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The Circular Economy - An Explainer

Introduction

There has been considerable concern in Australia in recent years about recycling efforts, and what happens to our products once they are recycled. This was brought into focus by China's decision to ban the import of foreign waste from January 2018.[footnote 1] Australia exports recyclable material to over 100 countries; the three main categories of which are metals, paper and cardboard, and plastics.[footnote 2] In 2016–17 Australia exported some 4.23 mega tonnes of recycled materials, a considerable amount of which went to China.[footnote 3] Therefore, the decision made by China to ban the import of foreign waste has a direct impact on recycling and waste management practices in Australia.

One idea put forward in response to the issue of recycling and waste management is of the transition to a circular economy. Essentially, the objective of a circular economy is to maximise value at each point in a product's life.[footnote 4] A circular economy seeks to close industrial loops and to turn outputs from one manufacturer into inputs for another and, in doing so, reduce the consumption of virgin materials and the generation of waste.[footnote 5]

In June 2018, the Senate Environment and Communications References Committee published its report on the waste and recycling industry in Australia. The first recommendation made by the Committee was that the Australian Government establish a circular economy.[footnote 6]

The report stated:

The committee is of the view that the Australian Government must act urgently to transition away from a linear economy to a circular economy which prioritises the collection, recovery and re-use of products, including within Australia. This transition must include a suite of regulatory and policy changes aimed at influencing behaviour, as well as investments in infrastructure and technology.[footnote 7]

The Victorian Government has also recently signalled its support for the creation of a circular economy,[footnote 8] as have the Governments of South Australia and New South Wales.[footnote 9]

So what is the circular economy, exactly? This explainer provides an overview of the circular economy concept, what it looks like and why it's being talked about. It also discusses recent research and developments in the circular economy space, and some of the challenges that may arise in its implementation. Additionally, it includes a number of examples from other jurisdictions where circular initiatives are being realised, and considers developments taking place in Australia.



1. What is the circular economy?

In Australia, our use of resources generally exists in what can be called a linear economy, where we take resources to make into products that we then use, and dispose of. This process is depicted in Figure 1.

Figure 1: Linear Economy

Source: C. Lambert, Delegation of the EU to Australia (2018) The EU Circular Economy vision: a powerful force for climate action, presentation at Australian National University, 10 July, p. 6.

The circular economy is an alternative to the traditional linear model, where the goal is to 'keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life'.[footnote 10]

In other words, a circular economy seeks to eliminate waste and to keep resources in a continually flowing loop, as depicted in Figure 2.

Figure 2: Circular Economy

Source: Waste and Resources Action Programme (WRAP) (2018) 'WRAP and the circular economy', WRAP website.

2. How does it work?

Some of the essential elements necessary for a circular economy are to:

§ design and manufacture products that are made from recycled materials (rather than virgin resources), that can be repaired and/or recycled back into the system;

§ establish repair centres as part of this design and manufacture process, so that items can be repaired;

§ establish collection systems so that items unable to be repaired are collected, rather than disposed of in landfill;

§ ensure that there is adequate and appropriate recycling facility infrastructure in place, taking into account location and sorting capacity; and

§ encourage manufacturers to purchase recycled materials, thereby closing the production loop.[footnote 11]

One example of the circular economy in action is certain forms of metal recycling. Metal is mined, refined, made into a product, used, disposed of via recycling and then a new product is made out of it—the metal keeps going around. Contrastingly, with many items in the linear economy—such as a plastic container, for example—oil is mined, refined and then made into a plastic item and, while some of the product is recycled, much is disposed of in landfill where the resource is never used again.[footnote 12]

The Ellen MacArthur Foundation, which has as its mission to accelerate the transition to a circular economy, argues that the circular model relies on system-wide innovation and builds economic, natural and social capital.[footnote 13] Further, the circular economy model is driven by renewable resources, rather than finite ones. In practice, this means that a circular economy depends on renewable energy, such as wind, solar and bioenergy, rather than coal and other finite fossil fuels.[footnote 14]

There are two primary business models under the circular economy: those that foster reuse and extend the life of a product through repair, remanufacture, upgrades and retrofits; and those that turn old goods at the end of their service life into as-new resources by recycling the materials they contain.[footnote 15]

The circular economy cycle can be further broken down into two distinct processes—one for biological materials and the other for technical materials, with a continuous flow of materials through the cycle.[footnote 16] This distinction is depicted in the circular economy system diagram (Figure 3, overleaf).





Figure 3: Circular Economy System Diagram

Source: Ellen MacArthur Foundation (date unknown) '<href="#circular-economy-general-resources-map key-for-general-resources-map="" systems-map"="">Systems Map', Ellen MacArthur Foundation website



3. Why are people talking about it?

So why are people talking about the circular economy?

