Manufacturing and the circular economy

Manufacturers have the potential to play a key part in tackling the waste crisis. Connor Pearce reports.

A term that is gaining broader recognition to describe a new production paradigm is the circular economy, whereby products are produced from materials already in the market, rather than extracted from the environment, and when they reach the end of their life they are recycled, re-used, or returned to a productive capacity.

One person who is leading this shift is Veena Sahajwalla. A Scientia Professor at the University of New South Wales (UNSW) and director of the Australian Research Council (ARC) Centre for Green Manufacturing, Sahajwalla recently spoke to a collection of industry and community representatives at a forum on the circular economy in Gosford, NSW.

“I think the whole point about the circular economy is that we know that if we collaborate and come to together, lots and lots of great ideas will come through. But, also, it is important, for us, to listen – understand what the community sentiments are; what local governments and businesses are struggling with,” said Sahajwalla.

It’s no secret that the amount of waste and the cost of disposing it is a struggle. With Victorian recycler SKM going into administration, and then the appointed receivers, KordaMentha, receiving a $10 million loan from the state government, the scale of the waste crisis is unavoidable. Councils and recycling businesses point the finger at state government inaction, while state governments trumpet their circular economy policies as a way to reduce reliance on landfill.

Amid the blame game, manufacturing businesses are also major producers of waste, which is becoming more expensive to dispose of, and Sahajwalla notes that these businesses need to be heard from, along with those who are managing their waste, as part of the NSW Circular Economy network.

“That is part of the learning experience for us in terms of us being able to listen to stories of local producers, but also councils who have the waste. This is part and parcel of what the Circular Economy Network is all about: for us to be able to listen to all the stakeholders – the local governments, businesses, communities – and I think, then, if we all listen to each other, the synergies are already starting to happen, which I think is just fantastic,” said Sahajwalla.

Another network outside of NSW that has brought together industrial waste users and producers is ASPIRE. Spun out of Data61 – the digital research arm of CSIRO – and supported by Swinburne University of Technology, the app functions as a marketplace for manufacturers to sell their waste products and purchase materials that would otherwise go to landfill and use them to develop new products.

Cameron McKenzie, the CEO of ASPIRE, has seen the service grow rapidly since its launch and seen it expand the number of materials which pass through its network.

“A lot of metals – scrap metal, saw dust, coffee beans, a lot of organics from manufacturing. We’ve just had a vegetable packaging company come on the platform, and they spend $7,000 a month sending their product to landfill and since being on ASPIRE they’ve halved that,” said McKenzie, who noted that the materials have gone to a zoo, a piggery, and a wood chip manufacturer. “At the end of the day it stays out of the ground, it doesn’t get incinerated, and that’s the perfect outcome for us.”

While ASPIRE and the NSW Circular Economy Network are more recent solution to Australia’s waste, other companies have been repurposing complex products since they arrived on the market. Sharon Selwood is the general manager of TES-AMM Australia and New Zealand, the local arm of global IT recycler TES. As these products become more complex, Selwood has seen greater opportunities to extract value from E-waste, IT devices that have reached the end of their life.

“We work with notebooks, desktops, printers, you name it. A lot of IT products now have a very high percentage of plastics and metals and we are looking at how we can get value out of circuit boards and so forth. We’ve got some great processes to be able to do that and put that back into the manufacturing,” said Selwood.

Selwood describes the extraction of high value materials such as copper from discarded IT products as “urban mining”, and TES works to reintroduce these elements into new products.

“The industry is looking at how they can look at the commodities that are within that product and put them back into the manufacturing process.”

For Sahajwalla, this is the core of what the circular economy means.

“It is to recognise the materials and understand that there is a significant value attached to these materials. So how do you then get the best value out of those materials, whether it is metals or e-waste or steel, how do you make sure that we get it to the end user?”

Reviewing recycling
|Recycling unusable products is not at the top of the waste hierarchy, and sits just above disposal, perhaps the last step in the circular economy cycle. Instead, companies are beginning to think about where their product is going to end up before it is even produced. This thinking is coming under the umbrella term product stewardship, where the manufacturer of a product is responsible for where that product goes for its entire life. Such an attitude encourages a rethinking of the role of a manufacturer, according to McKenzie.

“If you create a product and you’re responsible for it at the end of life, you’re going to make sure that you can re-use it.”

In addition to recycling, TES- AMM provides consultancy services for OEMs and other manufacturers to understand how they can ensure their products can become part of the circular economy, and Selwood is seeing a change begin to occur.

“Attitudes are definitely changing for a lot of larger companies, but some of the smaller companies are not sure where to go or how they can do that.”

