Accelerating the Circular Economy in New Zealand.
Moving from waste management to material optimisation.
To achieve SBN’s vision for the Mega Efficiency Transformation Area of being a world leader in the optimal use of all precious resources we need a fundamental change in the way we use them.
The Circular Economy is one of the few viable and scalable growth models that can achieve such a transformation and in the process drive greater innovation and job creation.
Essentially a circular economy is one where companies manage all resources as valuable assets. The lifecycle of products is maximised, utilisation optimised and at the end of life of a product all materials are fully reutilised. This is achieved by designing and optimising products for multiple cycles of disassembly and reuse, and eliminating waste throughout various life cycles and uses of products and their components. A circular economy aims to move away from a traditional linear ‘take-make-waste’ model.
Growth is, therefore, decoupled from the use of scarce resources by organisations adopting business models based on such things as longevity, renewability, reuse, repair, sharing and dematerialisation.
The Circular Economy shifts the emphasis from driving more volume to rethinking products and services through all elements of the customer value proposition to prepare for the inevitable and increasing resource constraints.
At a macro level in New Zealand the Circular Economy is very much in its infancy. The system is partly connected by material flows, however in many cases it is uncoordinated with decisions made in relative isolation having unintended detrimental consequences further down the chain. On a more micro level there is plenty of evidence of circular economy thinking such as product stewardship schemes, ‘closed loop’ practices and the emergence of collaborative consumption models. The challenge is to build on these pioneering practices so these models become the norm as opposed to the exception in New Zealand.
To accelerate the Circular Economy in New Zealand we have identified, via The Big Shift process, six key focus areas and associated potential pioneering business concepts that could hold the key to moving us from merely managing waste to truly optimising our resource use.
It is fundamental that product design incorporates ‘circular’ thinking and avoids locking-in linear pathways from the outset. This means that products need to be designed for longevity, incorporating the ability to repair, upgrade, reuse and disassemble so at the end of life precious materials can be harvested and reutilised.
- Materials index app: enable product designers to make more informed decisions on material selection in relation to key circular economy indices e.g. durability, recyclability and toxicity.
- Material challenge: online challenge platform where organisations list waste resources and ‘challenge’ people to design new and innovative uses for them.
Demand for circular solutions is not currently at a sufficient level to be a driver for many organisations to change their existing linear offerings. Yet waiting for consumer ‘pull through’ will not get us where we need to be fast enough. Pioneering organisations have the opportunity to grab early mover advantage and shape the market to make longevity, upgrading, repair and reuse desirable. They can provide more innovative ways of addressing customer needs without relying on selling them more stuff. From a business-to-business perspective, ‘end of life’ solutions and a focus on ‘whole of life’ costs as opposed to initial cost need to be core parts of procurement policies.
- Deposit scheme: incorporate a deposit element into the price charged for a product, which is repaid to the customer when the product is returned at the end of its life. This enables a lower net price to be charged based on the fact that value can be extracted from the product at the end of its life.
- Longest lasting awards: campaign to share and promote how long products have lasted, with awards given to both users and brand owners of products that provide the greatest length of service.
- Sell back platform: a simple and accessible platform for owners to sell back products to manufacturers.
- Circular feedback loop: creation of an app to allow instant feedback to brand owners from customers on all circular aspects, for example, “I did / didn’t buy your product because……..”.
- Custom Products: enable the customisation of a currently mass-produced product to become ‘produced to order’, increasing the value of the item plus eliminating unnecessary production volumes.
Even if a product is modularly designed for disassembly, in a country with a geographically dispersed and small population the infrastructure necessary to complete the circle on the product may not exist, or be accessible or currently viable. We need to be smarter on how we use what we’ve currently got and achieve scale to make new solutions viable.
- Mapping ‘gold’: online map of where current waste resources can be found in a city.
- Fix it: online platform providing repair manuals and selling tools and spare parts to allow customers to repair their own products.
- Slow mail logistics: create a non-time sensitive delivery mechanism and service to get end of life products back to a place where they can be utilised at an affordable rate.
- Return to prison: an initiative where prisons and inmates are used as repair/refurbish hubs for products at the end at end of life.
An illustrative example of why rethinking ownership is fundamental to a more Circular Economy is the drill. If you consider the number of households in New Zealand that own a drill, the average use of a drill over its lifetime, which is only 20 minutes, and the fact that it’s not the drill that is needed but the actual hole it creates, this illustrates the current underutilisation and unnecessary duplication of resources that ownership of assets can produce.
Increasing examples of businesses based on new models – such as the sharing economy or collaborative consumption and ‘product as a service’ – are encouraging customers to rethink ownership.
- Product as a service: a programme to remodel a business to enable a transition from selling products to selling a service.
- Library extension: utilise library infrastructure and systems to extend their product offerings beyond books and DVDs to other items such as drills.
- ‘Sharing’ schools: use schools as community hubs for borrowing everyday items such as lawnmowers, with the revenue split between the school and owner of the product.
- Sharing Map: display what and where items can be borrowed around the city - a sharing version of Trade Me.
Emerging technology is opening up new opportunities to facilitate more circularity. We’ve seen the internet being an enabler for the sharing economy and now the fast emergence of 3D printing is facilitating local production to order as opposed to mass production for prospective orders. In addition, 3D printing has the ability to prolong life cycles of products by being able to print out spare parts. A better understanding of how organisations can incorporate such technology into their businesses is key to gaining the scale required to realise the benefits.
- 3D printing challenge: a public challenge to create the most useful item from 3D printing technology to promote awareness of potential solutions the technology can offer.
The final leverage point is Legislation and although we are not focusing on this area it does have a significant role to play. There is progress on Government intervention in electronic waste in New Zealand and in the UK a recent cross party report recommends lowering VAT (Value Added Tax, or GST) on recycled goods, which would be a game changer.
One of the key projects the SBN is working on currently is to create Circular Economy Model Offices (CEMO).
The objective of the CEMO project is to promote a ‘circular’ solution to office fit outs by establishing a ‘Circular Economy’ industry accepted specification and guide for the hard fit out of an office building and demonstrating the specification via fitting out and profiling pilot office sites.
For more information or to get involved please contact email@example.com