Too much waste is being produced

One reason is that the industrial and technological revolutions have meant that the speed at which items are produced has changed. For example, between 1860 and 1920, production in the United States increased 12–14 times, whereas the population only tripled.[footnote 17] The outcome of producing items at an increasing rate in the current linear model is that a growing amount of waste is also being produced. And, in Australia, the waste we produce is growing at double the rate of our population—with 52 mega tonnes generated each year.[footnote 18]

The Organisation for Economic Co-operation and Development's (OECD) most recent Environment at a Glance publication indicated that Australia was ranked fifth of all OECD countries for generating the most municipal waste per capita (Figure 4).[footnote 19] The OECD defines municipal waste as waste collected by, or on behalf of, municipalities and includes 'household waste originating from households (i.e. waste generated by the domestic activity of households) and similar waste from small commercial activities, office buildings, institutions such as schools and government buildings, and small businesses that treat or dispose of waste at the same facilities used for municipally collected waste'.[footnote 20]

Figure 4: Municipal waste generation intensities in OECD countries by kilograms per capita, 2013

Source: OECD (2018) Environment at a glance 2015: OECD indicators, Paris, OECD, pp. 48–49.

Although about half the waste we generate in Australia is being recycled, the continued growth in economic output has meant that the volume of waste going into landfill is actually on the rise.[footnote 21] Compounding this effect is the fact that there are an increasing number of people on the planet, and that consumer affluence is also growing. Researchers have highlighted that three billion new middle-class consumers are set to enter the global market in the next 15 years, meaning that the throw-away culture in the current linear economy can only get worse if the model remains unchanged.[footnote 22]

Resources are finite

Another reason people are talking about the circular economy is that the world is experiencing a period of severe natural resource depletion.[footnote 23] This means that the linear economy model is inherently unsustainable, as finite resources are taken, used, then lost forever. The challenge of resource depletion asks that resources are conceived of differently. As one academic has noted, 'concerns over resource security, ethics and safety as well as greenhouse-gas reductions are shifting our approach to seeing materials as assets to be preserved, rather than continually consumed'.[footnote 24] The circular economy seeks to address these resource losses, and presents a more 'restorative' process, where materials and components can be reused many times over.[footnote 25] For this reason, some researchers have argued that the only solution to the world's resource-security problem is to move away from the linear economy and to embrace the circular economy.[footnote 26]

Potential for economic benefit

Advocates of the circular model have highlighted that there is also a considerable economic argument in favour of a transition to a circular economy. A study by the Ellen MacArthur Foundation found that a transition scenario in the European Union would generate annual net material cost savings of up to USD 380 billion, and up to USD 630 billion in an advanced transition scenario.[footnote 27] This was the case when considering a subset of EU manufacturing sectors only, meaning that an economy-wide transition could theoretically produce greater savings. Further, in Canada, the Circular Economy Leadership Coalition has noted that current circular economy practices will lead to upwards of USD 4.5 trillion in economic activity by 2030, through innovation, job creation and resource shortage mitigation.[footnote 28] As some academics have noted, 'recycled, regenerated and locally sourced raw materials are usually cheaper'.[footnote 29]

Closer to home, it's been argued that the transition to a circular economy—with the increased recycling such a transition would entail—could lead to greater employment in Australia. For example, in a submission to the Senate inquiry into the waste and recycling industry, the Waste Management Association of Australia stated that 'for every 10,000 tonnes of waste recycled, 9.2 jobs are created'.[footnote 30] South Australian data has also revealed that some 25,000 jobs would be created over five years if waste was recycled and reused, rather than dumped or exported.[footnote 31]



4. Research and developments

Significant research on the circular economy has been undertaken in recent years, and a number of publications have sought to understand what a transition to a fully circular economy could look like. For example, in 2012 Chatham House, the Royal Institute of International Affairs, produced a briefing paper on the circular economy, arguing that a 'fundamentally new model of industrial organization is needed to de-link rising prosperity from resource consumption growth – one that goes beyond incremental efficiency gains to deliver transformative change'.[footnote 32]

In 2013, the Ellen MacArthur Foundation produced the first economic report examining the potential of the circular economy model.[footnote 33] The report, which was launched at the World Economic Forum (WEF), highlighted the limits of the linear economy model, looked at the benefits that a circular model could provide, and laid out a roadmap for an accelerated transition towards a circular economy. Similarly, in 2014, the WEF launched a report entitled Towards the Circular Economy: Accelerating the scale-up across global supply chains. This report aimed to reconcile the concept of scaling a circular economy within the reality of a global economy and its complex, multi-tier supply chains.[footnote 34] The Senior Director at the WEF concluded that 'the economic case for shifting to a circular economy is compelling'.[footnote 35]

