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Why going circular will give new life to EU resources

Steve Lee 182

By Steve Lee, chief executive, Chartered Institution of Wastes Management (CIWM)  

In December 2012 the European Resource Efficiency Platform published its Manifesto for a Resource Efficient Europe, stating that: “In a world with growing pressures on resources and the environment, the EU has no choice but to go for the transition to a resource-efficient and ultimately regenerative circular economy (CE).”

The CIWM concurs, and has been encouraged by the consensus that has since developed across Europe that the circular economy agenda offers huge potential for economic growth, job creation, resource and energy security, and environmental protection.

But there are some hurdles to overcome. At EU level, the troubled past and shifting time- table of the CE package, coupled with recent warnings about the role and desirability of regulation, call into question the level of intervention that the European Commission is willing to consider.

In the UK, the political commitment from Whitehall, in contrast to Scotland and Wales, appears weak. Instead of ambition and engagement, we are seeing the ‘green growth’ agenda increasingly marginalised, with further extensive cuts to the budgets of the key departments and the erosion of other incentives and investment support mechanisms.

Such a landscape calls into question how far we are going to be able to move towards resource-efficient economic models because any significant progress will require tangible action.

At an EU level, it will require intervention throughout the ‘supply chain’, linking different areas of policy and legislation to create both ‘push’ mechanisms at the end-of-pipe in terms of waste and ‘pull’ mechanisms to encourage change at the beginning of the product cycle in terms of design, standards, procurement and consumption models.

There will need to be a broad range of measures to stimulate more resource-efficient behaviour, from ‘smart’ waste targets through to fiscal and other economic incentives further up the supply chain, along with a fundamental review of the role of product stewardship. And there must be a level playing field, with clear and consistent definitions, metrics and reporting requirements.

Across the UK, policies and legislation that are developed to meet the EU CE package must dovetail with industrial and local economic development strategies to deliver maximum benefit for the UK economy. This will require a shared vision and far stronger co-ordination and strategic planning across and between governments and departments.

It will also require a fundamental review of the role of local authorities. The core role they play in capturing secondary materials means their remit must be re-evaluated to ensure they are adequately supported and resourced. 

David Palmer- Jones 182

By David Palmer-Jones, chief executive, Suez UK

Explaining to the average business what a circular economy is and, more to the point, what benefits it might bring to its bottom line, is like trying to nail jelly to the wall. Each company and business sector has unique characteristics, further differentiated according to company size and positioning in its supply chain.

For some businesses there might be little perceived advantage in ‘going circular’ other than in reducing waste disposal costs by recycling more. For others, a more sophisticated offering might involve closed-loop recycling whereby secondary materials are returned to the customer for use in their manufacturing process. Ultimately, businesses have to convince themselves that this is worthwhile but, having said that, our sector, as a service provider, can also do a lot.

The first requirement is for us to fully understand the business of our customer and to realise that a one-size-fits-all solution across all sectors will no longer work. We have to understand the drivers and challenges facing small, medium and large customers and come up with tailored solutions that meet their needs.

That is a huge challenge. At Suez, we are segmenting our customer base, getting to know each industry sector in depth and then getting to know our customers in detail.

The second requirement is to present well thought-out waste management solutions that will save customers money. Legislation undoubtedly plays a big part here – for example in making non-landfill solutions more attractive to the customer. Companies might also be driven to secure their resource base because of uncertain foreign suppliers, so we need to be able to communicate the costs and risks when presenting a solution.

The watchwords are undoubtedly partnership working. In most cases, and certainly with large customers with complex businesses, it is simply not possible to work in the old way, where the customer and service provider work at arms-length and interact only when putting in an invoice.

The customer recognises the need to work collaboratively with us, so that we can together come up with a way of working that facilitates better waste management: waste segregation, less contamination, enhanced value. The better we can work together, the more we can help to deliver savings.   

Iain Gulland 182

By Iain Gulland, chief executive, Zero Waste Scotland (ZWS)

Scotland is serious about making the transition  to a circular economy (CE), with a  national strategy due later this year.  Working with others, ZWS has been at the  forefront of identifying and researching  opportunities and putting plans in place to  turn the theory into practice. 

We have published a series of reports  making the case for a CE: establishing the  economic and environmental drivers and  shining a light on key sector opportunities,  such as reusing food and drink by-products  and decommissioning offshore oil and gas  installations. 

We are also helping forward-thinking businesses,  ranging from start-ups with innovative  ideas to helping well-established  businesses adapt their business models or  expand their services. 

We are also focusing on how the public can  engage with different ways of using and reusing  things. We recently ran a social media  campaign called #MakeThingsLast which  tried to get people thinking about new ways  to repair, reuse and remanufacture items  in everyday use. There were some great  ideas, and it is clear that many people are  ready for the CE because it taps into a mindset  of being creative and making the most of what  we have. 

It is obviously interesting to reflect on what  this paradigm shift might mean for the traditional  waste or resource management sector.  It is clear that the young people who took part  in our #MakeThingsLast workshops, for  example, do not see this in any way connected  to the ‘dirty’ business of segregating, collecting  and processing waste. For them it is all about  designing differently and changing how people  use things so there is little or no waste. 

There is still a huge role for resource management  providers in creating a CE. It is going  to mean a continuous evolution of the industry,  which it has already embraced in terms of  the shift from waste to resources – but it will  need to change further still. In particular, it  will be important to embrace the role of ‘service  provider’ not ‘waste collector’. 

