A foot in the plastic bear trap: the 3 big topics of circular economy so far this year.

Jun 14, 2019

Textile dumping, plastic hysteria and benchmarking inside the company and over the boarders: three issues rolling circular economy so far this year. While it is not quite putting a foot in the plastic bear trap, it could come close. 

I was asked recently to summarise the key issues I see when participating in the circular economy this half year. It is a reflection of time in Brussels and Berlin meeting with regulators, company owners and those in material science and manufacture.

  1. Hot Topics: Textiles, Plastics

  2. Methods: Measuring circularity, Benchmarking against other countries

  3. Still under the radar: Critical raw materials

 

Hot Topics:

Textiles

The last year I participated in the Fashion Policy Lab with the European Federation of Sustainable Business and C&A Foundation which brought together actors from the spectrum involved in textiles - from cotton to chemicals, buttons to retailers - in the take/make/waste model https://ecopreneur.eu/wp-content/uploads/2019/03/EcoP-Circular-Fashion-Advocacy-Report-28-3-19.pdf. Textiles leverage significant volumes of non-renewable resources in their production chain which are typically (in fast fashion) used for just a relatively short amount of time, thus becoming waste, an industry worth € 1.1 trillion a year. It is estimated that  <1% of textiles produced for clothing are recycled and on the social side, continued labour abuses are still standard from poverty, exploitation and abuse for many of the 300 million people part of the industry. The role of the circular economy in fashion would ease some of these burdens by engaging textiles and fibres at their highest value, not their lowest. To transition to such a perspective would require more closed loops of trade whereby materials were in repair, re-use and maintenance, clear separation, sorting and processing for up-cycled design into other industry products.  It is expected that closing sales will triple by 2050 and currently, there is an estimation that 79 billion cubic metres of water 1.7 billion tones of C02 emissions to keep the industry moving is producing directly, 92 million tonnes of waste (2015 figures). The race to the bottom of fast and cheap fashion with low quality and high chemical load to be deterred and embracing new commercial models such as leasing, textile services and true-cost-accounting.

 

The following 5 measures are suggested by the group to bring textiles and fashion forward:

Source: https://ecopreneur.eu/wp-content/uploads/2019/03/EcoP-Circular-Fashion-Advocacy-Report-28-3-19.pdf

 

Innovation policies – research programmes with government subsidies, investment tax deduction, technological development and innovation, small and medium-sized enterprises (SMEs) support, – with a focus on textile recycling, preventing micro-plastics release, and calculating external impacts and true prices.

Economic incentives – procurement, extended producer responsibility, VAT, and a tax shift to drive market demand for circular products and services by making make them cheaper and “linear” ones more expensive.

Regulation – establishing a common regulatory framework for transparency and traceability, circular design and improved end-of-waste status across the EU. This regulation should apply to substances of very high concern (SVHC) and textile waste, and should be enforced through taxes, bans and fines – for example, with a ban on landfilling of textiles. The Sustainable Apparel Coalition’s (SAC) Higg Index can play a major role here by measuring material flows and environmental impacts of manufacturing systems.

Trade policies – facilitating export of semi-finished products and sorted, reusable textile waste to producing countries. Negative social impacts in producing countries should be avoided. Waste transport across the globe should be minimised.

Voluntary actions – covenants, commitments and standards – are encouraged to engage stakeholders, with legislation standing by in case of lacking results.

