Building the circular economy: time to shift!
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The document discusses the transition from a linear to a circular economy, highlighting that the current linear model is unsustainable and leads to excessive waste and resource depletion. It outlines strategies for moving towards a circular model, including reduction, reuse, repair, remanufacture, and recycling, emphasizing the economic, environmental, and social benefits of such a shift. The document also presents the European Green Deal and its associated funding initiatives as key drivers for promoting circular economy practices across various sectors.
![25
CIRCULAR ECONOMY HOLDS A HUGE POTENTIAL OF ECONOMIC VALUE CREATION
Economic Value: innovative new business
models will account for an additional global
market opportunity of more than EUR 600
billion by 2025.
As shown in the study on the right, the
biggest market volume for Circular Economy
is projected in "renewable construction
material" and "recycled construction
material".
The growth rate (CAGR) in Europe is
forecasted to be maximum – up to 33% – for
"building life extension" and "EOL material
upcycling" activities.
Market Volume forecast for CE
Source: Roland Berger
Value Chain Step MARKET VOLUME [EUR BN] CGAR 2020-2025
PLAN
& DESIGN
PROCURE
CONSTRUCT
OPERATE
EOL
Europe World Europe World Europe World
2020 2025
1. Green building design
2. Advanced software
3. Renewable construction
material
4. Recycled construction
material
5. Resource-efficient
construction
6. Excess material recycling
7. Energy-efficient services
8. Space-sharing services
6. Building life extension
10. EOL material upcycling
2.9 9.8 5.3 24.3
110.1
268.9
193.3
471.7
13% 20%
10.9
27.7
15.5
42.5
9.4
36.3 21.6
67.1
1.2 4.0 5.0 13.2
12% 12%
7% 9%
18% 13%
33% 27%
∑ Overall circular construction market
134.6 346.7 240.7 618.8 12% 12%](https://image.slidesharecdn.com/etce2203alr-abok-220322162549/85/Building-the-circular-economy-time-to-shift-25-320.jpg)
![26
CIRCULAR ECONOMY HOLDS A HUGE POTENTIAL OF ECONOMIC VALUE CREATION
Zooming into the profit
margins, for different circular
strategies, the largest profit
margin is observed for
“resource efficient
construction” and “EOL
material recycling”
Profit Margin for Circular Strategy
Source: Roland Berger
VALUE CHAIN STEP Circular Strategy PROFIT MARGIN [%]
PLAN & DESIGN
PROCURE
CONSTRUCT
OPERATE
EOL
1. Green building design
3. Renewable construction material
5. Resource-efficient construction
7. Energy-efficient services
9. Building life extension
2. Advanced software
4. Recycled construction material
6. Excess material recycling
8. Space-sharing services
10. EOL material upcycling
10% - 15%
13% - 17%
8% - 12%
5% - 9%
20% - 25%
5% - 7%
13% - 17%
8% - 12%
10% - 15%
20% - 25%](https://image.slidesharecdn.com/etce2203alr-abok-220322162549/85/Building-the-circular-economy-time-to-shift-26-320.jpg)
Building the circular economy: time to shift!
- 1. EMERGING TRENDS BUILDING THE CIRCULAR ECONOMY: TIME TO SHIFT!
- 2. 2
- 3. 3 3 I. From a linear to a circular economy II. Top three reasons for going circular now III. Getting circular 3 TABLE OF CONTENTS La Grande Halle par Encore Heureux Architectes - 2019
- 4. 4 I. FROM A LINEAR TO A CIRCULAR ECONOMY
- 5. 5 OUR CURRENT LINEAR ECONOMY MODEL IS NOT SUSTAINABLE ”Take, Make, Waste”: linear economy involves taking raw materials to make products that are used and then discarded as waste According to the Ellen MacArthur Foundation, 80% of waste is simply the result of poor (linear) design: Choice of non-recyclable materials Lack of eco-design/disregard of products life cycles Lack of consideration of environmental impacts Without change, by 2050, we will need the resource equivalent of 3 Earths every year! However, we already see shortages of some resources (sand, metals, water…) Resource extraction Production Distribution Consumption Disposal TAKE MAKE WASTE Assumption: Infinite resources Assumption: Infinite regenerative capacity of the Earth
- 6. 6 ALTERNATIVES TO OUR LINEAR APPROACH Reduction The best waste is none at all! From decreasing the amount of raw material used to sharing – rather than buying – we can develop alternatives to the take- make-waste approach. Reduce is the first strategy to consider when serving one of our needs or designing a product/service: can we achieve similar – or acceptable – results with lesser resource consumption, or none at all? Reuse Products such as glass bottles can be reused several times before being discarded. Reuse is the first strategy to consider instead of recycling because there is no need for further treatment: it reduces pollution, waste and makes the process more sustainable. Repair Products are generally less durable and repairable than they were in the past. Enabling and promoting repair, for instance by making spare parts and information more easily available, can bring old products back to life. Choosing repairing rather than recycling allows financing savings, contributes to waste reduction and extends the product life cycle (principle of Product Lifecycle Extension or PLE). Remanufacture Products such as electronic goods can be rebuilt to the original manufacturer specifications using a combination of reused, repaired and new parts. Whereas recycling promotes material recovery without retaining any design features or specifications, remanufacturing retains the identity of the product, aiming to reestablish the product as a new or even higher performance levels than the original product. Recycle Recycling is a process to obtain the same (high grade) or lower (low grade) quality of materials from waste (Kirchherr et al. 2017). Recycling itself is an energy intensive process and does not preserve the embodied energy used in the resource extraction, production and distribution process. It is the last option to consider. Products such as metals, paper, glass or plastics can be recycled as a source of secondary raw materials.
