Let’s talk about it: Circular economy

5. 11. 2019 | Source: BusinessInfo.cz

Successful implementation of fundamental changes requires overcoming obstacles, identifying drawbacks and creating new solutions. The transition from linear to circular economy is not different. Why should we want to become part of the circular economy? What are the benefits?

"Let´s talk about it" is a project of Unipetrol company. It´s aim is to explain various sustainable solutions, including all their benefits and drawbacks.

Why do we want to move toward a circular economy? What advantages would it bring?
I think it’s quite straightforward, at least for me. In a linear economy, we take resources, make products out of them, and then distribute them across the whole world. We consume them and at the end of their lifecycle, they become waste. And we’re not very effective at working with that waste and recycling it.

Currently in the EU, we produce 2.5 billion tons of waste every year. Half of that gets landfilled and incinerated. A circular economy proposes a healthier alternative by proposing a system where there is no waste. In a circular economy model, waste is a resource.  Same as in nature, where the concept of waste doesn’t exist.

Watch the interview

Of course, waste is a problem. If we look at any natural system there is no waste. How did our economy get this wasteful? Is waste a necessary part of the linear economy?
VV: Until recently, humanity wasn’t such a waste-producing entity. A few thousand years ago, we didn’t produce as many products or types of materials that would become waste. People were also quite smart about finding ways to extend product lifecycles by finding use for them even after they’ve served their primary purpose. Academia believes that this changed after the Second World War when economy needed to be started again. The US and other Western nations began producing a lot of great stuff, in large quantities. The idea was to put a fridge into every home, globally. That’s when the different age… of the linear economy and thus waste, started. It’s just getting worse.

How important is ownership in this whole debate? Will ownership change when we go to a circular economy?
I don’t think that it starts with the consumer, who already buys a finished product or service. Someone has to take resources and turn them into a product, then distribute it and sell it, so that has to be taken into an account. However, you as a consumer do play an amazingly important part in that whole process. Ownership itself is also an amazingly important part. It’s a big topic and actually a big problem. The circular economy relies on a transformation of the concept of ownership, from owning something to using services. Maybe you don’t need a lightbulb, you just need to use the light as a service, maybe you don’t need a car, and you just need to get from point A to B. But that kind of thinking offers great challenges.

Presumably this system makes sense and yet so far, it doesn’t exist. That must mean there’s costs involved. What costs will we have to absorb to make the circular economy work?
Right now, circular economy relies on using and working with what we already have. That means, for example, using recycled content in new products. Sometimes that comes with a bigger price tag than if sourcing from virgin resources. One bitter pill that will come with owning more circular products will be higher cost. The other issue is with the concept of ownership. In order to really have a successful circular economy model where materials flow in perpetual cycles without loss of quality, the producer has to stay in charge of that material. It requires a change of ownership, from the customer to the producer. People are sometimes not interested, or maybe not ready for that. Working here in Czech Republic has shown us that sometimes you manage to push through an ambitious pilot or a solution that can change a whole industry, but that change can be quite disruptive. With disruption there are some winners and there are some losers. So the current system is fighting hard against these strong changes.

I think that what’s exciting about this- it’s a true transition. We are looking at a big change. Who will be driving it? Will it be consumers? Company owners? Is it going to be governments, providing incentives and tax breaks? Who is going to drive this groundbreaking change?
I think that it’s coming from all sides. It’s coming from consumers who want to see change around them and are looking for ways to change their purchasing behavior. It’s, of course, also coming from the companies themselves. For them it’s not just a way to look more sustainable, it’s a huge business opportunity. There’s tremendous potential and profits to be gained from changing from the linear to the circular economy, with a lot of bitter pills on the go. Governments also play a huge role. We can work with one company on making their product circular, but one paper from the Czech Parliament can change the whole system. Everyone needs to play their part in making this change happen, but I see the biggest driver in companies themselves.

In regards to materials, I am particularly interested in plastics, which have incredible potential. Yet, at the moment we see a lot of problems with waste and recycling of this particular material. I think the circular economy gives us a lifeline to change how we are treating it. One thing at play is our perception of value in these materials, in these chemicals. In the linear model, we see value when we buy, we use the value and then we discard. We don’t actually see the value at the end. Circular economy could help that. Could you tell about how suitable is plastic material for a circular economy?
Well, I think that there’s a lot of talk, maybe even hysteria around plastic pollution. Rightfully so, 8 million tons of it end up in our ocean every year…we’re seeing pictures of pollution from all around the world. Clearly something has to change. But it’s not just about plastic. 2 million tons of the waste we throw into black bins get buried underground, leaking into our soil and the atmosphere. It’s not just plastics that are the problem. In the realm of consumer plastics we are currently busy with the fact that there are too many types- PE,PP,PET… it’s very confusing not just for consumers, but especially for the recycling industry.

