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Why is everyone talking about resource efficiency and the circular economy?

Date: 2/09/2014 | Author: Paul Sanderson

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Ahead of RWM, Resource Efficient Business and Prodware will be publishing an article every day on the Top Ten Drivers for Recycling Change.

We would like you to share your views on which of these 10 ideas you think will be the most significant drivers for recycling change. Come to the Prodware stand at RWM (4F106-G107) and show what you believe will be the key drivers on the 'Cool Wall' or tweet your Top 3 to @ProdwareUK and/or @ResourceEBnews using #TopRecycling
Today, we look at resource efficiency and the circular economy:


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You will probably have heard the terms resource efficiency and circular economy over the past couple of years.

And you might have dismissed them as the latest fad, thought a little bit about them or embraced the ideas as a revolution that is on its way to happening.

So why are these ideas one of our Top 10 Drivers for Recycling Change? It is because resource efficiency and the circular economy are starting to influence and generate both national and EU policy.

These ideas aren’t necessarily new, with people such as the Swiss architect Walter R. Stahel advocating extending the life of products through repair over disposal in the mid-1970s.

But with advocates such as the Ellen MacArthur Foundation (Ellen MacArthur pictured top left) and particularly European Environment Commissioner Janez Potočnik, the ideas of resource efficiency and the circular economy are gaining wider traction.

Indeed, speaking to the Parliamentary Environmental Audit Committee Growing a Circular Economy inquiry, Kingfisher (owner of brands such as B&Q) chief executive Sir Ian Cheshire warned that with raw material prices set to increase, those businesses that embrace both the circular economy and resource efficiency will be those that succeed.

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Ricardo-AEA practice director – resource efficiency and waste management Adam Read says there is so much interest in resource efficiency and the circular economy because it is a “no brainer”.

He adds: “Resource efficiency is about doing more with less, so in a world of austerity, increasing resource risks and rising fuel and raw material prices there is a clear need to be more efficient with our use of resources.

“The circular economy is a more recent development of the same agenda, recognising that putting materials back to productive loop in materials cycles and basing economic growth on recycling and remanufacturing not only addresses the same problems but can also drive employment and economic growth.

“We really do need these agendas to take hold, and with some Government encouragement, in particular in Scotland, and with increasing EU attention it is now getting traction. It is no longer just theory but a way of life for major brands like M&S, Walmart, Coca Cola, Kingfisher and others.”

But he warns that even though the difference between resource efficiency and the circular economy is relatively simple to understand, it isn’t always clear and the terms are thrown around interchangeably at times.

He adds: “Resource efficiency is about doing more/better with less. So light-weighting packaging is a great example from recent years, as is material substitution, replacing a resource at risk with potential price concerns with one that is more abundant.

“Resource efficiency makes sense to businesses of all scales as it can save them money in the immediate future, it addresses a rising price problem or improves their margins – so businesses buy into resource efficiency as it is about sustainability of their business and the profitability of their operation.

“Circular economy is a much bigger step. It does not flow naturally from resource efficiency and may even require a paradigm shift in how businesses think about their resources, processes, outputs and products.

“It is more revolution than evolution! For example, at the heart of the circular economy approach is reuse of materials and products, as well as new business models like leasing, where you lease the item for a short period of use and then return it to the owner (shop for example). This means the product is in more productive use more of the time and is maintained and repaired to extend its life. Beyond this we have the role of recycling in particular, the ability to take recyclable materials, capture it and then put it to good use in terms of remanufacturing as Coca Cola have done by investing in plastics sorting and reprocessing facilities.

“Both the circular economy and resource efficiency require better design, but resource efficiency might design for less material, lighter-weighting or ease of transportation to reduce travel costs, circular economy will design for deconstruction, reuse, recycling and remanufacture – a subtle but important difference.”

Adam Read believes that these concepts can and will become a key driver for change in the recycling industry, as the industry adapts to become more of a raw material supplier, using its logistics to become an integral part of the supply chain.

He adds: “It is going to drive the need for material to be collected, separated and reprocessed - sounds a lot like the modern waste management and recycling sector!

“Yes, it will bring challenges as products are redesigned, materials are substituted and new business models come to the fore, but I would not see them as an immediate threat.

“What is needed is good logistics, from consumers and businesses to remanufacturing. The waste and recycling sector is ideally placed to help source, produce and deliver clean feedstock to the facilities that need them.

“But it needs to be loud and proud. It needs the supply chain to sit up and take notice of these important players in materials movement and feedstock quality control and delivery.

“Ideally, people from the recycling industry need to get to the same events as designers to influence them, they must meet and discuss with big industry their raw material demands and look to see how they could help source the suitable materials and in the right locations.

“Ultimately, they need to shed their image of cheap and dirty landfill which is out of sight and out of mind, and convince other industrial sectors that they are effective, modern, bright and engaged resource managers looking to help close the loop. The waste sector is also key to helping the public engage fully with reuse models.”

So while these terms are being widely bandied about, if the concepts begin to become reality, there are real business opportunities to be had from being part of a resource efficiency and circular economy. 

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