- 7. 7 7 The smaller the loop: SLOWING, NARROWING, CLOSING LOOPS The less reclamation, and reprocessing time costs associated The higher the chance of using the product or material several times in different levels of the value chain Abandon Reclamation costs Reprocessing time and costs Remanufacture Recycle Disposal costs… Clean-up costs… Externalized costs… ( + ) ( - ) ( + ) Reuse Repair ( - ) Reduce 6
- 8. 8 A CIRCULAR ECONOMY MODEL: SUSTAINABILITY-BY-DESIGN The Circular Economy (CE) is a disruptive economic model that promotes restorative/regenerative systems in which products, components, and materials continuously add, recreate, and preserve value. In practice, CE uses design in order to minimize waste through reusing, repairing, remanufacturing and recycling existing materials and products. Applying the principle of ”designing for X” (X being reuse, repair, remanufacture, recycle accordingly) in order to extend product lifecycles and avoid extraction of virgin materials. One of the other positive effects of circular economy is the expected creation of jobs in services. This approach can be applied to all products and all sectors of activity. Resource extraction Production Distribution Consumption Dispose Reuse Repair Remanufacture Recycle
- 9. 9 9 ONCE THE LOOP IS CLOSED In opposition with the “Take, Make, Waste” linear approach, the circular economy model ultimately takes the shape of a closed loop, in which a product’s end of life results in the creation (through recycling) of new resources that can be used to produce new products. This is of course an idealized representation. Even in the best- case scenario, recycling implies a certain percentage of loss, and we’ll still need additional new resources as an input for production. Nonetheless, such an approach would allow a drastic diminution of resource extraction. In addition to a strictly economical benefit, a Circular Business Model (CBM) can have positive consequences on an environmental level by reducing waste and pollution or limiting climate change and biodiversity loss. EXTRACT 8
- 10. 10 LINEAR VS CIRCULAR ECONOMY: THE KEY DIFFERENCES LINEAR ECONOMY CIRCULAR ECONOMY Steps Take-make-dispose Take-make- reuse/repair/remanufacture/recycle Focus Eco-efficiency (i.e. process-oriented) Eco-effectivity (i.e. result-oriented) System boundaries Short-term, from purchase to sale Long-term, multiple lifecycles Reuse None or limited downcycling Upcycling, cascading, high-grade recycling Business models Focus on products Focus on services
- 11. 11 II. TOP THREE REASONS FOR GOING CIRCULAR NOW
- 12. 12 12 GAIN A FIRST-MOVER ADVANTAGE REASON #1 I I . T O P T H R E E R E A S O N S F O R G O I N G C I R C U L A R N O W
- 13. 13 A TRANSITION PROCESS ALREADY UNDERWAY Growing corporate focus on sustainable products and services all along the value chain with an emerging drive towards (and interest in circularity)
- 14. 14 14 EUROPE IS STRONGLY COMMITTED REASON #2 I I . T O P T H R E E R E A S O N S F O R G O I N G C I R C U L A R N O W
- 15. 15 EU-BASED RESEARCH LEADING THE WAY The concept of a circular economy first appeared in the 70’s and matured at the beginning of the century. An exponential increase in research has been noted over the last decade on the topic of circular economy. The EU is the world leader in CE-based academic research, followed by China and the UK. 0 20 40 60 80 100 120 2007 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 123 86 29 15 14 11 10 393 91 67 56 32 25 24 21 15 13 13 13 12 11 CHINA UK USA AUSTRALIA BRAZIL SINGAPORE CANADA TOTAL EU SPAIN ITALY NETHERLANDS PORTUGAL GERMANY FRANCE BELGIUM SWEDEN DENMARK FINLAND ROMANIA POLAND AUSTRIA Increase of the number of articles published on circular economy over the last 15 years Number of research papers published on circular economy by country Source: J-Global Source: J-Global
- 16. 16 16 IMPROVING THE WELL BEING OF PEOPLE Become climate neutral by 2050 Protect human life, animals and plants by cutting pollution Help companies become world leaders in clean products and technologies Help and ensure a just and fair transition THE EUROPEAN GREEN DEAL: MISSION AND OBJECTIVES The European Green Deal is the European Union’s blueprint to: Decarbonise the EU economy by 2050 Revolutionise the EU's energy system Profoundly transform the economy and inspire efforts to combat climate change A dedicated circular economy action plan has been launched (CEAP). The CEAP focuses on eight sectors – which include construction - that use most resources and where the potential for circularity is high. The European Green Deal