In 2015, the European Commission launched its Circular Economy Package (CEP), with the aim of boosting competitiveness, creating jobs and generating sustainable growth.[footnote 36] The CEP includes revised legislative proposals on waste, as well as an Action Plan that sets out measures to address the phases in the lifecycle of a product—including production, consumption, waste management and the market for secondary raw materials—with the aim of 'closing the loop'.[footnote 37] The package was ratified in May 2018 by the EU Council, and the legislation came into effect in July 2018.[footnote 38]

Also, in March 2016, the multidisciplinary scientific journal, Nature, produced a special issue on the circular economy.[footnote 39] One of the feature articles asserted that a circular economy would 'change economic logic', as it 'replaces production with sufficiency: reuse what you can, recycle what cannot be reused, repair what is broken, remanufacture what cannot be repaired'.[footnote 40] Similarly, in 2017, the interdisciplinary Journal of Industrial Ecology also produced a special issue exploring the circular economy, noting that the circular economy concept had gained traction across a number of domains.[footnote 41]

Further, the OECD has started the RE-CIRCLE project for member countries, providing policy guidance on resource efficiency and the transition to a circular economy.[footnote 42] And in 2017, BSI, the national standards body in the United Kingdom, launched a new standard for the circular economy that provides guidance and recommendations to assist organisations wishing to put circular economy theory into practice.[footnote 43] This standard is the first of its kind, both in the UK and globally.[footnote 44]



5. Challenges

Transitioning to a circular economy would present a number of challenges. Firstly, some researchers have expressed concern that the discussion around any transition has focused primarily on economic factors, without grappling with the institutional and social dimensions necessary for societal transitions to a circular economy.[footnote 45] They argue that questions relating to labour conditions, wealth distribution and governance systems remain to be addressed.[footnote 46] On the other hand, an environmental charity in the United Kingdom has argued that a circular economy is actually good for people when the right policy is in place, as it can cut unemployment and save people money.[footnote 47]

Secondly, some researchers have questioned whether or not the circular economy, with its aim of closing material and product loops, would even decrease primary production at all. In fact, they argue, circular economy activities can actually increase overall production, thereby partially or fully offsetting the benefits that a circular economy seeks to provide.[footnote 48] They term this effect the 'circular economy rebound', and explain that this occurs 'when circular economy activities, which have lower per‐unit‐production impacts, also cause increased levels of production, reducing their benefit'.[footnote 49] In terms of the coordination between industries that would be required for a transition to a circular economy, there is an added complication in that they are often regulated in very different ways. For example, the waste management sector is regulated in a different way to the water and energy sectors and contains a mixture of public and privately-owned entities, which further complicates the ability to have a coordinated transition to a circular economy.

Thirdly, another concern relates to the potential difficulty in getting companies at different points on the supply chain to collaborate on a transition. For example, while the final product may be produced by a company that has implemented a transition to a circular economy, parts manufacturers along the supply chain may not have done so. Further, while products may be manufactured in one location, they may contain components from different jurisdictions. Researchers have noted that a primary obstacle is 'getting firms linked by supply chains to cooperate in turning outputs into inputs'.[footnote 50] Although the term 'transition' implies that companies will ultimately move at their own pace, if the aim is to reduce waste and use of virgin resources then the argument made by advocates of the circular economy is that the more companies that transition sooner, the better.

Additionally, another challenge that the circular economy poses relates to human behaviour—specifically, the connection we may have to our possessions, and our preferences for whether they are new or used. Bruce Hood, professor of developmental psychology, has argued that our psychological bias to value exclusivity (a perceived 'luxury' item) and authenticity (whether an item is 'real' or reproduced/fake) actually undermines the principles of recycling and reuse.[footnote 51] Hood argues that this 'essentialism' poses 'a formidable obstacle to accepting—as we must—that all materials can and should be reused or recycled. To realize a circular economy—in which resources are kept in use for as long as possible—the perceived status and value of reused materials must be changed'.[footnote 52]

Potential solutions

Several ideas have been put forward to manage the transition to a circular economy and to address challenges such as those discussed above. For example, some researchers have argued that better circular economy metrics need to be developed, and suggest that the OECD draw up reporting guidelines for countries to follow.[footnote 53] Others have advocated for the development of a typology for design for product integrity, which includes guiding principles, design strategies and methods, to ensure the integrity of a product—the ultimate goal of which is 'to minimize and ideally eliminate environmental costs by preserving or restoring the product's added economic value over time'.[footnote 54] Others still have suggested that when more recycled material has been used in an object, the more this should be advertised—and rewarded with relevant tax breaks and other market levers.[footnote 55] This could mean that manufactured goods be required to indicate the extent of their recycled content, for both the product and its packaging.[footnote 56]

