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Circular Economy As A Means Of Achieving Sustainable Development

What is circular economy? Why is Circular Economy important to achieve Sustainable Development? In this article we examine three different industries in terms of how sustainable development is achieved in them by incorporating circular economy principles.

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“If one country lags in some natural resources, it can import it from another. If a nation has extra, then they can trade with another. But, If the earth is exhausted of a resource, it cannot trade with another planet for it.” Wallace-Wells, 2019

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Human Beings are known for exploiting natural resources to create new forms of luxury, commodity, business, or fashion. With the advent of industrialisation in the past few decades, the exploitation process has become so obvious that the impact of these processes has been ignored. In recent times, the environmental, social, and economic impacts of industrialisation have affected several businesses.

Hence, the words “Sustainable Development (SD)” and “Circular Economy (CE)” have become highly significant. This article will surely assess the quality of the concept of Circular Economy as the way to achieve sustainable development. It will critically examine three different industries in terms of how sustainable development is achieved in them by incorporating circular economy principles. To begin with, the meanings of these terms are briefly highlighted here.

Sustainable Development is the economic progress that happens without causing any harm to the environment (including flora and fauna), and depletion of natural resources.  In Brundtland Commission's report (1987), it is defined as "meeting the needs of the present without compromising the ability of future generations to meet their needs."

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Circular Economy in our current economy, we take materials from the Earth, make products from them, and eventually throw them away as waste – the process is linear. In a circular economy, by contrast, we stop waste being produced in the first place.

The circular economy is based on three principles, driven by design:

  • Priorities Renewable inputs
  •  Maximize Product Uses (at their highest value)
  • Regenerate nature (Recover descendant and squander)
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CE 1

 

It is underpinned by a transition to renewable energy and materials. A circular economy decouples economic activity from the consumption of finite resources. It is a resilient system that is good for business, people and the environment. 

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model “where materials and products are reused for the longest possible time in closed-loop systems” (Mendoza, Gallego-Schmid and Azapagic, 2019). This means that most commodities are reused and/or recycled multiple times before disposal. It results in the reduction of manufacturing new products (using raw material from natural resources), thus reducing the exploitation of natural resources.

In other words, circular economy is a closed economic model in which goods and services are produced sustainably by reducing the consumption of resources and waste. Therefore, circular economy contributes towards achieving Environment and Economic Sustainability which leads to Sustainable Developments.

Or we can say in single line “The goods of today are the resources of tomorrow at yesterday's resource prices”.

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1. The Mining Industry 

Mining is the process of extracting raw material from the earth. The raw material could be a rare metal (like Platinum, gold, Uranium), a fuel (like Oil, coal) or an ornamental stone (like marble). The mining industry has contributed to the development of mankind for thousands of years. The environmental impacts of mining begin a lot earlier than the extraction process starts. Before mining, exploration activities are undertaken, which involve geophysical surveys, sampling, and drilling. All these activities have significant economic and environmental impacts and should be considered while measuring sustainable development. The fact that we often mine significant amounts of ore, and that only a small fraction of the material extracted from it is shipped out of the mine can be a "product", the mine can clearly have a large environmental impact. If not properly planned and managed, mines can create large waste deposits, which poses a huge environmental hazard. Therefore, the incorporation of circular economy is of utmost importance in the mining industry to achieve Sustainable Development.

To investigate the potential of circular economy integration in the mining industry, a workshop and some semi-structured in-depth stakeholder interviews were organised. The core idea was to identify the drivers/opportunities, needs, and challenges of CE in the mining and metallurgy industry. The outcome of these events was recorded and critically analysed. It was observed that the products of the mining industry are precisely recyclable and indestructible. From the answers of various stakeholders, Kinnuen and Kaksonen in 2019 found that due to the lack of clarity of the concept of CE among the stakeholders, the mining companies never considered incorporating these new approaches in their operations. The investigation would have been more impactful if it had a questionnaire that asked the stakeholders about the restoration of mined sites after the completion of the extraction process.