- 17. 17 17 CREATING GREEN BUILDINGS FOR THE FUTURE THE RENOVATION WAVE STRATEGY, A BOOST FOR THE CIRCULAR ECONOMY Building and renovating is one of the key policy area of the European green deal The strategy aims to double the annual energy renovation rate within 10 years and to foster deep renovation By 2030, 35 million buildings could be renovated and up to 160,000 additional green jobs created in the construction sector. Circular Economy is identified as a key factor to achieve this objective Renovating schools and hospitals by investing the money saved through building efficiency to support education and public health Lift national regulatory barriers that inhibit energy efficiency investments in rented and multi-ownership buildings Making existing buildings circular Refurbished and sustainable buildings in the EU will help pave the way for a decarbonized and clean energy system Renovation of social housing Particular attention will be paid to the renovation of social housing, to help households who struggle to pay their energy bills Renovation wave
- 18. 18 WITH NEXTGENERATIONEU, €750 BILLIONS FOR EUROPE’S RECOVERY! NextGenerationEU Grants 390.0 of which provisioning for guarantees 5.6 Loans 360.0 TOTAL 750.0 Funding under NGEU Funding under MFF Total funding Recovery & Resilience Facility 672.5 0.8 673.3 Of which GRANTS 312.5 - 313.3 Of which LOANS 360.0 - 360.0 REACT-EU 47.5 - 47.5 Rural development 7.5 77.9 85.4 Just Transition Fund 10.0 7.5 17.5 InvestEU 5.6 3.8 9.4 RescEU 1.9 1.1 3.0 Horizon Europe 5.0 79.9 84.9 All amounts in EUR billion in commitments, 2018 prices. Source: European Commission POWER UP Clean technologies and renewables RENOVATE Energy efficiency of buildings RECHARGE & REFUEL Sustainable transport & charging stations CONNECT Rapid broadband services – incl. fiber & 5G MODERNISE Digitalization of public administration SCALE UP Data cloud and sustainable processors RESKILL AND UPSKILL Education & training to support digital skills
- 19. 19 WITH NEXTGENERATIONEU, €750 BILLIONS FOR EUROPE’S RECOVERY! 672.5B€ The majority of funds from NextGenerationEU (€672.5 billion) will be spent through the Recovery and Resilience Facility (RRF) programme. 37% will be targeted to climate-related expenditure, supporting renovation investment and energy efficiency-related reforms across Member States.
- 20. 20 IN CONCLUSION A WAVE OF OPPORTUNITIES TO INVEST IN CE, IN EUROPE AND GLOBALLY Changing the current economic system needs a common vision and in this respect circular economy is a unique opportunity for dialogue and collaboration between private and public sector entities to achieve the common goal of long- term value creation. The European Green Deal with the new Circular Economy Action Plan will ensure all policies align with other European regulations to transition to a resilient circular economy fostering an enabling environment for investments along the CE principles. Building renovation, is one of the sectors facing the largest investment gap. The EU 2021-2027 Multiannual Financial Framework and the recovery instrument NextGenerationEU provide an unprecedented opportunity to set off the renovation wave, providing new economic opportunities and investment possibilities for this crucial sector.
- 21. 21 21 ECONOMIC, ENVIRONMENTAL & SOCIETAL VALUE REASON #3 I I . T O P T H R E E R E A S O N S F O R G O I N G C I R C U L A R N O W
- 22. 22 22 0 200 400 600 800 1000 1200 1400 1600 Building construction, residential &non- residential buildings Civilengineering, transport, energy, ICT, drinking water & wastewater infrastructure Consumer & capital goods, large household appliances, small kitchen appliances, consumer electronics, ICT equipment, vehicules, clothing, etc. Building technology, heating systems, radiators, pipes, sanitary equipment The largest part of the material stock lies in the construction sector Mineral materials Metal Plastics Wood Others CIRCULAR ECONOMY CAN HELP TO FACE SUSTAINABILITY CHALLENGES By reducing resource consumption: While natural resources are becoming scarce, the largest stock of natural materials are in the construction sector which needs to be reused efficiently. By eliminating waste generation: Construction accounts for more than 35% of total EU waste. By controlling greenhouse gas emissions: Buildings in Europe generate 40% of European emissions. 149 153 353 18 2 21 12 508 15 283 Source: Urban Mining – Resource Conservation in the Anthropocene, 2019, German Environment Agency
- 23. 23 23 GHG emission reduction (non including potential transport) CIRCULAR ECONOMY CAN HELP TO FACE SUSTAINABILITY CHALLENGES Recycled Recycled concrete +10% Recycled brick façade 59-62% Reused Reused concrete 95-96% Reused brick 75-79% Conclusion: applying circular principles such as recycling and reuse can save as much as 10-95% of the GHG emissions. The savings vary with the applied principle and type of material. -150 -100 -50 0 50 100 150 concrete brick Potential reduction in GHG emissions in % (under experimental conditions) Conventional scenario Recycled Reused Source: Comparison of GHG emissions from circular and conventional building components, Buildings and Cities