To make the transition easier for manufacturers and consumers, one researcher has advocated for the creation of commercial markets and collection points, so that discarded garments, bottles, furniture, computer equipment and building components can be collected and either repurposed or recycled.[footnote 57] Stahel explains the process in that '[footnote g]oods that can be reused may be cleaned and re-marketed; recyclables are dismantled and the parts are classified according to their residual value. Worn parts are sold for remanufacturing, broken ones for recycling'.[footnote 58]

In relation to the possibilities of collaboration and cooperation along the supply chain, two researchers provide the example of China and its industrial parks, where waste from one manufacturer can be used as an input for another manufacturer. China has an advantage in that more than 50 per cent of its manufacturing activities are conducted in industrial parks and export processing zones, meaning that targeting these parks for supply-chain waste management has been very effective and is beginning to reduce the intensity of the country's resource use.[footnote 59] However, some industries are arguably more suited to circular economies than others—for example, the recirculation of scrap metal is apparently straightforward, whereas other recycling practices are not.[footnote 60]

Additionally, in terms of the potential psychological changes needed, Hood argues that humans need to shift from valuing objects on the basis of their exclusivity, to a valuation that prioritises historical reuse. This could be achieved, he asserts, through policy measures that encourage non-consumption, through innovation, and through stringent product labelling.[footnote 61] Hood maintains that this would assist a societal transition away from the appeal of the 'brand new' to the 'brand renewed'.[footnote 62]

6. Circular economy initiatives around the world

This section provides a brief insight into some of the circular economy initiatives occurring in selected overseas jurisdictions, and also includes some examples of initiatives in Australia.

Canada

The Government of Canada has a policy position on moving towards zero plastic waste. In implementing this initiative, the government has stated its intention to create a more circular economy and is working with international and domestic partners to make it a reality—specifically, through improving how plastics are made, used and recycled, and through preventing their release into the environment.[footnote 63] In 2017, the Canadian Government's Policy Horizons unit published a policy paper on how the development of a circular economy may be facilitated by the Internet of Things, with a potential transition to a circular economy hastening the shift towards a 'more sustainable economic paradigm'.[footnote 64]

Other circular economy initiatives that are occurring within Canada include the Circular Economy Lab—launched in 2016 by a non-profit organisation in the sustainability sector—which has as its mission to 'accelerate the transition to a low-carbon, circular economy in Canada and beyond';[footnote 65] and the National Zero Waste Council, which has identified the circular economy as one of its areas of focus.[footnote 66] Similarly, the country's Waste Reduction Week initiative, held in October 2018, has also identified the circular economy as one of its key priorities—the Recycling Council of Ontario, which coordinates the event, has indicated that each of the themes discussed during the week will be 'presented through the lens of its contribution to advancing a Circular Economy'.[footnote 67]

A new organisation, called the Circular Economy Leadership Coalition, was formally launched in September 2018.[footnote 68]

China

China has also implemented a range of initiatives to assist in its transition to a circular economy. For example, in 2005, China's State Council published a policy paper acknowledging the environmental and economic risks of the country's heavy resource exploitation, and identified the circular economy as the principal means to deal with these risks.[footnote 69] Also, in the country's eleventh Five-Year Plan (for the period 2006–2010), a whole chapter was dedicated to the circular economy; and, in its twelfth Five-Year Plan (for 2011–2015), the circular economy was upgraded to a national development strategy.[footnote 70]

In 2012, the finance ministry and the National Development and Reform Commission (NDRC) called for 50 per cent of the country's industrial parks to implement circular-economy transformation initiatives by 2015, with an aim of reaching close to zero discharge of pollutants.[footnote 71] In 2013, the State Council released a national strategy for achieving a circular economy—said to be the world's first such strategy.[footnote 72]

A practical example of how the circular economy is being implemented in the country is the Suzhou New District, near Shanghai. The District is a 52-square kilometre region for technological and industrial development, and counts some 4,000 manufacturing firms that operate there. Waste from some regions in the park is used as an input for other manufacturers—for example, instead of using virgin copper, manufacturers of printed circuit boards are using copper that is recovered as a waste product of other manufacturers on site.[footnote 73]

Denmark

There has been considerable research into the implementation of a circular economy in Denmark. For example, in November 2015, the Ellen MacArthur Foundation published a case study looking at Denmark's potential for a circular economy.[footnote 74] In 2016, a non-profit, public-private partnership called State of Green published a circular economy white paper, which had the purpose of 'contributing to the common understanding of the concept of the circular economy and, through practical examples, illustrating how Danish companies are providing solutions that help progress the transition towards a circular economy'.[footnote 75] In June 2017, the Danish government's Advisory Board for Circular Economy delivered 27 recommendations for specific efforts Denmark can make to promote the transition to a circular economy;[footnote 76] the recommendations were grouped under four general themes: the circular value chain; design and production; consumption; and recycling.[footnote 77]