With increasing government investment and interest in the circular economy, McKenzie forecasts that there will be greater support coming for those companies that are beginning to adopt their own circular economy strategies.

“There’s a circular policy coming out in NSW, and what you’ll find is using an alternative approach or using different avenues to source your products is going to be either mandatory or voluntary.”

Being prepared for when this occurs, Sahajwalla is encouraging businesses to start thinking now about how they can re-evaluate their production processes.

“If you are a small business and you know that you have got a material, you can rather proactively look out for where there might be other businesses who could indeed benefit from the materials that you might consider waste,” said Sahajwalla, who noted that a shift in thinking around what the business makes could occur. “I am talking about the outputs from your business as being core products – there is the main product that you might make, but core products are really all the other materials that are coming out of your businesses which could potentially have value in the economy.”

McKenzie has seen this occur with the businesses that have come onto the ASPIRE platform.

“What happens, is there is a business on ASPIRE that has bought a lot of electrical goods, and with that the electrical products they get a lot of Styrofoam and a lot of carboard. That business normally has thousands of cubic metres of Styrofoam, and they upload that on the platform and there’s another business that needs Styrofoam and they turn it into thermal bricks. Their construction products are a by-product of another person’s business.”

In the case of ASPIRE, the platform’s developers play an active role in connecting businesses spread throughout metropolitan and regional Victoria, where the network currently extends to, and introduces a financial incentive for the re-purposing of what would otherwise be waste products.

“Any by-product of a manufacturing process, be it metals, plastics, rubbers, or water, you can find that on ASPIRE. So far it’s diverted 45,000 tonnes from landfill per annum, and it saves a manufacturing business on average $3,000 to $4,000 per year.”

For Selwood, making the connection between waste materials and product manufacturers is not as simple, yet with greater interest in utilising alternative materials, there may be an opportunity for local manufacturers.

“The biggest thing that we have to think about in Australia is that we don’t have a huge amount of manufacturing, and so for myself as a recycler in Australia, we need to bring those commodities down to a level to get them to the manufacturers cost efficiently.”

The opportunity for local manufacturing to grow based on the resource streams present in recycled materials is one that Sahajwalla is keen to promote, and while still in its early stages, the use of valuable materials closer to their point of use is an emerging issue.

“Rare earths are an example of a material that is absolutely critical to our economy. Strategic metals like cobalt, these are all present in our electronic devices; we are going to need these materials to be able to deliver a digital future. It is more than just thinking about recycling. And the other important point is to note that when you do recycle materials, you actually save energy,” points out Sahajwalla, citing the increased presence of copper on circuit boards when compared to when dug out of the earth.

“The amount of copper that you find on these boards is at least 10-20 found in the copper ore.”

Rethinking what is waste and what is a resource opens up opportunities for value adding in the manufacturing sector that harness the cost of transportation that Selwood has confronted.

“Because we’re branding it as a waste and it is ending up in landfill, we are labelling it as a problem,” said Sahajwalla. “Well, it is actually not a problem if you stop and ask the question, ‘What does it actually contain?’ This is where fabulous solutions can come up. And imagine if these expensive metals could be put back into our economy. We could be producing locally a whole range of electronic devices and systems and sensors.”

Product stewardship

The next step to making this happen goes back to the concept of product stewardship, with manufacturers who have to deal with the product at the end of its life thinking about how to make it easier to extract the value embedded in the product.

“Some manufacturers are now looking at how a product is assembled to make it easier to de-manufacture,” said Selwood. “At the end of the day, to be able to re-manufacture or use some of those commodities they need to be separated, and if you just shred those products you’re not going to get  a clean commodity separation.”

McKenzie highlights how a change in business model and design thinking spurred by other factors, such as the increasing cost of energy, could stimulate the circular economy.

“You want to be able to design the product so it can be recycled again. There’s no use in one cycle, it’s about trying to close the loop, so at the end of life it can simply be re-used or put back into another process. Once it gets to the end of their life, companies can take it back and just rebuild it back into their supply chain.”

With each step in the circular economy cycle requiring energy, re-use is one step beyond increasing the amount of time each product can be used for before it become obsolete. As Selwood noted, increasing the lifetime of a product, or choosing a product with a longer lifespan, goes towards reducing the cost of each product on the broader environment.

“We are seeing some expansion of lifecycles of IT equipment, whereas before, everybody would get a new mobile phone every 12 months, that lifecycle is now extending. Part of that is because a lot of what’s being done is in the cloud and not necessarily on the phone, desktop, or notebook,” said Selwood.

With the NSW government releasing its 20-year waste strategy by the end of 2019, and Victoria following suit, manufacturers can play a larger role in closing the loop.