- 24. 24 24 Created in 2018, Waste Marketplace is a one-stop-shop waste management platform. They help construction and manufacturing companies select the best waste management solutions and monitor their cost and environmental impact. According to Jérôme de Tomasi, the platform’s CEO, they have recently achieved a 95% rate of waste recovery on a multi-site construction project – compared to an average 70% for similar projects. To reach the recovery rate objective, Waste Marketplace applied an original approach, including: Identifying, all incoming and outgoing flows Auditing the nature and composition of the waste generated by each material and equipment, and their packaging Partnering with the client’s procurement team and key suppliers to identify problematic waste and taking corrective measures upstream Waste Marketplace was initiated by a VINCI intrapreneur supported by Leonard. Logo HOW THINKING CIRCULAR CAN BOOST WASTE RECOVERY ON CONSTRUCTION SITES Case Study: WASTE MARKETPLACE
- 25. 25 CIRCULAR ECONOMY HOLDS A HUGE POTENTIAL OF ECONOMIC VALUE CREATION Economic Value: innovative new business models will account for an additional global market opportunity of more than EUR 600 billion by 2025. As shown in the study on the right, the biggest market volume for Circular Economy is projected in "renewable construction material" and "recycled construction material". The growth rate (CAGR) in Europe is forecasted to be maximum – up to 33% – for "building life extension" and "EOL material upcycling" activities. Market Volume forecast for CE Source: Roland Berger Value Chain Step MARKET VOLUME [EUR BN] CGAR 2020-2025 PLAN & DESIGN PROCURE CONSTRUCT OPERATE EOL Europe World Europe World Europe World 2020 2025 1. Green building design 2. Advanced software 3. Renewable construction material 4. Recycled construction material 5. Resource-efficient construction 6. Excess material recycling 7. Energy-efficient services 8. Space-sharing services 6. Building life extension 10. EOL material upcycling 2.9 9.8 5.3 24.3 110.1 268.9 193.3 471.7 13% 20% 10.9 27.7 15.5 42.5 9.4 36.3 21.6 67.1 1.2 4.0 5.0 13.2 12% 12% 7% 9% 18% 13% 33% 27% ∑ Overall circular construction market 134.6 346.7 240.7 618.8 12% 12%
- 26. 26 CIRCULAR ECONOMY HOLDS A HUGE POTENTIAL OF ECONOMIC VALUE CREATION Zooming into the profit margins, for different circular strategies, the largest profit margin is observed for “resource efficient construction” and “EOL material recycling” Profit Margin for Circular Strategy Source: Roland Berger VALUE CHAIN STEP Circular Strategy PROFIT MARGIN [%] PLAN & DESIGN PROCURE CONSTRUCT OPERATE EOL 1. Green building design 3. Renewable construction material 5. Resource-efficient construction 7. Energy-efficient services 9. Building life extension 2. Advanced software 4. Recycled construction material 6. Excess material recycling 8. Space-sharing services 10. EOL material upcycling 10% - 15% 13% - 17% 8% - 12% 5% - 9% 20% - 25% 5% - 7% 13% - 17% 8% - 12% 10% - 15% 20% - 25%
- 27. 27 CIRCULAR ECONOMY PROVIDES SOCIAL VALUE Employment generation The circular economy offers great potential for new activities and jobs (Green Deal). By 2030, an additional 160 000 green jobs could be created in the EU construction sector through a renovation wave alone. Enhancing productivity Using environmentally friendly construction materials has positive impacts on wellbeing, for example, and has been shown to increase productivity by up to 10%. Enabling just and inclusive transition It allows member states or regions which have a high dependence on fossil fuels to invest in new green jobs, sustainable public transport, renewable energy, digital connectivity and clean energy infrastructure.
- 29. 29 29 LEARNING FROM CIRCULAR BUSINESS MODELS I I I . G E T T I N G C I R C U L A R
- 30. 30 30 A DEFINITION OF CIRCULAR BUSINESS MODELS (CBM) Circular Business Models (CBMs) or Circular Economy Business Models (CEBMs) refer to innovative business models in which the creation of value maintains the economic value of the product and its inputs for as long as possible. Once we realize that “80% of a product's environmental impact is defined at the design stage” (Reniera O’Donnell of the Ellen MacArthur Foundation), we can see that circularity and CBMs are first and foremost a design challenge. Using this prism, any waste created by a business model can thus be seen as a design and/or business modeling flaw.