Many progressive companies are already  heading this way, marrying a combination of  expertise, from behaviour change specialists  that help companies reduce waste to supply  chain and logistics capabilities that help with  asset management, and materials and markets  knowledge to ensure the maximum value  can be extracted from items that are no longer  needed. 

This kind of holistic service is, in my view,  where resource ‘solutions providers’ are going  to be most profitable in the years to come as  we make the CE a reality.       

Ian McAulay 182

By Ian McAulay, chief executive, Viridor

Europe has started to throw away old thinking about waste and is recognising its value as a resource. The fresh EU circular economy (CE) consultation can reconnect policy in partnership with national governments, realising the opportunities of the resource sector.

This reconnection needs strong, clear and consistent policy from political leaders which encourages private sector investment. Viridor supports the European Commission’s ambition to develop a CE where a greater proportion of resources remain within the continent supported by enhanced reuse, recycling and reprocessing capability.

We recognise, however, the economic re- alism of 28 member states with differing collections, reuse, recycling and recovery infrastructure, investment profiles and recycling performance. This means the progress and investment of each member state should not be undermined by a one-size-fits-all blanket target.

The UK Government is correct on the need for a balanced package of proposals which are ambitious, evidence-based and feasible for all member states. The challenge is to meet environmental objectives in a way which also promote growth and jobs by devising a simple structure which gives high-level direction while leaving discretion to member states and businesses in how best to meet these requirements.

Here targets can have a role, but other measures such as voluntary agreements with industry, reward schemes and measures to promote changes in household behaviours may be more effective. It is right to seek the best mix of measures to drive resource efficiency and waste reduction without disproportionate costs to business, householders and local authorities

The Commission should recognise the importance of quality, not just quantity, and should seek to ‘lock-in’ and institutionalise quality. It should do so by encouraging the development of quality-focused collections, sorting and reprocessing infrastructure while supporting the principal of subsidiarity by avoiding unnecessary regulation.

The Commission should prioritise preventive spending and smarter commercial contracts which refocus resources for councils and municipalities or corporate recycling partners on shared risk, and on engaging, consistent communication that delivers savings through increased waste prevention and on the cost of contamination while arresting potential declines in recycling performance.

The Commission should prioritise the fight against rising waste crime and support strong regulatory regimes and consolidation. It must avoid fiscal (including energy recovery tax) or other policy drivers which move the goalposts, add substantial cost and undermine recent multi-billion pound investment in recycling and energy recovery infrastructure. The Commission also needs to recognise and support the vital role of energy recovery as an important transition technology in a revised waste hierarchy.

Europe’s consultation can make a real contribution to a CE. If balanced by economic realism, it offers a real driver to help give the world’s resources new life.

Gavin Graveson 182

By Gavin Graveson, chief operating officer, public and commercial, Veolia UK & Ireland  

By 2050, the world’s population will have risen to more than 9.6 billion, representing a massive change in supply and demand of resources. Highlighting this fear of shortages is now starting to drive the circular revolution – one which Imperial College London believes could deliver £29bn of GDP to the UK economy and at least 175,000 jobs.

The research found that a combination of closing the loop on resource use and moving to a service- rather than product-based economy has the potential to add 0.18% – equivalent to £2.9bn a year to GDP over 10 years by:

  • Deriving £23.7bn through reprocessing and recycling materials from households and commercial & industrial sources
  • Harnessing £3.1bn opportunity of moving to a service-based approach
  • Saving businesses £2.3bn in taxes currently paid on waste sent to landfill
  • Generating £1.1bn in energy from materials that cannot be reprocessed into new products
  • Capturing £888m of value from unwanted chemicals

The report takes into account the existing £2.2bn contribution of the waste management sector to the circular economy

Veolia’s vision is based on resourcing the world by improving access to resources and protecting and renewing those same resources. In terms of business need, the rapidly growing global population and fastincreasing global consumption mean that security of supply is now recognised as one of the biggest risks to continuity.

Companies are examining their supply chains forensically, looking at all the resources involved in the production process to find if there is additional value to be extracted.

This is the industry of renewal. From repair to reuse, redistribution and refurbishment, and remanufacturing to recycling, we need to start thinking of raw materials as precious. Instead of just a concept, we believe ‘living circular’ is becoming a reality, with companies adopting the principles and showing how such thinking can take effect.

We believe the change will be so dramatic that Veolia has made a fundamental shift in its business model to one of resource management. More than 20% of our business is now circular and we anticipate 40% by 2020. We are now turning unwanted materials into sustainable green products and green energy, and taking a lead in low-carbon heat and power.

The attitude to products made from recycled materials has changed and there is the greatest scope now for circular thinking. Making a product from recycled materials is competitive in terms of price, quality and assured in terms of supply, and there are a growing number of opportunities to divert waste from landfill and reuse materials a second, third or fourth time.

By getting closer to customers and innovating, we can meet environmental challenges that can be measured in terms of moving materials up the waste hierarchy, producing products with a smaller environmental footprint or cost, or improving security of supply.

Products that take into account a second or third life, better supply chain pricing and better resource efficiency can all make a difference to the bottom line. But with £29bn at stake, it is critical to think about the value we can offer to a truly circular economy.    

to the bottom line. But with £29bn at stake, it is critical to think about the value we can offer to a truly circular economy.   

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