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Industries impacted by this opportunity
growth opportunities in circular economy to 2030
Circular economy innovations should increase the value for the company, customers, and the planet. Indeed, successful circular economy initiatives can be value-creating and are already helping companies reduce carbon emissions by thousands of tonnes every year.
The transition to a circular economy system requires huge innovations in business models, strategies, technologies, materials, components, and managerial practices. Companies must switch their focus from products to solutions, making profits from sufficiency and waste prevention, and creating value by making products last. Firms must also examine all areas of their footprint and supply chain to determine the best way to reduce their impacts. Closed-loop supply chain management involves designing supply chains that minimise waste and maximise the reuse of materials. For example, a company might design a product so that it can be easily disassembled, and its components reused or recycled.
When many firms think of circular economy, they may think about recycling and in particular, plastic recycling. Recycling plastic still faces huge challenges to separate out plastics effectively and, in a way that doesn’t require huge amounts of energy.
To adopt a circular system, firms must attempt to “close the recovery loop”, which requires new technologies to de-polymerise, de-alloy, and de-coat materials. The ability to separate will be key. Chemical recycling (or molecular recycling) is a technically proven way to use waste plastics as a feedstock for new plastics, taking the place of virgin materials and offering a circular solution. Progress in molecular recycling has been made recently. Recent developments allow for processing wastes that have traditionally been challenging to recycle with mechanical methods, including layered plastics. Two firms, chemicals and specialty plastics company Eastman Chemicals and oil refining firm Neste, announced innovations in chemical recycling that enable plastic recycling. Eastman’s technical report is available here.
The construction industry is one of the most polluting industries on Earth. According to the European Commission, the sector is responsible for 35% of the bloc’s total waste generation. Emissions from material extraction, manufacturing of construction products, as well as construction and renovation of buildings are estimated at 5-12% of total national GHG emissions, according to the Commission. As a result, new investments have flowed towards recycled construction materials. Fine and coarse aggregates produced from construction and demolition waste (CDW) or from wastes and subproducts from other industries, such as waste glass. These materials may also be “mineralised” by injecting carbon dioxide into them for permanent storage, further reducing emissions.
IT technologies offer the key to supply chain transparency, which is critical for circular economy. Blockchain technology, which offers a decentralised, distributed, and public digital ledger, could enable decentralised real-time transaction tracking, for example. This could reduce delays, extra expenses, and human error, accelerating supply chain digitisation. Internet of Things (IoT), which describes the network of physical objects embedded with sensors, software, and other technologies, can be used to track and monitor products throughout their lifecycle, enabling better management of resources and waste reductions.