- 31. 31 A CBM CLASSIFICATION BASED ON 3 STRATEGIES THEY INTEGRATE Retain Product Ownership (RPO) CBMs in which ownership is retained by the producer or owner and separated from usership, including those that integrate Product as a Service (PaaS), aka leasing solutions, pay-per-use, and/or sharing (via platforms like AirBnB), are prime examples of RPO in action. Product Life Extension (PLE) CBMs that integrate different circular elements like reuse, remanufacturing, upcycling, and industrial symbiosis, for example, demonstrate how PLE promotes and enables circularity. Design-for-Recycling (DFR) CBMs that integrate modularity, simplified user maintenance, design for disassembly, and other “design for” elements (aka “Design for X”), are examples of DFR applications.
- 32. 32 32 MAINTAIN & REPAIR Maintenance & Repair (aka Maintaining) usually refers to CBM approaches that extend the useful life of a product by restoring a decayed or damaged good to usable condition. Maintain & Repair spotlight: La Ressourcerie du BTP La Ressourcerie du BTP is a logistics platform linked to a digital tool that optimizes reuse from deconstruction works while enabling access-to-employment. Audit of potential resources ahead of the project Careful removal by workers in socioprofessional integration Cleaning, re-packaging and storage Retail via an online platform La Ressourcerie du BTP was initiated in 2019 by a VINCI intrapreneur supported by Leonard. Logo
- 33. 33 33 SHARING AND SHARING PLATFORMS Sharing CBMs: facilitate collaboration among product users, whether individuals or organizations, for shared use of underutilized products, services and/or capacity, most often via a platform. Sharing spotlight: BlaBlaCar Digital sharing platforms like BlaBlaCar that started with carpooling (car sharing) have diversified into different forms of shared mobility like BlaBlaBus. In 2021, BlaBlaCar, which was France’s first well- known unicorn (a startup valued over $1 billion) announced the following key figure: 90 million members, in 22 countries, with 25 million travelers per quarter, more than €1.4 billion saved by members since BlaBlaCar’s creation. In addition, 263 kilometers is the average distance of a BlaBlaCar trip and 30 billion kilometers has been shared by the company’s community since its creation. What is interesting from a circular economy standpoint is that BlaBlaCar doubles the occupancy rate of cars (an underused and over-polluting asset) whilst operating a carbon-saving network. In just 2018 alone, 1.6 million tons of CO2 were saved by BlaBlaCar carpoolers, thanks to the relative efficiency of filled cars versus alternative modes of transport. Logo
- 34. 34 34 PRODUCT AS A SERVICE (PAAS) PaaS – aka servitization or Product-Service Systems (PSS) – refers to a business model in which ownership is retained by the manufacturer or the service provider and the product is leased to the user. Not all PaaS business models are circular per se. The entire value chain needs to be circular-by-design and PaaS business models can be an important element in that design. Product-as-a-Service (PaaS) Spotlight: Rent the Runway Rent the Runway (RTR) is a fast-growing online rental service that was founded in 2009. RTR offers high fashion to fashion-conscious users in exchange for a monthly subscription. The company has built out a massive logistics and supply chain operation, uses data intensively to continually improve customer experience and performance, and has invested in artificial intelligence to streamline operations. RTR now allows customers and non-customers alike to purchase the used articles it usually rents out, thus also ticking the Reuse business model checkbox. And since it repairs all its products too, to maintain them in like-new condition, the RTR business model also integrates Maintain, Repair and Reuse business model elements.
- 35. 35 35 REUSE Reuse refers to CBMs in which products or services are reused as is. Originally used by non-profit set-ups, this business model has recently spread to profit oriented online marketplaces. Reuse is often accompanied by re-marketing, design for repair, and design for reuse principles. Reuse Spotlight: Patagonia Worn Wear A longtime favorite brand of many sustainable-conscious consumers, Patagonia has been quite innovative in creating durable and sustainable fashion. One of its most recent initiatives is Worn Wear that allows customers to trade in worn Patagonia products to get credit to purchase new Patagonia products. The used products are then cleaned, repaired and refurbished and offered for sale at a significant discount from the new versions on the Worn Wear website. Many other retail clothing companies like Tommy Hilfiger and H&M are also offering similar trade-in schemes. While this still drives consumption, it allows for the products to be used for longer and more intensively, while boosting the sustainability and the profitability of companies.
- 36. 36 36 INDUSTRIAL SYMBIOSIS Industrial symbiosis CBMs refer to a process-orientated solution by which waste outputs from one process or product are used as inputs for another process or product. The CE principles of partnership, collaboration and value cycles are exemplified in this CBM approach. Industrial Symbiosis spotlight: Timberland & United Tires Timberland has partnered with tire manufacturer Omni United in order to create a branded line of tires that when worn are recycled and repurposed as soles for its Earthkeepers boots and footwear. Co- branded as Timberland Tires, the partnership aims to reduce demand for virgin rubber from the footwear industry. According to Timberland, “Timberland tires are the first tires ever purposefully designed to be recycled into footwear outsoles after their journey on the road is complete. The most low-tech, least intrusive way to break down tires and reuse them is the best option for our ecosystem.” In other words, Timberland is applying both industrial symbiosis and “designed-for-recycling” approaches. In order to industrialize the process, Omni United designed a tire return process to ensure used, worn, defective and damaged tires are returned to recycling facilities.
