closed-loop systems, resource efficiency and resource security, all of which have common and integral elements to the principles of a circular economy. The key challenge is not the terminology used but actually delivering a low resource and low carbon economy.

There is encouraging political and business support for the principles of greater resource security and efficiency, and growing acknowledgement of the challenges we face in working towards it. Some leading businesses are beginning to show how to link this ‘new’ thinking with increased profitability and economic sustainability.

The recycling and waste management sector has made greater progress than most, driven towards major change by a robust combination of regulation, environmental taxation and customer demand. We have seen huge strides in recycling, both in volume and quality terms, and certainly in its ‘normalisation’ in household and business behaviour.

At Viridor, more than 50% of our profits now come from recycling and recovery, leading us to believe that being green is good for business. However, years of further transition are required, not least on waste prevention and designing for reuse and recyclability.

While governments and businesses ponder how best to incentivise and deliver a circular economy, our sector will be delivering the infrastructure to recycle more and use residual waste as fuel to generate a greater proportion of the energy we need.

During the coming years of transition to greener and more circular economies, energy from waste in all its forms will contribute to greater resource efficiency alongside recycling. If we use the fuel here in the UK, it will help resource security.

It’s a step in the right direction.

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