The Circular Economy: fundamentals and new developments

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05/03/2015 Walter R. Stahel at Catalan EU Brussels

The Circular Economy: fundamentals and new developments; The Role of

Ecodesign in the Circular Economy. Catalan Delegation to the EU,

Brussels, 16 June 2015

Prof Dr h.c. Walter R. StahelVisiting Professor University of Surrey

www.product-life.org [email protected]

05/03/2015 Walter R. Stahel at Catalan EU Brussels 2

THE TOPICS

The Circular Economy (CE) –setting the scene, its hidden potential

EcoDesign (ED) – the pioneers of ED and oflife-cycle design (PE)

Designing sustainable systems solutionsSilos, the heritage from the industrial processA question of value preservation –

to reuse or to recycle?The Performance Economy (PE) integrates ED


In 2015, The Club of Rome published an I/O study on the impact of a CE and PE on the Swedish economy (five scenarios).

The findings are intriguing:Carbon emissions would go down an estimated 70%;employment would increase by more than hundred thousand jobs (3% of the work force).A second study analysing the impact on the Dutch andSpanish economy will become available in Summer 2015.

The hidden potential of the C.E.:GHG gas reductions and job creation

4

mio t GHG emissions p.a.

Performance Economy UK

Lifetime optimisation

Circular Economy UK

Source: WRAP

(2009)

Other options to reduce national GHG, UK, p.a.

830 mio t

550 mio t

05/03/2015 Walter R. Stahel at RESOURCE London

Reducing food waste

Dietarychanges

Public sector procurement

The range of C.E. opportunities

• Water cycles: atmosphere, steam engines, closed loop water cooling systems (car engine),

• Energy cycles (heat/cold): atmospheric clocks, IT server farms in the north, geothermal, process heat recovery for buildings and agriculture,

• Bio-economy cycles: nature, carbon- instead of petro-chemistry, enzymes reducing trees to fibres for low carbon papermaking,

• Physical capital cycles: reuse, repair, remanu-facture, technologic/fashion upgrade of goods; recycling; molecules and goods as services.


THIS TALK

A Circular Economy is managing manufactured stock (physical capital) and preserving its embodied resources (e,m,H2O)

Infrastructure, buildings, equipment, (durable) goods, catalytic goods (lub oils, solvents) through• Reuse and remarketing

e.g. 2nd hand markets, eBay, rent-a-wreck, • Repair, remanufacturing and re-refining

e.g. NASA’S space shuttle, catalytic goods,• Technologic and fashion upgrading, • and finally recycling atoms and molecules.

The C.E. complements the industrial economy, which still contributes with producing quantum leap innovation, in e.g. information-, bio- and nano-technologies. 605/03/2015 Walter R. Stahel at Catalan EU Brussels

Copyright: Walter R. Stahel 2011

RESOURCE SECURITY

JOB

CREATION

GHG EMISSION REDUCTION

SUSTAINABLE

TAXATION

C.E.

712/2/2014 Walter R. Stahel at AAAS 2014 Chicago

The role of policy: Sustainable taxation is a booster to increase - resourcesecurity,

- job creationreduce- GHGemissions

through a CE.

Drivers of the C.E. in the 21st centuryin industrialised countries

• Saturated markets for most goods, (n° of goods sold equals n° scrapped),

• Components outlive goods – reuse options(electric motors, microchips, VIP panels, LED),

• Ageing populations and its silver workers,• Ageing infrastructure need repair R&D,• Fears of resource scarcities /price jumps,• Intelligent decentralisation (3D print, repair cafés,

energy autonomous buildings),• Science and innovation, see next slide.


The role of ED and Science in closing loops

In a modern car, you have up to twelve different steels.

The ISDA 1992 Eco-Design principles state:• use recycled materials.• use commonly recyclable materials.No modern cars? nor solar p.v. panels? nor offshore windmills? nor IT?• make it simple to separate the recyclable compo-

nents of a product from the non-recyclable ones.No metal alloys? No nanomaterials in clothing?

Or learn to de-alloy metals, de-polymerise polymers, turn plastic waste into granulate?



THE TOPICS


EcoDesign (ED) – the pioneers of ED and oflife-cycle design (such as PE)



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Bialetti 1930s

Engineering is the art of eliminating parts, 1900Charles Brown, founder and CEO of BrownBoveri Co

Good design has always been ecodesign, 1990Günther Horntrich, designer, Yellow, Cologne

The fathers of ECODESIGN


And last but not least: anonymous design fulfilling real needs (utility, function)


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The rules are the same for all actors, the better system will win.


Pioneer manufacturer: modular furniture strategy 1963 – buy-back of furniture.

USM Haller

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Pioneers: The 12 Eco-Design Principles, IDSA, 1992

• Make it durable.

• Make it easy to repair.

• Design it so it can be remanufactured.

• Design it so it can be reused.

• Use recycled materials.

• Use commonly recyclable materials.

• Make it simple to separate the recyclable components of a product from the non-recyclable components.

• Eliminate the toxic/problematic components of a product or make them easy to replace or remove before disposal.

• Make products more energy/resource efficient.

• Use product design to educate on the environment.

• Work toward designing source reduction-inducing products (i.e. products that eliminate the need for subsequent waste).

• Adjust product design to reduce packaging.