A practical example of a circular initiative already in place in Denmark is the Danish town of Kalundborg. Kalundborg hosts the Kalundborg Symbiosis, an eco-industrial park that has been in operation since 1972 and is advertised as the world's first industrial symbiosis following the circular approach.[footnote 78] The Symbiosis is currently a partnership between nine public and private companies, who share energy, water, materials and waste recycling processes.[footnote 79]

An example of a private-led initiative in Denmark is the LEGO Group, which has announced its intention to use 100 per cent sustainable materials in its packaging by 2025, in order to divert all packaging from landfill.[footnote 80] The company is also seeking to eliminate its use of petroleum-based plastics and to instead build its products from plant-based or recycled materials, by 2030.[footnote 81]

European Union

As mentioned earlier, the European Commission launched its Circular Economy Package in 2015, which was ratified in May 2018 by the EU Council and came into legislative effect in July 2018.[footnote 82] The CEP includes an EU Action Plan for the Circular Economy, which establishes 'a concrete and ambitious programme of action', and contains measures covering the whole life cycle of a product—such as production, consumption and waste management.[footnote 83]

In January 2018, the Commission adopted a new set of measures as part of its 'continuous effort to transform Europe's economy into a more sustainable one and to implement the ambitious Circular Economy Action Plan'.[footnote 84] One such measure is the EU Strategy for Plastics in the Circular Economy, which seeks to transform the way plastics and plastic products are designed, produced, used and recycled, with the aim that all plastics packaging be recyclable by 2030.[footnote 85] Another measure involves a Monitoring Framework on progress towards the circular economy at the EU and national level. The Framework comprises ten key indicators that relate to the various stages in the process—including production and consumption, waste management, and secondary raw materials, as well as competitiveness and innovation—and is intended to be a tool by which to assess the effectiveness of circular economy initiatives that have been put in place in the EU.[footnote 86]

Additionally, since the adoption of its CEP, the Commission has revised its legislative proposals on waste to set clear targets for waste reduction and to 'establish an ambitious and credible long-term path for waste management and recycling'.[footnote 87] Key elements of the revised waste proposal include the implementation by 2030 of a common EU target for recycling 65 per cent of municipal waste and 75 per cent of packaging waste, as well as a binding target to reduce landfill to a maximum of ten per cent of municipal waste.[footnote 88] The EU has also established, as part of its Europe 2020 strategy, resource-related policy goals that extend as far ahead as 2050 and, in many cases, these goals are guided by relevant targets and indicators to track implementation.[footnote 89]

Finland

The Finnish Innovation Fund, Sitra, was gifted by the Finnish Parliament to Finland on the country's 50th anniversary. Sitra's operations are funded by returns from an endowment originally granted by the Parliament, and the Fund reports directly to the Parliament.[footnote 90] Sitra's stated task is 'to build a successful Finland for tomorrow'.[footnote 91] In recent years, the fund has focused an extensive amount of work on the circular economy and, in 2018, Sitra was awarded the WEF Award for Circular Economy in the Public Sector.[footnote 92] The Fund's director stated that its 'future-oriented work aims at making Finland succeed as a pioneer of sustainable well-being. We strongly believe that the next era of well-being should be based on a fair and competitive circular economy'.[footnote 93]

In 2016, Sitra produced the world's first roadmap to a circular economy, to help implement the Finnish government's target to make Finland a global leader in the circular economy by 2025.[footnote 94] The roadmap proposes a number of actions categorised into three levels—policy actions, key projects, and pilots.[footnote 95] It also identifies five target areas to promote the growth of a circular economy, including: a sustainable food system; forest-based loops; technical loops; transport and logistics; and common action (Figure 5).[footnote 96] In October 2018, the Fund will co-host the World Circular Economy Forum 2018 with the Ministry of Environment of Japan, with the event to take place in Yokohama.[footnote 97]

Another initiative in Finland is seen in the non-profit Helsinki Metropolitan Smart & Clean Foundation, which seeks to make the metropolitan area and municipality of Lahti 'the world's best test bed for smart and clean solutions by 2021'.[footnote 98] According to the Foundation's website, the core of its work is to gather initiatives to address climate change and to advance the circular economy. It does this through interaction with cities, government, companies, and research and education institutions.[footnote 99] All actions undertaken by the Foundation are guided by a clear set of criteria, which stipulate that actions must improve citizens' quality of life, decrease emissions and utilise resources efficiently.[footnote 100] One example of an action by the Foundation is to have all buses, work machines and city trucks switch to 100 per cent waste-based biofuels by 2020.[footnote 101]



Figure 5: Circular Economy Roadmap Infographic, Finland

Source:Sitra (date unknown) 'This is how we create a circular economy in Finland', Sitra website.

