Why the circular economy is resonating with businesses more than sustainability ever did and why we need to be careful of using concrete as a vessel for hard-to-reuse waste streams.
The circular economy is a tonic to the woes of the “take-make-dispose” economy and has gained considerable recognition over the past decade. The focus on its economic value is breaking through organisational barriers in a way that the environmental focus has previously been unable to.
At its core, the circular economy focuses on the system of a product — considering not just the product itself, but also the:
- service that the product provides
- supply chain that enables that service
- broader economic, environmental, and social impacts of the system.
The circular economy is a way to rethink old patterns of consumption and to enable continued economic growth while delivering environmental transformation, social equity, and reduced business risk — if it can be delivered effectively.
The idea behind the circular economy is to separate the economic growth provided by products and services from the outdated, linear “take-make-dispose” economy and all its associated risks, including climate change and ecosystem damage.
We can no longer ignore the risks of the linear economy
Businesses also face their own set of existential threats.
There is a growing willingness to place environmental, social and corporate governance (ESG) at the heart of investment decisions. Responsible management of ESG, including adopting circular business models, is now recognised as a way to mitigate many long term economic and business risks. It’s also good for the corporate image. These risks include:
- price volatility of virgin materials
- supply chain disruptions from extreme weather or geopolitical events
- prohibition of hazardous chemicals upon which entire industries have been based
- minerals sourced from areas of conflict
- increasing adoption of extended producer responsibility laws — placing responsibility for a product’s end-of-life on the manufacturer.
These risks are coupled with everyday materials having ore grades that have been in long term decline. This means that producing new materials now takes more energy and more spoil and waste.
At the same time, the demand for resources grows, driven by an emerging middle class aspiring to the lifestyle that developed nations have become accustomed to — a lifestyle that has so far been enabled by overconsumption. Since the start of the twentieth century, the demand for materials has increased ten-fold and is expected to double or triple again between 2010 and 2030.
A circular economy is designed to be restorative and regenerative
The Ellen MacArthur Foundation describes the circular economy using a “butterfly diagram” that illustrates the continuous flow of technical and biological materials.
The maximum economic value of most circular economy systems can be achieved by the strategies in the “inner loops” of the butterfly diagram. These inner loops include strategies such as minimising material use, using products more heavily, reuse, and remanufacturing. The “outer loops” include recycling and downcycling — strategies that recover some of the material value but not the more significant value added through manufacturing and Intellectual Property.
Focusing on renewable energy is significant for two reasons. The most obvious reason is that burning fossil fuels is very linear and should therefore have no place in a circular economy. Secondly, the use of highly linear materials is often justified by businesses based on the lower environmental impacts associated with manufacturing or transportation.
For linear materials that require less energy to produce, or which are lighter and so require less energy to transport, the argument for preserving valuable resources competes directly with reducing the environmental impacts from energy use.
This trade-off is an important consideration and one that unfortunately convinces many to stick with the business as usual linear economy rather than addressing the root cause of the trade-off — how the energy is produced in the first place.
The circular economy model encourages the use of energy to be separated from the environmental impacts of fossil fuel consumption. This creates the opportunity for win-win scenarios where a trade-off between the wasteful use of materials and climate change no longer features.
Again, this highlights the need for circular economy practitioners to step back and consider the wider system within which their service or product operates.
The circular economy is more than just recycling
Retrofitting the circular economy to existing products is a comfortable place to start for many. The net result is that most businesses focus on recycling — the most straightforward strategy to bolt onto a legacy system.
While recycling and the use of recycled materials should be encouraged, the focus on these outer loops often misses the more considerable opportunities offered by the circular economy. Companies that are serious about the circular economy should begin knowing that they will almost certainly need to go further than recycling.
We need to reduce our negative impacts while making more positive effects
William McDonough and Michael Braungart, the founders of the cradle-to-cradle movement that preceded the circular economy, described a fundamental shift that we need to make — beyond doing “less bad” towards doing “more good”.
Doing “more good” isn’t something that usually fits with business as usual. Those that actively seek to do better are often the same businesses that are willing to tear up the rulebook and reimagine the service they provide from scratch.
Circular businesses have the opportunity to serve more people while purchasing less materials, which is a distinct economic advantage. Plus, if done equitably and sustainably it is also a marketing advantage.
A shift from selling things to providing a service can also leave less room in the market for competition, creating a first mover advantage. For example, Amazon’s shift from selling films, music, and books to providing online content.
The risk for those who are unwilling to lead the transition to a circular economy is that someone else will and will rapidly outcompete them due to lower costs and a greater market appeal.
The Materials Circularity Indicator methodology was born
I collaborated with the Ellen MacArthur Foundation on the Materials Circularity Indicator (MCI) methodology, which was published in 2015 and updated in 2019.
The MCI allows a user to quickly examine and evaluate systemic changes to their service alongside other complementary approaches, such as Life Cycle Assessments. This makes it easier to understand how implementing better systems can improve the economic, environmental, and social benefits that users seek for their business and their customers.