1995


Pioneer design to sell performance, goods as service

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Pioneer politics: 2008 EU waste direct. 2008/98/EC

Prevention: measures taken before a substance, material or product: has become waste, that reduce the quantity of waste, including through the re-use of products or the extension of the life span of products (including waste oils).

Re-use means any operation by which products or components that are not waste are used again for the same purpose for which they were conceived.

Preparing for re-use means checking, cleaning or repairing recovery operations, by which products or components of products that have become waste are prepared so that they can be re-used without any other pre-processing.

Re-use and repair networks, Member States shall take measures to promote the re-use of products and preparing for re-use activities, notably by encouraging … re-use and repair networks, …(art. 11).



THE TOPICS





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Systems innovation

instead of product

innovation, combined

with intelligent

decentralisation!

Lighthouses have done

more for the safety of

shipping than any

improvement to ships.


Pioneer

systems

design

DOING

THE RIGHT

THING

ICE1 – an electric steam train

ICE4 – decentralised traction


The system design issue:PTS plane transport systemvs. aircraft tractor (factor 10)


Private Finance Initiatives (PFI)Le Viaduc de Millau,selling performance

a 2001 78-year contract to design, finance, build and operate the bridge till 2079, with a maintenance contract until 2121

Le pont de Millau, France2105/03/2015 Walter R. Stahel at Catalan EU Brussels


THE TOPICS





Drivers of today’s linear industrial economy:

growth means more throughput

resources materials manufacturing distrib. P.O.S. use waste

micro-economic profit optimisation P.O.S. depreciation zero

The manufacturer’s liability for industrial goods concerns the manufacturing quality . Property and liability are transferred at P.O.S. to the CONSUMER (risk) and the State (waste)

zero-life products


waste managersmanufacturersresource

managers

series of steps of value added

Can Ecodesign reach “the other side ”?

The divide of an industrial and a circular economycorporate strategy (IPR, technology, capital, RoI)marketing, legislation consumer-owner userKonstrukteur DESIGNER waste collectorsprocure (material cost) waste managersmanufacture (labour cost) waste recyclers


PoS


THE TOPICS



Designing sustainable systems solutionsSilos, the heritage from the industrial processA question of highest value preservation –


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Managing performance over time - The Circular Economy:

reusing goods, remanufacturing goods and components (loop 1)

and reusing molecules (2)

reuse remarketing

Reusing molecules

Remanufacturinggoods

Source Stahel/Reday, 197605/03/2015 Walter R. Stahel at Catalan EU Brussels

The

gre

at p

rofit

div

ide

Recycling

Business opportunities for Waste Managers:reuse or recycling? a question of value!


“WASTE” “WASTE” MANAGERS

HIGH VALUE PRESERVED EQUAL PROFIT LOW

C.E. reuse repair remanufacture upgrade recycle

e.g. garments, bottles, EEE, furniture, aircraft seats

to reuse or to recycle?

sorted intact solid waste

Also: unsorted solid waste (food, packaging, paper, plastics, oils), liquid waste, sewage (detergents, urea, Phosphorus, Nitrates)

non-destructive collection


De-constructing buildings: labour intensive!The ANA Intercontinental Hotel in Tokyo

LABOUR

Also power stations, windmills, oil platforms


THE TOPICS





Circular Economy: 1 driven by economics, 2 counterintuitive to most economists; 3 the PE is its most profitable business model

A CE has it own rules:• the smaller the loops the more profitable and

resource efficient they are (e.g. local reuse),• loops have no beginning and no end

(but one objective: value preservation), • the low speed of the circular flow is crucial, the

law of reverse compound interests applies,• It substitutes manpower for energy and

material resources,• It manages (manufactured) stocks , not flows.


Integrated Ecodesign and sufficiency

The divide of an industrial and a circular economycorporate strategy (IPR, technology, capital, RoI)marketing, legislation consumer-owner userKonstrukteur DESIGNER waste collectorsprocure (material cost) waste managersmanufacture (labour cost) waste recyclers

Design, an integrated function in performance ecoWhole systems design for lowest life-cycle costsmarketing, DESIGN, take-back logistics & reuse, in-house repair-remanufacturing-recycling skills


PoS

Outside the realm of Ecodesign?The Business Models of the

Performance Economy:a guarantee for quality and value


Retained ownership

OEM skills

O&M skills

Fleet managers selling goods as services:transport, hotels, rental goods, real estate

OEMs selling performance :Michelin, RR, textile leasingXerox, PFI, Space X,

OEMs selling molecules as services :rent a molecule,chemical leasing,licence to mine

Performance guarantees : commercial freezers, lifts with service contract, lifelong product guarantees Copyright Stahel 2015

Three options: drivers, objectives, tools

1 IDSA 1992 2 Xerox selling 3 innovativein an I.E./C.E. performance solutions

Drivers• legislation? competitiveness different think• cost minimis. stock (asset) m. innovationObjectives • waste prev. preserved value better solutions • closing loops modular/stand. sufficiencyTools• ED by law? life cycle optim. systems design

integrates ED ignores ED ?05/03/2015 Walter R. Stahel at Catalan EU Brussels 33

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Dr h.c. Walter R. Stahel, Visiting Professor, University of SurreyFounder-Director, The Product-Life Institute, Geneva

www.product-life.org, [email protected]


The Circular Economy: fundamentals and new developments

Environment

industrial economy

circular economy ce

spanish economy

swedish economy

catalan eu brussels

bioeconomy cycles

performance economy

n of goods