Steve Vaughan-Jones, principal consultant at SLR Consulting, looks to frame the immediate opportunities for the waste and resource management sector in transitioning to a circular economy…
The “circular economy” is a concept, a good concept, but it is not something that we can poke or prod and it is unlikely that we will wake up one day to the realisation of “this is it, this is circularity”. It is however more likely that people will look back and remember some of the changes that were facilitated by a transition, similar to changes we may reminisce about when looking back from today; ie, “do you remember when we used to rent our home appliances or when we paid deposits for pop bottles”.
It is a concept that makes sense to be working towards in our attempts to identify systematic efficiency improvements. In becoming more circular (or sustainable), trying to change the entire mindset of organisations or people from the outset can be very difficult, particularly as we await clear Government policy and further incentive; we may become too old and too tired before anything significant is achieved. What can be achieved imminently is a series of efficiency improvements and behavioural changes to facilitate a transition. Therein lays the immediate opportunity for the waste and resource management sector.
“It is important that as a sector we firstly seek to address the inefficiencies that generally reside within our control, as collaborative opportunities will likely take longer to deliver, although both may (and should) be progressed simultaneously…”
These immediate opportunities for the sector are to be found in the detail, by identifying specific inefficiencies related to the supply chains we manage then seeking practical solutions. These inefficiencies may generally be aligned with one or more of the following opportunities.
- minimising rejects so that materials are available for future supply cycles, thereby not only increasing the efficiency of the materials’ usage but also the true economies of scale for processing infrastructure. This also includes the prevention, re-use or recycling of additional materials from the current residual waste stream, as residual waste itself essentially represents a systematic inefficiency (or reject)
- achieving and maintaining appropriate material quality, to ensure that its next cycle provides the same efficiency of service and/or product value – perversely the low oil prices currently observed make the economics of maintaining/improving quality more challenging for certain materials, due to lower production costs of substitute virgin materials
- increasing the process efficiencies of material collection, redistribution and processing within the supply chain – initially focusing on the specific use of assets including their lifecycles, utilisation rates and alternate uses (either in parallel or subsequent to its current use) but also the adoption of technological advancements and/or innovations
- providing additional value through underutilised (or unutilised) secondary opportunities within the subject supply chain, for instance better utilising existing infrastructure with renewable energy, rainwater harvesting, etc) or sourcing alternate/enhanced uses for by-products (eg, heat utilisation).
It is possible to look at these opportunities and think that we have already started along this journey, and we have, however if the wider economy continues adopt more circular policies and principles this will increase the significance of these opportunities, as well as amplify any frailties. This wider adoption also highlights two immediate internally-focused opportunities, relating to the governance and operation of organisations within our sector:
- incorporating and/or refreshing our own circular commitments, examples include reassessing how we value ownership versus lease prospects, reviewing or developing end of life policies, valuing the recycled content of the products we procure to deliver services (from trucks and bins to paperclips), the renewable content of our energy mix, or even biofuel/biogas usage. Obviously supply chain influence can be a limiting factor in this pursuit, but this could potentially be somewhat of a self-fulfilling prophecy for the sector, increasing the value of the services we inherently provide. Any disincentives faced will likely also be faced by other industries and will hopefully be addressed by the macro level (estimations and) lobbying currently observed; and
- business model innovation, the potential is partially limited for the public facing arm of the sector, due to the existing regulatory framework, but innovation opportunities do exist – for example, alternative charging mechanisms/metrics.
It is important that as a sector we firstly seek to address the inefficiencies that generally reside within our control, as collaborative opportunities will likely take longer to deliver, although both may (and should) be progressed simultaneously. Collaborative opportunities will require cooperation and information sharing between wider proportions of supply chains.
Specificity will still be the key to unlocking these collaborative opportunities, however instead of focusing on the supply chain inefficiencies of specific materials the focus is placed upon the inefficiencies of specific products or services, and seeking a solution; for example, products that currently have high secondary costs (or limited value) due to re-use, recycling, treatment and/or disposal restrictions. These inefficiencies could well exist across an entire industry or sector, but I guess the framing of collaborative opportunities will wait for now.
The waste and resource management sector has proven to be an adaptive and innovative sector, however the challenge now for organisations is to utilise these opportunities to ensure that they are not only a key facilitator of a transition, an ability that inevitably resides within the sector, but also continue to add value as the sector redefines its boundaries. To achieve this, it should be considered what circularity (or at least near circularity) may look like and what value the organisation can add to that more circular (or sustainable) economy; to avoid becoming one of those things we will likely reminisce.
