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Reimagining the circular economy

To restore environmental systems and create economic structures that allow people to prosper within them, we need to reimagine how we do things.

Evidence-based, purpose-led consulting solutions > Explore our insights
21 February 2023 | 1 min read
Kapil Kulkarni

Sustainability

Asia Pacific

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How circular economic principles can be adopted

Over the past couple of years, I’ve been working extensively with government and industry clients to evaluate how circular economic principles can be adopted at the local, state, and national level. What’s clear from this work is that the circular economy is a complex equation. Getting it right means achieving a balance between supply and demand.

In pursuit of the circular economy

For the circular economy to work, a number of drivers and actions must be operating in tandem. It’s about:

  • Designing products with less waste overall and greater ease of recycling

  • Diverting the waste that is created to new uses, and

  • Creating markets where the products of this diversion are valuable and in demand.

As an economist, I am particularly interested in the markets part. And this is where I think our focus is most needed. Based on our recent research into how specific materials transition through the Australian supply chain and waste system, here are a few key things we can look at to get our economy on a more circular trajectory.

Shredded plastic components in reprocessing facility

Capitalise on existing demand

Studies and our experience indicate that consumers, as well as business and government buyers, are willing to pay more for products made with recycled content. There is demand in the marketplace, but this is currently not well understood by the supply side, or not being completely tapped into.

By increasing our collective understanding of the market’s demand for utilising recycled content—both in packaging and in products themselves—Australia could stimulate greater demand and ultimately raise the value of diverted waste.

This could help close the gap between waste products that have the potential to be diverted from landfill, and those that are actually recovered and reprocessed.

plastic bottles recycling hub Cairns

Expand the horizons of reprocessing and end-use

When it comes to waste recovery and remanufacturing, the focus tends to be on reprocessing materials into products that are the same, or similar—think food-grade plastic drink bottles being recycled into post-consumer plastic bottles for washing liquid, for example.

That’s good, but we need to continually evaluate how we can avoid value loss in this process. When materials are degraded, eventually the recycling cycle stops. We need to explore the many other opportunities and potential pathways that exist to retain (or even increase) the value of recycled materials and create new high value materials from them—whether that’s as a similar product, or something entirely different.

Additional research and development (R&D) to expand both our remanufacturing capabilities and the types of end products we create will be vital to Australia’s circular economy transition.

Looking at opportunities in broader market activity could help to direct and drive this.

For example, as we emerge from COVID-19 and we are making huge investments in infrastructure, how can we ensure we are diverting waste into the raw materials stream for this? There are already plenty of examples of how our huge waste glass resource can be made into concrete, or end-of-life rubber and plastic waste transformed into road base. How can we expand local capabilities, so this is just standard practice?

E-waste is another growing market opportunity. Our client MobileMuster has been working to circularise the journey of e-waste for years and is doing great work to recover over 95% of materials including the high value elements of our phones including, gold, silver, palladium, platinum and copper, for reprocessing and reuse. The organisation is always working to recover more materials and opportunities for remanufacturing, with plastics from mobile phone casings and accessories now being recovered to create new products.

MobileMuster is putting this plastic resource to use in its own organisation, using it to manufacture MobileMuster collection units where consumers can drop off their used electronic goods. It’s a great example of the circular economy in action and the organisation is looking forward to rolling the new units out across its network later this year.

Expanding our thinking and building our capabilities has the potential for broader economic benefits too, as it can increase productivity and develop expertise that could be exported to other markets.

e-waste in a container ready to be recycled

Step up standardisation

Standardisation is a valuable mechanism in the journey towards circular economy, and it can add value at a number of points in the consumer and waste recovery lifecycle.

One example is the work that the Victorian Government is doing to transition to a standardised waste and recycling bin system for the entire state by 2030. Separating waste streams—green for organics, red for rubbish, purple for glass, and yellow for mixed recycling—may sound simple, but it’s actually an important step towards removing inefficiency in the recovery process by:

  • Minimising complex sorting and contamination, and the recovery losses that result

  • Encouraging positive contributions by the public in waste recovery and recycling (behavioural change)

  • Eliminating confusion and inefficiency through processes, systems and technologies that are the same across different local government areas.

Another great example is Scotland’s ‘Revolve’ program which aims to increase consumer confidence in the second-hand goods market via minimum standards for retailers.

A recognisable government accreditation, Revolve provides assurance to consumers about the quality and safety of second-hand products, which stimulates the market for such goods. People are more willing to buy (and to pay the right amount) because they have external confirmation that the products are worth the investment.

At the end of the day, most people just want to do the right thing (recycle, support local retailers, not damage the environment). Standardisation makes it easy for people to positively participate and can serve as an important driver of our circular economic wheels.

These are just three focus areas among many in the movement towards a more circular economy.

Designing waste out of products and processes is a huge part of the equation, and it’s exciting to see how industries are already rising to this challenge. We can look, for example, at how the community has embraced sustainable changes like the elimination of single use plastic shopping bags from our major supermarkets.

For many, World Environment Day will be an opportunity to think about, prioritise and advocate for the restoration of our natural world. I think the challenge for all of us is to think practically about how we can do this not just one day a year, but every day, across all aspects of our life—how we work, how we travel, how we shop.

If we capitalise on the demand that already exists for “waste” products, expand our reprocessing capabilities and use recovered materials, and encourage market participation and confidence through standardisation, we’ll be well on our way.