France

In October 2017, the French Government announced its intention to create a roadmap for the circular economy, with the aim of reducing the amount of waste going to landfill by half and recycling 100 per cent of plastics, by 2025.[footnote 102] The roadmap was launched by the Prime Minister in April 2018 and contained 50 measures to assist in the transition to a circular economy, relating to the key theme areas of production, consumption, waste and community action/engagement.[footnote 103]

Examples of some existing circular initiatives in France include the Textiles Recycling Valley in Northern France, which seeks to sort/capture 50 per cent of waste fabric and reuse/recycle 95 per cent of it, by 2019;[footnote 104] and the Renault factory in Choisy-le-Roi, which remanufactures automotive parts and sends no waste to landfill.[footnote 105]

Germany

Germany has a comprehensive plan for recycling in place, as per its Act for Promoting Closed Substance Cycle Waste Management and Ensuring Environmentally Compatible Waste Disposal, which came into force in 1996.[footnote 106] The country has also had the German Resource Efficiency Programme (ProgRess) in place since February 2012, making it one of the first countries to put measures in place for the protection of natural resources.[footnote 107]

In conjunction with ProgRess, the German government submits a progress report on the development of resource efficiency in Germany every four years, and updates the programme accordingly.[footnote 108] In November 2016, an updated report was released, and was based upon the same four guiding principles as the first report in 2012—one of which is 'making economic and production activities in Germany depend less and less on primary resources, and developing and expanding the circular economy'.[footnote 109]

Examples of circular initiatives in Germany include Circular Economy Solutions GmbH, a company that specialises in closing the loop for automotive parts, and the sustainable model district of Vauban.[footnote 110]

Japan

In response to its scarcity of natural resources, Japan has actively taken steps to implement more sustainable practices and to transition to a circular economy. According to the WEF, this transition has followed a three-pronged approach involving structural adjustments, legislation, and societal participation.[footnote 111] This three-pronged approach has proven very successful in Japan. For example, the country's recycling rate for metal is 98 per cent, and is also high for other materials.[footnote 112] The majority of electronic appliances and electrical products are recycled, and up to 89 per cent of the materials they contain are recovered—most of which are used to make the same type of products.[footnote 113] In 2007, only 5 per cent of Japan's waste went into landfill.[footnote 114]

While a range of policies and laws implemented in the country since the 1970s have advanced the circular economy, there has been a significant amount of legislative progress since 2000.[footnote 115] For example, the Law for the Promotion of Efficient Utilization of Resources was ratified in 2000 and sought to minimise producer and consumer waste. It was described as 'epoch-making and unprecedented in the world' and covered the entire lifespan of a product from upstream to downstream.[footnote 116]

An example of a circular initiative in Japan is being implemented by the Nissan car company, which has joined with another company to take used batteries from one of their electric car models and reuse them to store the electricity created by solar panels built on a disused landfill site.[footnote 117] The facility can produce up to ten megawatts of electricity, which can then be either fed into the power grid, or stored in banks of used batteries from electric vehicles.[footnote 118]

Japan's Ministry of Environment is co-hosting the World Circular Economy Forum 2018 with the Finnish Innovation Fund, Sitra.

The Netherlands

In September 2016, the Government of the Netherlands launched its government-wide Programme for a Circular Economy, to be achieved by 2050.[footnote 119] In a letter to the Dutch parliament announcing the programme, the Minister for the Environment and the Minister of Economic Affairs stated that the programme outlines 'a vision of a future-proof, sustainable economy and a liveable earth for future generations'.[footnote 120] The Programme identifies five priority areas for the transition to a circular economy: biomass and food; plastics; the manufacturing industry; the construction sector; and consumer goods.[footnote 121]

One of the interim measures mentioned in the Ministers' letter is to reduce the use of primary raw materials by 50 per cent, by 2030.[footnote 122] Three strategic objectives are identified to assist in achieving this goal, including: that raw materials in existing supply chains be used in a high-quality manner (to reduce the need for raw materials in future); that new fossil fuel-based raw materials be replaced by sustainable and renewable materials, wherever possible; and that new production methods be developed, new products designed, and relevant sectors restructured.[footnote 123]

A private-sector circular economy initiative in the Netherlands can be seen in the fashion company, G-Star RAW. In 2016, the company joined with Circle Economy, an Amsterdam-based social enterprise specialising in circularity, to collaborate on creating a closed loop in textiles manufacturing.[footnote 124] G-Star RAW has since produced a denim fabric that is 98 per cent recyclable—and recycles all water used in its manufacture—and is the first denim in the world to receive Gold Certification from the Cradle to Cradle Products Innovation Institute.[footnote 125]