The MCI gives you a score between 0 (for a linear system) and 1 (for a perfectly circular system). Three main areas are incorporated:
- Where materials are coming from to form a product (the inner loops giving you a better score than the outer loops).
- Where materials go after their life as the product (again the inner loops get you a better score than the outer loops).
- How the product is used (making a product that delivers its service for longer by making it more durable, or by using it more heavily improves your score).
Circularity in infrastructure
The infrastructure industry has already started to adopt the Materials Circularity Indicator (MCI).
InfraBuild recently published their MCI scores alongside their Environmental Product Declarations (EPDs), the first company in Australasia to do so. This is an encouraging development as there is often an assumption that taking a more circular approach is enough to improve your environmental impact.
Implementing a circular economy can involve adding handling or storage, which can alter the economic and environmental calculations. Presenting EPD and MCI results together is an effective way of demonstrating that the system is considered holistically and optimised effectively.
MCI and EPD results are also starting to form part of the selection criteria for the interior fitout of buildings. Some sectors are starting to use MCI as both a component of their internal design toolkit and to guide their science-based targets.
Many circular economy initiatives only focus on doing “less bad”
Although project teams in the construction and infrastructure sectors are introducing circular economy initiatives, many are stuck in the “less bad” mindset while minimising disruption to business as usual.
Typically, these initiatives focus on waste reduction activities, which is undoubtedly towards a circular economy. However, on-site waste reduction strategies should now be standard practice for these sectors. It’s good business to only ship the materials you need to site and make sure that large quantities of these materials don’t end up in a skip.
Using recycled content isn’t always the most circular option
Another strategy to minimise waste is to use surplus resources from your own or another’s activities — an industrial symbiosis. This is an excellent way to reduce the virgin content in a product. Using recovered material requires consideration of the whole lifecycle of the product and looking carefully at how the recovered material may affect future recovery options.
For example, it’s straightforward to create inexpensive and reasonably durable products from mixed plastic streams that otherwise have little market value and end up in a landfill. However, the options to recycle these materials (sometimes referred to as monstrous hybrids) can be almost non-existent. This means that the production of waste has simply been delayed, rather than avoided altogether. We need to prevent such products from becoming waste, particularly plastics.
Using recycled material may be of lower value than alternative solutions. For the mixed plastics example, we might achieve a greater circularity (and economic gain) by:
- designing products to use a single grade of plastic
- adding separation infrastructure to avoid mixing plastic streams in the first place.
This would lead to a higher value material that remains in use for longer. Better still would be to establish systems to make sure the plastics can be reused many times before needing to be recycled at all.
The MCI shows we need to focus on durability and adaptability
Concrete is often considered useful as a means of sequestering problematic materials — the volumes are large enough and including a proportion of recycled content improves its circularity. If 20 per cent of recycled aggregate was used in a concrete bridge, for example, we would get an MCI score of around 0.2 (on a scale of 0 = linear, 1 = circular), without any form of end-of-life strategy in place. However, we still need to consider how that recycled content could affect the durability of that bridge and whether we might be creating another type of monstrous hybrid.
If we were to instead design the same concrete bridge to remain in service for twice as long — say 80 years instead of 40— we would effectively halve the materials requirement overall by avoiding the need to completely replace the structure over that 80-year timeframe.
The reduced materials footprint per year of service through this approach gives us an MCI score of 0.6 without any recycled content, which is substantially more circular than incorporating 20 per cent recycled content. Looking at this another way, to match the circularity of introducing 20 per cent recycled content on a 40-year design life structure, we would only need to extend the lifetime by 4.5 years. Of course, if we can use recycled content and extend the design life, that would be even more circular.
You might think a more effective circular option would be to invest in better materials and in perfecting higher quality builds to extend the design life. A problem with this approach is that long-lifetime products — such as those found in aerospace or in infrastructure — tend to be more expensive up-front. They also tend to become outdated within their own lifetime, lasting long enough to be inadequate or insufficient before the end of their natural service life.
For infrastructure projects, what we need today may not be needed in the future. For example, we’ve typically needed more roads as society has developed. With autonomous vehicles and the threat of pandemics having an impact on where we work, this trend may reverse and our needs might change radically.
The challenge is to be adaptable.
We must be adaptable to our changing needs
Given that a building, road, bridge, or car park may last more than 40 years, how do we make sure that we don’t have to knock it down just because our needs have changed? How can we accommodate our future needs by extending the existing infrastructure? How do we design those structural components so they last beyond the initial structure and can be reused in whatever comes next? And how do we address the most challenging reason for premature demolition — people falling out of love with architecture of the past?
If we can answer these tough questions, perhaps we can get circularity right for the infrastructure sector.
Dr Jim Goddin is technical director circular economy at thinkstep-anz. He specialises in circular economy systems design and worked alongside the Ellen MacArthur Foundation to co-author the widely adopted Material Circularity Indicator methodology.