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Based on the interview results, two highly impactful areas in the mining industry where the concept of circular economy can create the pathway to achieve SD are:

  • Recycling of the waste produced after mining

    Extensive long-term strategies are needed to move the mining industry toward SD. Since mining is an important part of the economy of many countries, it is practically impossible to avoid the creation of post-mining waste. “Applying circular economy thinking to mine waste presents a major opportunity to reduce the liability and increase the value of mining waste”. Exclusive waste management solutions must be designed for each type of mining, namely: Ores, Coal, Oil, and Natural gas. In this way, the best solution for the generated waste to be safely managed or re-used can be found. Moreover, materials can be kept at their maximum value and functionality. In addition, the most important task is to communicate the quantitative benefits of these solutions to the investors in the industry because they must pioneer the actions.
  • The usage plan of the mining site, after the completion of the extraction process

    Since minerals are finite, the mining process must stop one day. An economic plan to restore the site after the mining has stopped has to be designed right at the start of the project. Hence, to ensure SD in mining, miners and governments must find ways to ensure that funds are available before, during, and after mining operations to cover decommissioning costs. However, continuous monitoring of mining activities and pressure from NGOs and civil society are essential to maintain pressure on mining companies and governments to ensure environmental protection. The risk of relapse in good governance obligations (both for miners and governments) is always a risk; especially in times of economic recession, it is always present.

2. The Agriculture Sector

With an ever-growing population, the demand for food is rising exponentially, and hence the agriculture sector is now an industry where goods and services are traded. “The modern agricultural system is wasteful, with Europe generating 700 million tonnes of agri-food (agricultural and food) waste each year” (Toop et al., 2017). Intensive research was conducted at Agricultural Centre for Sustainable Energy Systems (ACSES) at Harper Adams University on how the concept of circular economy can be incorporated into the agriculture industry. From the results of this study, it is evident that the waste can be utilised for the generation of energy using a small-scale Anaerobic Digestion (AD) process. In this process, organic matter in Plant and Animal waste is decomposed in the absence of oxygen. Scientifically, this process is found to have several environmental benefits. Moreover, the Biogas released during the process can be used to provide heat, generate electricity, and power cooling systems. In addition, the residue left after the process, called Digestate, can be used to manufacture Bioplastics and several other applications. (Environment Protection Agency, 2022). The figure below illustrates different types of organic waste and their applications. 

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Hence, the Agri waste is valorised to a great extent, which is the primary objective of circular economy.

However, the study fails to analyse the negative impacts of decomposed matter from AD on soil microbes. Moreover, a critical evaluation of the feasibility of the process needs to be done in terms of Environment, Economy and Society to achieve SD. 

3. The Energy Industry

Energy is one of the indicators of development of a nation since all other activities depend upon Energy Supply. In the United Nations Development Program’s Human Development Report (2008), the author Amie Gaye mentions access to modern services as a fundamental social need. As the demand for energy keeps increasing, conventional sources used to generate electricity (coal, natural gas, etc.) are near to exhaustion. Moreover, the use of these sources has made a negative impact on the environment and acted as a catalyst in climate change. With the transition to Renewable Energy speeding up in recent times, the opportunities of incorporating CE are also rising. The key areas inside the Energy Industry where circular economy can be incorporated are: 

  • Wind and Solar Power Generation Plants

    As wind and solar power plants are expanding rapidly in several regions, so is the scope of incorporating circular economy in these areas. As India is blessed with a coastline of about 7600 km surrounded by water on three sides and has good prospects of harnessing offshore wind energy. Considering this, the Government had notified the “National offshore wind energy policy” as per the Gazette Notification dated 6th October 2015.  A techno-economic study about integrating circular economy into Renewable Energy Industry was conducted in India, a region in Gujarat with a high potential for Wind Power. The recent assessment indicates a gross wind power potential of 302 GW in the country at 100 meter and 695.50 GW at 120 meter above ground level. The results showed that the net profit of integrating the power production peaks of variable renewable energy into CE outweighed the annual economic benefits of power exports, the partly electrified transportation sector and district heating. Therefore, the value gained from circular process products improved the value of the renewable energy system, hence encouraging renewable energy investments in the region. However, this study was limited to the usage of Renewable Energy during peak demand. The study of the circularity of the materials used in wind turbines and solar panels, which is an important aspect of circular economy is not considered in this study.

    Some of the materials used in Wind Turbine Blades and Solar Panels are made from rare earth minerals (such as neodymium, dysprosium, indium) and reusing them can have a positive effect on the environment. The recycling and reuse process is economically viable and can lead to opportunities for new start-ups. For instance, NREL, a USA based organisation designs strategies and implements them specifically for recycling and reuse of materials in the Energy Industry. 

