Embracing the Circular Economy

The Circular Economy

In an industrial sense, the term circular economy refers to a systemic view of resources utilization. It replaces the linear one pass take (from the natural world) … make (something incompatible with the natural world) … and dispose of (that is, burden the natural world with) production wastes along with the product itself at the end of its useful life. Instead, the circular economy envisions closed loop production which minimizes impacts on the natural world. Circular economy begins with products designed with multiple cycles of reuse and recycling in mind. Corresponding industrial processes are designed to minimize interactions which degrade the natural world, including interactions which occur anywhere along the product’s value chain.

Cutting to the Chase

It is readily apparent that a circular economy mindset might lead to lower costs, as well as a better world. The question becomes how to improve on what you are already doing to improve resource utilization. Here are some comments and examples to stimulate your thinking:

BMW i3 Press Kit Photo

BMW i3 Electric Vehicle

>> BMW i3 – The BMW i3 all-electric city car is an example of a circular economy product. Attention to sustainability is obvious in just about everything about the design and construction of the BMW i3. Recycled materials are used extensively.  Plans are in place for disposal of each component of the i3 at the end of its useful product life. For more on the i3, see BMW – A Case Study in Sustainability. [1]

>> Waste Management Corporation – Waste Management makes more than half of its money on recycling and upcycling refuse that people like you and me pay them to take from us. Sustainability – especially the circular economy aspect – Is integral to Waste Management’s business model. For more on how this works, see Waste Management Corp – A Case Study in Sustainability [2] and Waste Management’s 2015 Sustainability Report Update (which is entitled “The Circular Economy Revs Up”!) [3]

>> USBCSD – The United States Business Council on Sustainable Development is a not for profit business association that, among other projects, seeks to match bi-product streams with firms – often in other industries — that can use those bi-products as raw materials. In other words, one firm’s waste becomes another firm’s feedstock, to the benefit of both. See USBCSD’s website [4] for more on their work.

Scrap Tires 350pxh>> Tires – Where Waste Management Corporation seeks to find uses with the broad range of wastes it collects from residences, commercial facilities and industry, the tire industry focuses on new uses for its hard to dispose of product. Tire Recycling: An Industry Success Story was one of the first posts to this blog, almost five years ago. This lightly edited version still provides a useful example today: 

Tire Recycling: An Industry Success Story

(From 29 June 2011) 

American motorists discard a lot of tires; roughly one tire per capita or around 310 million used tires annually. On the average, tire carcasses weigh about 37 pounds, so that’s something like 11 billion pounds of waste rubber and metal every year. In the past, most of these used tires went to dumps, where they were ugly, mosquito – breeding fire hazards. Today, the recycle rate is sufficient to handle this year’s carcasses, while also significantly drawing down inventories at tire dumps nationwide.

Tire dealers add a state–mandated “tipping fee”, usually around $4.00, to each new tire sold. The “tipping fee” is passed on to the tire reclaim firm when the tire reclaimer collects carcasses from the tire dealer. The tire reclaimer converts the scrap tires into some useful form, usually by shredding the scrap tires and separating the rubber from the steel tire cords. The rubber scrap may be processed further, depending on the intended application. 

More than half of the recovered scrap rubber is used as tire–derived fuel, burned as an alternate to coal, primarily to fuel cement kilns. Ground rubber has a multitude of uses, ranging from landscaping mulch, to athletic fields, to molded rubber products, and on to de-vulcanized rubber, which can be used to produce new tires. Those who are interested can download a free report chock full of information on scrap tire products and markets at www.rma.org/scrap-tires. 

One take-away for all manufacturers is that the conversion of billions of pounds of scrap from dangerous eye-sore to useful products came to be through the efforts of a trade association. Trade associations offer a particularly useful vehicle for addressing many of the industry-wide problems and opportunities that Sustainability presents. 

>> Learning from Nature – Proponents of the Circular Economy point out that there are no wastes in biological processes. Everything eventually becomes food for something else. Actually, it is better than that. Biological processes operate at or near ambient pressures and temperatures, as opposed to the energy intensive demands of many industrial processes. I was surprised to learn that the Department of Chemical Engineering where I studied is now the Department of Chemical and Biomolecular Engineering – a strong indication of the growing importance of bio – based products and processes.

>> Books – Consider the entire value chain for books and other printed matter. Start with cutting forests, then the environmental concerns with paper making, ink chemistry, collecting end of useful life products, transportation costs across the value chain, and recycling or disposal costs. Compare all of that that with a Kindle. Replacing a tangible product – or a component of a tangible product, such as the operating instructions – with a virtual (digital) product changes everything!

For Smaller Manufacturers

The ideas behind the Circular Economy are quite powerful and potentially disruptive. Every manufacturer needs to consider how to modify its business model to embrace those ideas. As you can see, there are a lot of ways to approach this – new product development / new manufacturing processes / teaming with somebody like Waste Management or USBCSD / through a trade association / even virtualization – are just for starters, there are many more possibilities.

Chuck - FranceThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington

(Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about thriving in the 21st century … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] http://jerasustainabledevelopment.com/2014/10/04/bmw-a-case-study-in-sustainability/

[2] http://jerasustainabledevelopment.com/2015/01/30/waste-management-corp-a-case-study-in-sustainability/

[3] Download for free at http://wm.com/sustainability

[4] www.usbcsd.org