- 37. 37 37 REMANUFACTURING Remanufacturing CBMs create a closed-loop industrial process by which worn-out, decayed or damaged products are restored to new production functional equivalence (“like-new” condition). Remanufacturing spotlight: Cat REMAN One well-known actor among the growing array of remanufacturers is Caterpillar REMAN which has been operating remanufacturing since 1973. It is now a global operation and Caterpillar offers 7600 Cat REMAN products, all available with the same warranty as new parts. After decades of experience with remanufacturing, Cat Reman products are now designed to help customers waste less time and money on maintenance. Through the remanufacturing process Caterpillar reduces waste by 55-88%, lowers greenhouse gas production by 50- 88% and minimizes the need for raw materials.
- 38. 38 38 RECYCLE Recycling consists in making new products with raw materials from existing products. Downcycling, is the least representative of CE principles as it implies a loss of value in the system and the generation of waste. Upcycling (aka closed loop recycling) refers to CBMs in which a company turns low value materials used products into a new higher value product. Closed-loop recycling spotlight: HP Planet Partners While not an example of upcycling per se, HP's cartridge recycling program “Planet Partners”, which was started in 1991, is a very good example of closed-loop recycling. HP recovers and recycles 90% of the cartridges it sells and then ensures that no parts of the cartridge are sent to landfill. All parts are fully-recycled or go to thermal recovery. According to Forum for the Future, in its first 15 years, HP recycled more than 566 million ink and toner cartridges worldwide. As stated on the Planet Partner’s website “Our product repair, reuse, and recycling programs are part of the effort to create a more circular, low-carbon economy.” As recycling has become a bigger part of the HP business model, its products have also been increasingly designed-for-recycling (DfR), another key CBM principle.
- 39. 39 39 OVERCOMING THE OBSTACLES I I I . G E T T I N G C I R C U L A R
- 40. 40 40 HOW DOES CIRCULAR ECONOMY CHALLENGE TRADITIONAL THINKING? Design out waste Build resilience through diversity Use energy from renewable sources Think in systems Think in cascades Five main circular economy characteristics will enable a process rethink that can change the traditional production and consumption chains by applying innovative approaches to extend the life span of products and materials and effectively contribute towards the protection of the environment When circular-by-design, a company’s value chain becomes a value cycle CIRCULAR ECONOMY
- 41. 41 THE FIVE CHARACTERISTICS OF CIRCULAR THINKING Design out waste Build resilience through diversity Use energy from renewable sources Think in systems Think in cascades Waste does not exist when the biological and technical components (or materials) of a product are designed to fit within a biological or materials cycle, designed for disassembly and repurposing. Modularity, versatility, and adaptivity are prized features that need to be prioritized in an uncertain and fast- evolving world. Any circular story should start by looking into the energy involved in the process. Understanding how parts influence one another within a whole, and the relationship of the whole to the parts. It involves understanding flows and stocks at stake. Keep the materials, be they products, components or materials or biological nutrients, longer in circulation and for them to be transformed into different types of products or materials.
- 42. 42 BARRIERS TO IMPLEMENTING THE CIRCULAR ECONOMY While many companies are indeed designing circular business models “by-design”, others are simply integrating various principles of circular economy into their existing business models without making them fully circular. Recent research has brought to light the numerous barriers to developing circular business models. Chief among the barriers cited in various studies include: Financial barriers (notably the inability to model the financial advantages compared to a more linear approach ex ante) Structural barriers (organizational silos) Operational barriers (lack of necessary infrastructure, of capacity, of talent) Attitudinal barriers (managerial risk aversion and lack of understanding) Technological barriers (lack of access, of knowledge, of expertise). Finally, getting to a more circular economy requires collaboration throughout the value chain.
- 43. 43 43 BUILDING CIRCULAR ECONOMY CAPACITIES I I I . G E T T I N G C I R C U L A R
- 44. 44 UPSKILLING AND RESKILLING FOR CIRCULAR ECONOMY Training Europe needs VET systems that support young people to manage their entry to a changing labor market and ensure that adults access vocational programs. Investing in upskilling The green transition requires investments in skills of people to increase the number of professionals who build and master green technologies, including digital, develop green products, services and business models, create innovative nature-based solutions and help minimize the environmental footprint of activities. Spreading awareness Awareness and education at all levels will be instrumental in cultivating structurally and systematically the Circular Economy culture to the economic and societal actors. Transition to Circular Economy will reshape the way we live, work and interact. One needs to prepare for it with the right skill-sets. ”Europe will only become a climate neutral continent, a resource efficient society and a circular economy with an informed population and workforce that understands how to think and act green.” (EU-Skills Agenda).