New Zealand

The Government of New Zealand's Ministry for the Environment administers the Waste Minimisation Fund, which aims to fund projects that promote or achieve a reduction in waste.[footnote 126] In 2018, the Fund requested applications for projects that focused specifically on accelerating the country's transition to a circular economy.[footnote 127] The government has also stated its intention of working with key sectors to develop and adopt circular economy principles, and has set up a taskforce to work with local government and the waste and resource efficiency sector.[footnote 128]

In 2017, the country's Sustainable Business Network partnered with Auckland Council, among others, to create the Circular Economy Accelerator, an organisation which has as its vision to make New Zealand an exemplar circular economy nation.[footnote 129] In 2018, New Zealand's first-ever Circular Economy Summit was organised by the Sustainable Business Network and WasteMINZ, the largest representative body of the waste, resource recovery and contaminated land sectors in New Zealand.[footnote 130] The Summit's aim was to 'set a course for New Zealand's transition to a world-leading circular economy'.[footnote 131]

A private-sector example of a circular initiative in New Zealand comes from Wishbone Design Studio, which has developed a children's balance bike that is made from 100 per cent post-consumer recycled carpet and is stated to be the world's first bicycle made from 100 per cent recycled material.[footnote 132]

United Kingdom

In December 2015, the London Waste and Recycling Board (LWARB) released a report into the circular economy that set out the context and opportunities for transition to a circular economy in London.[footnote 133] The report aimed to inform the city's policy development, raise awareness about the circular economy in the public and private sectors, and engage stakeholders keen to work with LWARB.[footnote 134] It identified five focus areas: built environment, food, textiles, electricals, and plastics.[footnote 135]

In June 2017, LWARB then launched its Circular Economy Route Map, which had the aim of accelerating London's transition to a circular city.[footnote 136] The route map set out eight cross-cutting themes as being central to creating the right conditions for a circular economy to flourish in London. These are: communications; collaboration; policy; procurement and market development; finance; business support; demonstration; and innovation.[footnote 137] For each of the themes, the route map put forward recommendations to assist the city's transition. For example, under the theme of collaboration, it was recommended that a working group be established to provide insight into developing the market for re-used and reclaimed materials in London.[footnote 138]

In 2016, the Scottish Government produced a report on a circular economy strategy for Scotland. The strategy identified four priority areas, including: food and drink, and the broader bio-economy; remanufacture; construction and the built environment; and energy infrastructure.[footnote 139] It also included a food waste reduction target, to cut food waste by one third by 2025.[footnote 140] Also, the Glasgow Chamber of Commerce has partnered with Glasgow City Council, Zero Waste Scotland, the University of Strathclyde and Circle Economy to produce Circular Glasgow. Funded by the European Regional Development Fund, Circular Glasgow is described as 'a movement to inspire businesses of all sizes to innovate and become future-proof by adopting circular strategies'.[footnote 141]

Other initiatives in the United Kingdom include the Waste and Resources Action Programme, a registered charity that works with governments, businesses and communities to promote the sustainable use of resources. It focuses on three priority sectors—food and drink, clothing and textiles, and electricals and electronics—and has a strong focus on the circular economy.[footnote 142]

The University of Exeter's business school has also recently launched its Centre for Circular Economy.[footnote 143]

United States of America

In the USA, the US Chamber of Commerce Foundation convenes a yearly Sustainability and Circular Economy Summit.[footnote 144] Its Corporate Citizenship Center also convenes a Sustainability and Circular Economy Program for companies.[footnote 145] In terms of circular initiatives, a number of US cities have implemented programs to reduce waste. For example, the City of San Francisco has implemented a zero-waste initiative, with the intention of diverting all waste from landfill or high-temperature destruction by 2020.[footnote 146] To achieve this, products are to be designed and used according to the following waste reduction hierarchy: prevent waste; reduce and reuse; recycle and compost.[footnote 147] In 2012, San Francisco diverted nearly 80 per cent of its waste from landfill—the highest rate of any major US city.[footnote 148] Other cities implementing zero-waste initiatives include Seattle and Austin, among others.[footnote 149]

A practical example of a circular initiative in the USA is The Plant, a building in Chicago that hosts a collaborative community of food businesses that are all focused on growing, producing and/or sourcing a variety of food products. It has been described as a 'net-zero, closed loop urban system for food production, energy conservation and material use'.[footnote 150] Essentially, The Plant—founded on a model of closing waste, resource, and energy loops—seeks to be a working example of what sustainable food production and economic development looks like.[footnote 151] The building also plays host to Plant Chicago, an educational non-profit that seeks to cultivate local circular economies and provides community-driven, hands-on programs and tech demonstration projects at the premises.[footnote 152]

Initiatives in Australia

There are a number of initiatives taking place in Australia that rethink the ways in which waste and recycling practices operate. Some brief examples are outlined below.