 

Plastics

In May the Council of the EU adopted the Commission proposal on single use plastics (banning 10 items most found on European beaches) as part of the plastics strategy, and in combination to address marine litter. There are two aspects to this, firstly to ban a product (eg plastic cutlery and straws) and secondly to reduce national consumption, update design and labelling and make waste management obligations for producers. You can find the direct points below, and a summary /links from here http://europa.eu/rapid/press-release_IP-19-2631_en.htm

 

Specifically, these updated measures are:

  • A ban on selected single-use products made of plastic for which alternatives exist on the market: cotton bud sticks, cutlery, plates, straws, stirrers, sticks for balloons, as well as cups, food and beverage containers made of expanded polystyrene and on all products made of oxo-degradable plastic.
  • Measures to reduce consumption of food containers and beverage cups made of plastic and specific marking and labelling of certain products.
  • Extended Producer Responsibility schemes covering the cost to clean-up litter, applied to products such as tobacco filters and fishing gear.
  • A 90% separate collection target for plastic bottles by 2029 (77% by 2025) and the introduction of design requirements to connect caps to bottles, as well as target to incorporate 25% of recycled plastic in PET bottles as from 2025 and 30% in all plastic bottles as from 2030. 

In my opinion the role of extended producer responsibility and pre-paying for the environmental footprint of a product, or packaging is going to be the game changer in this market. For those companies who have already moved their design and manufacture to using secondary raw materials (like recyclat) are going to be the clear winners in the first phase of implementation. Addressing the single use plastics is not a panacea for the the situation though, and there are two issues I see facing the market right now

1) consumer hysteria about plastics - which 2) push knee-jerk reactions from companies to take swift actions; which might not be carefully thought out.

The jury is still out as to the SWOT on bioplastics because the range of inter-dependant flow on effects are significant - eg if a farmer produces corn for bioplastics, at the cost of producing food for their village; that is not necessarily a ‘benefit’. At Biofach https://www.unternehmensgruen.org/blog/2019/03/06/biofach-2019-wertschaften-verbindet/ earlier this year, Unternehmensgruen hosted a panel with Martina Merz https://www.merzpunkt.de/ , expert in sustainable packaging, and Annett Kaeding-Koppers https://www.akk-consulting.de/, expert in material science and machinery, made simple examples with a bunch of carrots to demonstrate the myriad of options for packaging for food safety and extended shelf life. No answers are clear for plastics, especially in food and packaging at the moment. In May at Food Innovation Camp https://www.unternehmensgruen.org/blog/2019/06/07/wir-muessen-abfall-endlich-als-rohstoff-sehen/ a panel of 7 outlined the SWOT in food with a clear answer of step-for-step approach with interdependent thinking as a priority. Follow-on effects are to be the priority in making a decision from single use plastics https://www.unternehmensgruen.org/blog/2019/03/01/plastic-planet-biobranche-muss-vorreiter-sein/ and certainly the feedback that Dr Katharina Reuter, CEO of Unternehmensgruen has been receiving to date https://www.linkedin.com/in/dr-katharina-reuter-1144815b/

Pic: Food Innovation Camp panel of experts discussing packaging.

In fact DENTTABS http://www.denttabs.de/, Germany’s darling tooth-care tablets are directly exploring the realm for more mindful packaging for their tabs, and finding both supply to Europe, certification of ethical source and volumes for foils to be a challenge to overcome; one which they address with cross-sector collaboration. It is cases like this who are explorative and engaging, both with the market and material imports to test and trial solutions openly with legislators, scientists, entrepreneurs and consumers part of the discussion. What certainly does more damage than heal, are companies and writers who make simple solutions, portray them as a panacea and sell a simple, yet ultimately faulted in flow-on-effects solution to the market. It alienates the opportunity for better material science, misinforms the market and fuels further hysteria and ultimately, does not achieve the long-term goal of sustainable solutions. I applaud CEO, Axel Kaiser, for working with importers of carbohydrates, makers of machinery, and EU-oriented supply chains for discussing how collaboratively, there can be more local options for bio-plastic generation with reduced shipping footprint, agri-damage and chemicals.

Dare I suggest, mindfulness as it comes to the plastics discussion. For everyone. Responsible communications, responsible science and reflective and critical thinking. Sounds so basic, yet the hysteria that has engulfed the market in the last 6 months is concerning.