- 45. 45 45 WHAT ARE THE SKILLS REQUIRED FOR CE INTEGRATION? Skills related to the circularity of materials, from product design to recycling and reuse Skills that support circularity infrastructure, e.g., reverse logistics and material infrastructure management Skills on repairing and maintaining goods Service skills, e.g., knowledge on digital platforms in sharing economy or second-hand markets Creative skills, e.g., design and marketing of circular products and services Skill Competence Training Learning Knowledge Advanced training Growth Experience Ability
- 46. 46 GETTING READY FOR THE CIRCULAR TRANSITION The construction sector is expected to be impacted considerably by the shift to circular economy. A short-term strategy should include: Risk Assessment Analysis that will emerge from the portfolio assessment with a Risk Management Plan developed to address: › Regulatory and policy barriers and opportunities › Financing opportunities › Environmental impact Immediate training and awareness of key employees in view of identifying threats and opportunities from the radically evolving environment Increase communication outreach proving that the Circular Economy principles are within the focus of corporate responsibly and the values of the enterprises
- 47. 47 REMAINING AT THE NUCLEUS OF THE DEVELOPMENTS AND HAVING A SAY The long-term strategy should include: Preparation for adaptation of those processes and operating models in line with the changes foreseen to have an impact on the current model Revise the corporate operating plans in view of ensuring long term sustainability Invest in long term training plans given that the transition is expected to be continuously evolving at least the next 7 years Seek representation in key national and international forums and/or monitor public consultations on polices and regulations that are likely to impact the sector at European as well as international level
- 48. 48 48 LEVERAGING EMERGING TOOLS & TECHNOLOGIES I I I . G E T T I N G C I R C U L A R
- 49. 49 49 1. DESIGN FOR DISASSEMBLY (DFD) Design for disassembly with dry connections Source: Wikifactory A concept where products are designed for material recovery, value retention, and meaningful next use. Achieved by: Accessible and reversible connections between components, e.g., using nuts and bolts instead of permanent connections Using precast modular elements with accessible and demountable assembly Disassembly plans in the design phase
- 50. 50 1. DFD IN VENLO CITY HALL Venlo applied a wide variety of circular measures for which they invested €3.4 M. This investment creates a net saving of €16.8 M over the use time of the building and a positive cash flow after year 1. Besides, the building has been realized within the budget and without dependency on subsidies. Since the building is in use (October 2016), the operational costs are significantly lower compared to former and traditional (linear) buildings. No need to demolish this building Designed for Disassembly To close the loop, 18% residual value for the furniture. This means total savings > of €300,000 for the city “Green demolition” plan devised by the building contractor that provides directives on how to disassemble the building to create continuous cycles. Source : c2ccertified.org
- 51. 51 51 2. DESIGN FOR FLEXIBILITY Design for flexibility with open plans layout Source: dnainfo.com Flexibility allows for the same building to be used for multiple cycles, for example office turned into library, in Covid crisis schools transformed into hospitals, etc. It allows a building to be functionally agile and respond readily to changing requirements of the users. There are many ways to incorporate flexibility in design like: Movable partitions Open plans Large floor heights Providing foundation and extra space for future extension
- 52. 52 52 2. DESIGN FOR FLEXIBILITY: WATERFALL BUILDING, VANCOUVER Photos en définition moyenne The concrete and glass structure houses units for artists that combine living as well as a dedicated workspace. Spaces are designed for flexibility: No fixed interior walls, they can be readily moved Future additions can be easily made to the structure Any combination of residential and commercial occupancies is permitted Photo : Jeff Hitchcock
- 53. 53 53 3. RENOVATION Renovation is often carried out to upgrade existing structure and improve the performance. It helps reduce the environmental impact of constructing a new facility by preserving the embodied energy and embodied carbon of the existing structure EU seeks to renovate 35 million buildings by 2030 in the "renovation wave" aimed at doubling the renovation rate of existing buildings in the next 10 years Historic residential building 1926, City Center Bolzano The building has been renovated to ensure comfort and minimize the energy demands without compromising on its historic appearance. It was achieved with the following measures: › Insulating walls with a 10-cm insulation in the inside, leaving the façade untouched › Adding new wooden windows with triple glazing › Replacing the single gas heater with a central heat pump Historic residential building 1926, City Center Bolzano Photo : Dr. Arch. Michael Tribus & Helmuth Moroder
- 54. 54 54 4. EXTENDING THE LIFE OF COMPONENTS WITH REUSE Emission reduction: 7.4 million kg CO2–eq Implementation 2010 year Investment 80.5 million euros Reuse is the process of reclaiming components and elements from an old building or site and using it again While proven to have a positive impact on the environment and financially viable, reuse is facing numerous challenges, including: The lack of standardization of components over time Mismatch of supply and demand and lack of reuse facilities locally Reluctance to use products without certification Safety and accessibility of old buildings Derwent London’s Angel Building reused an existing concrete frame, saving 7400 tons of CO2 in the construction process Angel Building Photo: Wikimedia Commons
- 55. 55 55 Photos en définition insuffisante Gasometer City, Vienna: Gas plant turned to residential project Photo: Wikimedia Commons 5. GIVE A NEW LIFE TO BUILDINGS WITH ADAPTIVE REUSE Adaptive reuse is the process of taking an old building or site and reusing it for a purpose other than it was designed for. While the process is far from new and has gained momentum as a mean to preserve cultural heritage, adaptive reuse holds a huge potential in terms of circular economy The most challenging barriers to adaptive reuse include: Physical limitations and structural constraints associated with the existing building and its environment Regulatory constraints, from zoning to building permit to other local development regulations Potential environmental hazards from contaminants such as asbestos and lead, or from former polluting activities Gasometer City in Vienna is a good illustration of obsolete buildings becoming the new center of a thriving community while retaining the stock of energy and material embodied in the site.