About 40 % of plastic bottles transported in yellow bins are not smashed, so we’re transporting air.

There are different types of plastics, of course that’s important to say. Many plastics are very highly reusable, but then there’s issue with single use plastics, in particular with bottles. PET bottles, which are being discarded and losing their value. When I was a young kid, I remember broken glass bottles everywhere, until they went circular and people saw value in recycling them. I think we’ll have to find a similar system for plastic bottles. Is there any hope in that regard, are any people doing some interesting projects there?
Yes, it’s us. We’re working with the biggest PET bottled water producer in Czech and central Europe, Mattoni. About a year ago, they approached us with the question of how to make their product more circular. After assessing that challenge, we figured that the only way for such a company to be circular, is to set up a deposit system. To put extra economic value, let’s say three crowns, on the material at point of purchase and give it back at point of return. By adding an economic incentive, we are already solving one big problem with plastics, which is pollution. It makes sense both economically and environmentally…

So this would be a depository specifically for PET bottles.
Right, same as people already do with glass refillable beer bottles. It’s not new for the Czech consumer. This time it’s different because they’ve been taught to take PET to the yellow bin, maybe smash it… that hasn’t been so successful- about 40% of plastic bottles transported in yellow bins are not smashed, so we’re transporting air. So yes, people know what the deposit is; they know it from the beer bottles. This time it’ll be for plastic ones. The difference is what happens with it after you return it to the retailer.

I get my three crowns and the bottle goes back. Ownership remains with the company that produced it in the first place. And they then clean and reuse it?
So at this point, it’s a concept that we have proposed. In theory it would work like this- the bottle would get returned to the retailer then go from the retailer to a facility, where all the bottles would get baled and sent for recycling. They would get re-granulated into PET flakes, which can be used for a variety of purposed. Our client’s idea is to use the material in the design of a new bottle. The ultimate goal is to collect up to 100% of product they are putting on the market and use as much of it as possible for designing new bottles, thus recycling the material again and again.

What do your economic models suggest? Will this come as a financial loss for the producers? Do they gain? Is three crowns per bottle enough? When it comes to money, how is it going to work?
There are many questions about economic implications… direct ones, indirect ones. First, the question of the deposit amount-is three crowns enough motivation for people to return. Evidence shows that 95% of glass bottles get returned. The deposit for them is three Czech crowns, so we assumed that the amount for plastic ones shouldn’t be significantly lower than that. There will definitely be some investment from producers involved at the start. They have to basically fund the whole system. In time, the system funds itself from the material collections and sales. Interestingly, it funds itself, up to around 30% from the amount of unredeemed deposits. The remainder, around 15%, of the whole system would be funded by the producer fee for every bottle they put on the market. They are already paying that today for putting one ton of the PET on the market.

As a chemist, I value the properties of these plastic bottles and I like the idea of projects which instill in people that there’s value to this bottle even after use. We can recycle that, thus reducing waste, helping the environment… however, this transition will have knock-on effects on other partners in the linear system. Plastic producers and current recycling projects will presumably be affected. So what happens to them?
There’s the disruption that we’ve been discussing. I don’t presume a big impact on primary plastic producers- demand for plastic will continue to grow exponentially, as it has been for the past few decades. The current system of waste management and recycling is a different story. Currently it relies heavily on PET. PET bottles are driving the separation and recycling of the content in yellow bins. If you eliminate that, there won’t be as much money to support the collection and recycling of the remaining plastics inside.  That’s really the first challenge that needs to be solved. We are afraid that municipalities will end up bearing these extra costs for yellow bin collection and content recycling, but we believe it should be the plastic producers. Plastic packaging should be designed in a way that renders its recycling and re-entry into the system valuable.

Guest: Vojtěch Vosecký

Vojtěch Vosecký graduated from Wageningen University in Holland, majoring in Urban Environmental Management with a focus on technology and business. At INCIEN, he has been on the board since the very beginning and has been involved in both strategic management and concrete projects, particularly in cooperation with the private sector.

Host: Michael Londesborough

Michael Londesborough received his Ph.D in chemistry from the University of Leeds. He is chairman of the Czech Academy of Science’s Institute of Inorganic Chemistry in Řež. He collaborates on popularization projects of the Czech Academy of Sciences, Czech Television and the National Technical Museum.

Watch the interview with Vojtěch Vosecký (26 min)


Source: Unipetrol's “Let’s Talk about It” project site.

The aim of this discussion platform is to highlight areas such as the circular economy, alternative fuels, recycling, responsible production and corporate social responsibility.

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