  • Batteries in Electric Vehicles

    Electric Vehicles (EVs) are gaining popularity in recent times, due to the hike in fuel prices and impact on air quality due to the use of conventional transport systems. EVs use Lithium-ion batteries to store energy, which is then used to run them. Since EV batteries deplete over time, they can be reused in various other sectors after they are completely depleted. In a study conducted to assess the environmental impact of the reuse of EV batteries, it was found that the overall environmental sustainability of the two systems can be improved by reusing spent batteries as stationary storage systems in residential structures. However, it is not conclusive from this study if the batteries can be disassembled at a low cost for reuse. Hence, the economic benefit of the reuse of these batteries is unknown. In another study about the design of EV battery packs conducted in Italy, it was found that the usage of House of Quality (HoQ) as the design tool helps the manufacturers make the batteries easy to disassemble after their end of life, thus making circular economy incorporated into the EV industry. As a result, batteries can be easily disassembled for reuse. Therefore, SD can be achieved by incorporating Circular Economy in the EV industry, by making design changes during the manufacturing process of the batteries.



    The below infographic shows how circular economy can be incorporated into the supply chain of the Energy Industry.

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  • The common ground for Circular Economy

    All the three industries analysed in this paper have a common point of reducing, recycling, and reusing the waste generated from the respective industries. Reducing the waste going to landfills is of prime importance concerning environmental sustainability. If we dispose of waste in landfills, it results in greenhouse gas emissions and contamination of air, water, and soil. Moreover, when new reuse and recycling methods are developed, the scope for new businesses rises, thus ensuring economic and social development. Therefore, waste management strategies are of prime importance in any industry.

How do we transition to Circular Economy?

The goal of Circular Economy is to create closed loops in which the complexity and usefulness of a product are preserved for as long as feasible, rather than breaking a product down into its fundamental ingredients after each usage cycle. Because most of the product's worth is found in its utility and intricacy, setting up this new system necessitates a systemic shift: a disruption of established patterns and habits, as well as a shift in producer and consumer behaviour). Different sorts of products and services are required, as well as a new legislative framework and increased human engagement. Digitisation and new technology assist in this, allowing us to accomplish things we previously could not. It enables us to create things in new ways, manage products more sustainably, and reuse, repair, and share them. Durable items that can be repaired, reused, remanufactured, and recycled are essential in a circular economy, as are products that use fewer and less scarce materials in the first place (Murray, Skene and Haynes, 2015). Circularity can only be achieved if products are designed circularly. Hence, redesigning existing products and processes is essential. Moreover, current regulations are still based on trash management, but in a circular economy, the concept of "waste" is phased away as goods are intended to avoid waste and residues are recycled into new resources. Waste policies and product policies become intertwined, and the ensuing new rules must encourage the formation of circular enterprises while facilitating circular material flows.

Conclusion

The incorporation of Circular Economy concepts in any business can help the business leap Sustainable Development. There is a need for “Systems Thinking” to be incorporated within the key procedures of business activity (Murray, Skene and Haynes, 2015). The redesign of products during the manufacturing process can add a lot of value during the end of life of the product. Moreover, a Life Cycle Assessment (LCA) can be used as a tool to assess the environmental sustainability of circular systems. Guidelines of ISO 14040 and 14044, if followed strictly, can add credibility to the process. There is a scope of new innovative businesses to start, whose model will be based on circular economy. However, government policies and regulations should not act as a barrier to these budding start-ups. On the other hand, the driver for large organisations to incorporate Circular Economy in their business model can be “to cope up with the volatility of raw material prices”. 

The concept of circular economy is not limited to businesses. Any individual can contribute to SD by incorporating Circular Economy, even if they don’t know these concepts. The Japanese 3R concept (Reduce, Reuse, Recycle) can be applied to our daily life as well. Following simple rules like separating waste at home, reusing plastic bags, turning off appliances when not in use, buying used electronics instead of new ones can make a huge difference in contribution to SD (Korsunova, Horn and Vainio, 2021).

This essay is an attempt to assess the quality of Circular Economy incorporation into different industries. By assessing the quality, we can draw a few conclusions on how SD can be achieved. By embedding Circular Economy into business models of several industries, we can reduce the burden on the earth, prevent pollution, secure resources for future generations, and create new economic activities. Circular Economy can act as a base for new forms of technology, business, governance, and advancements. Hence, all three pillars of sustainability can be strengthened. Therefore, SD can be achieved by using Circular Economy as the means.

The article is Authored by Mr Rajeev Kumar, Young Professional, Atal Innovation Mission, NITI Aayog and Mr Phani Kumar, Sustainability and Energy Assistant at University of Bradford, UK.

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