- 56. 56 6. MATERIALITY - CHOOSING THE RIGHT CONSTRUCTION MATERIALS Renewable/Finite Prioritize renewables like certified wood over finite sources. Recycled Content Building materials having recycled content save the production energy and resource extraction. Hence it’s crucial to prioritize then over virgin materials. Repairability Potential Materials & products which are easy to repair, last longer with higher value retention compared to one time use materials.
- 57. 57 6. MATERIALITY: GANDHI CHAPLIN MEMORIAL GARDEN, LONDON The site was transformed for community purpose 50% of all deconstructed materials were reused 150 tons of materials reused 10,000 plants collected for community projects Photos: semble.org / rosettaarts.org
- 58. 58 7. HEALTHY BUILDING OPERATIONS Use Renewable Energy Solar panels (BIPV) Geothermal heating and cooling system Energy efficient lighting Increase Water Use Efficiency Rainwater recovery Grey water recyc Thermal Comfort Airtight building envelope Controlled heat gain and losses Integrate Greens Vertical gardens Green facades Green roofs Ai Quality No toxic emissions (VOC and formaldehyde) Proper ventilation Day light and sunlight Appropriate per function, offices, households, hospitals, etc.
- 59. 59 Photos: Jeroen PM Mejer / Wikimedia Commons 7. HEALTHY BUILDING OPERATIONS: THE EDGE, AMSTERDAM The Edge is the most sustainable building in the world. It produces 10% more energy than it consumes Cleaning services are being optimized based on actual use of spaces. Health has been also in the focus Airflow management based on office occupancy and density Heating is tweaked to a precise degree to be able to save energy by detecting when spaces are unoccupied
- 60. 60 60 8. BUILDING INFORMATION MODELLING (BIM) BIM is a highly collaborative process that allows architects, engineers, real estate developers, contractors, manufacturers, and other construction professionals to plan, design, and construct a structure or building within one 3D model BIM is an important enabler of circular buildings. For instance, it fosters collaboration, transparency of data and supports materials choices in Reversible Building Design projects. Advantages of BIM Source: incide.it 1 Reduction of data duplication 2 Control of inconsistencies between different models 3 Optimization of costs and resources 4 Automatic update of the overall model 5 Inter- operability 6 Better collaboration between teams 7 Shorter project lifecycles 8 Improved facility management 9 Safer constructions sites 10 Visualization of the supercharged project
- 61. 61 61 9. MATERIAL PASSPORTS A MATERIAL PASSEPORT FOR A HOME: Material Passports provide the necessary information about materials, products and components for a circular use of building materials, products and components. It is another important enabler of circular buildings. Facilitate reversed logistics and take back of products, materials and components Increase the value of materials, products and components for recovery or reuse, or keep their value over time Create incentives for suppliers to produce healthy, sustainable and circular materials/building products Make it easier for developers, managers and renovators to choose healthy, sustainable and circular building materials source Source: Architect’s Journal
- 62. 62 62 10. LIFE CYCLE ASSESSMENT – LCA The environmental impact is caused throughout different stages of the life cycle such as: Raw material extraction Manufacturing Transportation Use Phase End-of-life To lower this impact, we must first measure it and that’s when Life Cycle Assessment comes into play It is an analytical tool which allows to quantify the impact of different materials throughout the life cycle stages well before a project is realized LCA helps to identify the hotspot materials and allows to find better alternatives with reduced impact CIRCULAR ECONOMY
- 63. 63 For this edition of our Emerging Trends series, LEONARD is partnering with the Circular Economy Research Center (CERC) of École des Ponts Business School (EPBS) to provide a synthesized and structured overview of the upcoming transition to circular economy and inspire adoption of circular economy principles in view of leveraging its full potential. This report provides a concise overview of the current linear landscape vis-à-vis emerging Circular Economy trends, practices, processes, regulatory frameworks and technologies, as well as a special focus on the construction sector and buildings to provide preliminary insights on relevant emerging circular economy trends. Trends and examples presented herein are representative, and by no means exhaustive. ABOUT THIS REPORT
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