City of Melbourne, Victoria

In 2013, the City of Melbourne launched the Degraves Street Recycling Facility, with the aim of changing the waste and amenity culture in the café precinct and providing for food waste, cardboard and commingled recycling.[footnote 153] Key achievements of the program include a resource recovery rate of nearly 67 per cent and a combined total of 392 tonnes of recycling diverted from landfill.[footnote 154] Local parks and gardens were also supplied with a compost-like soil conditioner made from food waste processed by the facility's food dehydrator.[footnote 155] The Degraves Street Recycling Facility is one of ten initiatives identified in the city's Waste and Resource Recovery Plan 2015–18, the objectives of which are to increase resource recovery, reduce waste to landfill, and improve local amenity.[footnote 156]

Government of South Australia

In 2017, the Government of SA commissioned a report into the potential benefits of a circular economy in South Australia.[footnote 157] This endeavour made South Australia the first jurisdiction in Australia to quantify the benefits of a circular economy.[footnote 158] The report found that, compared to a 'business as usual' scenario, implementing a more circular economy in South Australia by 2030 would create an additional 25,700 full-time-equivalent jobs and would reduce the state's greenhouse gas emissions by 27 per cent.[footnote 159]

In June 2018, South Australia hosted a global leadership program on the circular economy [footnote 160]

James Cook University, Queensland

James Cook University (JCU) has become the first university in Australia to implement an innovative food waste disposal system, known as the Bio-Regen, which takes food waste and converts it into a liquid bio-fertiliser.[footnote 161] The system is processing up to a tonne of food waste from JCU's commercial kitchens each week, and the resultant high-value fertiliser is being sold to Asian farmers.[footnote 162] This practice not only keeps food waste out of landfill, but also demonstrates a way in which the food production loop can be closed.

Kwinana, Western Australia

Construction is currently underway on a new waste-to-energy facility in the city of Kwinana. The facility will be the first of its kind in Australia and will be able to process some 400,000 tonnes of waste per year, which is expected to generate around 40MW of energy.[footnote 163] When completed, the facility is expected to divert up to half of the residential, post-recycling rubbish collection in the Perth metropolitan area from landfill.[footnote 164]

New South Wales Government

In March 2018, the NSW Legislative Council Committee on Planning and Environment released its final report into 'Energy from waste' technology. Recommendation 35 of the report was that the NSW Environment Protection Authority 'investigate opportunities to embed zero waste strategies and the circular economy in New South Wales'.[footnote 165] In its response to that recommendation, the NSW Government stated its commitment to developing a NSW-specific circular economy policy, and to supporting the development of a circular economy policy at the national level.[footnote 166]

In October 2018, the NSW Government launched its draft Circular Economy Policy.[footnote 167] The Policy Statement sets out the circular economy principles that the Government will adopt and also defines the role that the Government will play in implementing them. The principles are to:

§ minimise consumption of finite resources;

§ decouple economic growth from resource consumption;

§ design out waste and pollution;

§ keep products and materials in use;

§ innovate in resource efficiency, give preference to higher order re-use and repair opportunities; and

§ create new circular economy jobs.[footnote 168]

The Policy Statement commits New South Wales to embedding these principles in the state's public and private sector decision-making by 2025.[footnote 169] A Discussion Paper was also released and proposes the Government's next steps and priority focus areas.[footnote 170] A consultation period on the draft Circular Economy Policy has since begun.[footnote 171]

Simply Cups

Simply Cups is Australia's first coffee cup recycling program. Created in the UK in 2014, Simply Cups came to Australia in 2016 and recycles and upcycles takeaway cups into recycled, and recyclable products—effectively, creating a circular economy.[footnote 172] Through the recycling process, takeaway cups are combined with other plastic materials that would otherwise go to landfill to create a resin suitable to be upcycled into new products, such as bench seats, kerbing and car stops.[footnote 173] The company also produces a reusable cup made from recycled coffee cups.[footnote 174]

Sustainability Victoria

In 2018, Sustainability Victoria released its updated Statewide Waste and Resource Recovery Infrastructure Plan. First published in 2015, the Plan provides 'a long-term vision and roadmap to guide future planning for waste and resource recovery infrastructure in the state'.[footnote 175] In the Plan's foreword, the Minister for Energy, Environment and Climate Change stated that '[footnote i]ncreasing the recovery of waste will not only protect our environment, it builds an economy that is circular – one that maximises the productive use and reuse of valuable resources'.[footnote 176]

Sustainability Victoria also administers the Resource Recovery Infrastructure Fund, which provides grants for infrastructure for collection, sorting or processing. Fourteen projects were announced in 2017 and between them are expected to recover 90,000 tonnes of plastics, 2,100 tonnes of food organics, 1,000 tonnes of end-of-life tyres and 100,000 tonnes of timber—diverting some 350,000 tonnes of waste from landfill per year.[footnote 177]



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