Since the dawn of the industrial age, our economies have been fundamentally linear – we take, we make, we use and then we throw away. Today, only 12% of the materials used by humans are ever returned to the economy (EU Circular Action Plan).[1]
This obviously generates huge amounts of waste. But it also means that resources will continue to be grown, collected, mined and produced in wholly unsustainable ways, exhausting finite supplies and accelerating climate change. Creating a circular economy is about far more than consumer recycling. It requires huge, systemic change and entirely new modes of thinking. After all, it’s not only our economies that are linear – so too are the mindsets of legislators and industry leaders.
Currently, Nordic countries provide the best roadmap for how to begin “closing the loop.” There, cities have transformed their energy models, manufacturers have reimagined their products’ lifecycles and citizens are rethinking the way they consume. Despite the innovations, Sweden still loses materials worth 42 billion Swedish kronor ($4 billion), or about 1% of GDP, from the production cycle every year. Nonetheless, the lesson from northern Europe is clear: While companies and consumers have a huge role to play, without leadership, innovation, and governance from above, the change will never be fast enough.
The EU’s new Circular Action Plan – part of its sweeping European Green Deal – removes obstacles, tightens legislation, and incentivizes the type of systems thinking required to overhaul linear thinking and sector silos. Within structured EU governance, it encourages cross-border leadership and cooperation between legislators, companies, and organizations at the forefront of circular development. This legal framework, in turn, can help companies shape circular business models, according to Pär Larshans, chief strategy officer at the Swedish waste management and recycling company, Ragn-Sells. “The most important thing for us now is that the EU legislation is in line with the development of society, where resource allocation and circular systems thinking have reached all decision levels in the EU,” he said. – Changes in legislation and the emergence of new circular business models can be stimulated through collaboration”. “This is about innovative collaboration and business models focusing on different types of materials and companies, in electronics, transport, textiles, plastics, metals, energy, buildings and the food and agricultural sectors, which are the most resource-intensive sectors in today’s society.”
Ragn-Sells’ traditional business model – which centers around the collection, treatment and recycling household and business waste – serves as a compelling case study on the shift that is taking place, where linear systems can be replaced by detoxifying circular systems. Today the company serves incineration facilities with fuel for district heating systems that also generate electricity that in itself reduces local demand for fossil fuels.
But more is needed to close the loop. Burning waste produces new waste that is landfilled in the form of bottom ashes containing a lot of metals and a “fly ash,” which usually contains large amounts of salts. In Sweden alone, incinerating waste for energy and district heating produces 300,000 tons of fly ash a year. It is traditionally sent to landfill, with about 2/3 rd. are dumped in a disused limestone quarry on the Norwegian island of Langøya. Norway has with “Langöya” become the dumping site for several EU countries fly ashes.
Now to the circular future: Ragn-Sells has the last 10 years developed processes that can extract resources with the use of urban mining methods based on circular chemistry. It means that here is a possibility to stop landfilling the fly ashes. Ragn-Sells invests now ss €50 million+ ($54 million) in a plant that separates and extracts both heavy metals and three types of salt (potassium chloride, sodium chloride, and calcium chloride) from the fly ash. Once separated, these materials can then be sold on as fertilizer, a replacer for cement in the concrete industry or as salt to de-ice roads, among many other uses. This is so far the only technique in the world that can recirculate the resources and not just wash them away meaning that they end up in lakes or oceans. A win for the environment, a win for the society, and good business.
In Germany’s cabinet passed the sewage sludge ordinance, which requires treatment plants to recover at least 50 percent of the phosphorus contained in sewage. Operators are legally obliged to submit their plans for achieving this by 2023. Nitrogen, too, can be extracted from sewage. Rather than returning to the atmosphere as a gas (such as nitrous oxide, a key contributor to climate change), only to be re-extracted, the nitrogen is instead turned into crystals that can re-enter the economy as an agricultural fertilizer. This, in turn, helps reduce the food industry’s climate footprint.
To this end, Ragn-Sells has joined with fellow Swedish firms EasyMining and Lantmännen, as well as the Danish company Biofos, to test large-scale circular chemical nitrogen extraction at a sewage plant in Copenhagen. If implemented on a European level the reduced cost for society is calculated to be 1 billion Euro($1.2 billion) a year (Ragn-Sells) compared to today’s biological treatment that emits laughing gas to the atmosphere. The nitrogen fertilizer that the process produces with now CO2 emissions at all becomes the “bonus”.
This is one of the countless ways we can detoxify and re-use society’s waste, ensuring it isn’t a burden for future generations while generating value at the same time. This kind of systems thinking helps to drive — and is driven by — innovative collaborations. In Europe, we have today based our linear system on the waste hierarchy, a model presented in 1979 that has been very effective in reducing waste in society, the founder Dr. Ad Lansinkdid in his book “Challenging Changes: Connecting Waste Hierarchy and Circular Economy,” Dr. Lansink describes how waste prevention, reuse, and recovery first gained traction in the 1980s. But, he said, the most important changes lie ahead. Leadership and legislation are needed to break down what he calls the “waste hierarchy.” But he also ad that we need to shift to a resource focus in the future, where principles of Time, Place, and Function need to be in the center.
In the Netherlands, where Lansik served as a parliamentarian, the government has committed to developing a fully circular economy by 2050. The plan begins with a 50% reduction in the use of primary raw materials (namely minerals, fossil, and metals) by 2030. Another 20 years on, and these materials “will be obtained in a sustainable manner, and further damage to social and physical living environments and public health will be prevented,” the plan says. This will be achieved, partly, through systems thinking, whether that relates to policy, behavioral and financial incentives, or re-engineering the country’s infrastructure. And the result could, according to the Dutch government’s projections, generate 54,000 new jobs across the country. (The EU, meanwhile, estimates that the European Green Deal and Circular Action Plan will create 700,000 new jobs.)
Herein lies the key to a successful and sustainable circular economy: Not only giving new life to materials but creating new income for innovative companies and new jobs for skilled workers in the process.
[1] https://ec.europa.eu/commission/presscorner/detail/en/ip_20_420