 

Methods: Measuring circularity, benchmarking against other countries

 

Circularity Check

A company to check their circularity is a great way to kick off this inter-discipline thinking to solutions and what Ecopreneur brought as a free tool to companies with the Circularity Check https://ecopreneur.eu/circularity-check-landing-page/  a tool that brings the circular economy functions to life with a simple check so an entrepreneur can see more details on the overall footprint of their design, manufacture, logistics and post-use. Thus creates a great starting point for asking better questions about ‘what can be done for improved sustainability’.

 

Benchmarking

Arthur Ten Wolde https://www.linkedin.com/in/arthurtenwolde/ and team from Ecopreneur did a comprehensive study and comparison between the EU countries about who is doing (and not doing) what in relation to regulatory stance on the circular economy. It tells a fascinating story of both ambition and national opportunities. https://ecopreneur.eu/wp-content/uploads/2019/05/Ecopreneur-Circular-Economy-Update-report-2019.pdf

Looking at KPIs from waste p/person to voting behaviour of national regulators on EU circularity, the report comes with a national summary and a set of country-specific recommendations. Clearly, some countries who are ahead of the curve, the Netherlands, Scotland, Slovenia, France, Belgium and Finland. With others, like France, who implemented many extended producer responsibility schemes in a variety of sectors, Sweden who reduced VAT and income tax for repair schemes and Italy who increased municipal waste recycling are great examples. Lagging countries such as Cyprus, Greece, Malta and Romania with even countries with footprint needing to significantly reduce their waste per person, like Netherlands.

The key recommendations for policy makers from this research was the following:

  • Start a Green Deal on Circular Procurement
  • Create circular “hubs” to support companies with circular models
  • Improve and extend the extended producer responsibility (EPR) schemes to cover eco-modulation of fees
  • Introduce low VAT rates for repair services, resold goods and transactions with clearly defined social reasons
  • Create a “Green New Deal” to shift taxes from labour to resources
  • Shift investments away from municipal waste incineration.
  • Create a national circular economy roadmap with concrete targets

 

What I found most interesting was the incentive from the Swedish tax agency for in-home repairs https://www.skatteverket.se/privat/fastigheterochbostad/rotochrutarbete.4.2e56d4ba1202f95012080002966.html

Whereby up to 50% labour costs for repairs of large household appliances can be tax deductible up to a maximum of 25000 Kr / year or 50000 Kr for persons over the age of 65 and notably, for when the repairs are performed by professionals in the owner’s home, thus stimulating the service industry.

 

Still under the radar: Critical raw materials

While launched some years ago, the EU roadmap of critical raw materials is something I am recommending companies in manufacture to keep an eye on https://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_en .  In light of updated trade agreements, and the discussion of ‘trade wars’ around the word it is important for company owners to have a clear sense of risk when reviewing where their (direct or indirect) ingredients are coming from and what risk they represent either to future supply, or economic importance. These critical raw materials are enabling you to read this blog right now on your phone, which uses approximately 50 types of metals to make it possible; and are found as non-energy sources across all industries and supply chains. They make up the enablement of modern technology and are also part of ‘new’ environmentally friendly solutions like solar panels and e-mobility.

Countries accounting for largest share of EU supply of critical raw materials:

Source: https://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_en

 

 

 

Smart companies will be in touch with their electronics suppliers to understand more about the next layer of supply which sits behind it. They will be spending more effort on alternatives, considerations of buying volumes and risk management.

 

The last update of Critical Raw Materials was in 2017 with the following outlined:

Source: https://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_en

 

 

 

 

 

 

 

 

Thus in summary, hot topics of textiles and plastics need to be applying long-term thinking, methods to check circularity and see what others are doing well at the moment are good for short-term ideas and process changes, while looking under the iceberg of critical raw materials for future risk management in all our favourite appliances, including the one I type this article on; is vital.

 

What topics in the circular economy have become top of mind for you this half year?

 

References: Pls see the links in the article for direct list.