Europe circles the circular economy

Jumping from a linear economy, in which materials and products are used once and then discarded, to a circular one, where products are designed to be recycled and their raw materials endlessly reused, has become a goal—a lofty one—for the European Union.

Backers see the circular economy as a win-win for the economy and the environment. Successful implementation could offset the European chemical industry’s lack of fossil-fuel-based feedstock while also meeting the region’s ambitious environmental goals. Critics call the concept idealistic and unworkable.

Either way, EU regulators are now in negotiations to develop waste-related regulations as a first step to a circular economy in the region. The European Parliament will vote on whether to adopt the regulations in the fall.

Rare bedfellows, the chemical industry and environmental activists both welcome the circular economy, but as recent clashes between the parties show, they have very different views on how it should be implemented.

The European Chemical Industry Council, or Cefic, Europe’s largest chemical industry association, likes the idea of being a first mover on the circular economy. The concept could provide the cheap raw materials the European chemical industry desperately needs, but it also presents major risks, said Peter Smith, Cefic’s executive director of product stewardship, speaking recently at the Helsinki Chemicals Forum in Finland.

“The devil is in the details,” Smith said. One devilish detail is which chemicals would be included in closed-loop recycling systems and which would be excluded on grounds that they present an unacceptable hazard to society. Inclusion or exclusion should be made on a case-by-case basis by looking at costs and benefits, Smith said.

Some environmental experts, though, want tough rules to apply from the outset. “Circularity alone could even increase problems when you have hazardous materials,” said Axel Singhofen, an adviser on health and environment policy to the European Parliament. “Toxics out, then recycle; not the other way around,” said Singhofen, who advocates excluding flexible polyvinyl chloride (PVC) and other chemicals from recycling systems.

Environmental activists say the 169 substances of very high concern,which include some phthalate plasticizers used in flexible PVC, that are already controlled under the EU’s Registration, Evaluation & Authorisation of Chemicals (REACH) chemical management law, should be automatically excluded from recycling systems under any circular economy legislation.

Many other chemicals—fluoropolymers and nanotubes, for example—have good properties but also unwanted qualities, so traceability is needed, said Mari Puoskari, strategy director for Nordic waste recycling firm Ekokem.

But industry executives at the Helsinki forum indicated that they aren’t about to be steamrollered on the issue. Giuseppe Malinverno, Solvay’s head of government and regulatory affairs, called out from the audience floor during an on-stage discussion to tear into Michael Warhurst, executive director of CHEM Trust, a U.K. environmental group.

A visibly angry Malinverno lambasted Warhurst, an environmental activist and chemist, for naming companies that he said had failed to substitute known hazardous substances in their products. “We’re not producing just for fun,” Malinverno said.

Ultimately, though, the chemicals to be included in—or excluded from—closed-loop waste streams will be decided by regulators. The European Commission’s broad thinking on the topic is that the region could extend its behemoth REACH regulation to manage chemicals in waste recycling streams.

In essence, Europe would create a hybrid chemical manufacturing and waste management regulation, said Bjorn Hansen, head of the European Commission’s chemicals unit.

Geert Dancet, who runs the European Chemicals Agency (ECHA), the body responsible for implementing REACH, proposed that ECHA could become the body responsible for overseeing the tracking of chemicals in a circular economy. In this role, ECHA would provide information about exposure to chemicals to help evaluate their suitability for recycling, Dancet said.

But Cefic questions whether a REACH-style approach would be suitable. For example, in certain recycling systems, substances of very high concern may be diluted to such an extent that they no longer present a risk, Smith said.

Cefic also complains that a recent EU proposal to align waste management legislation with the circular economy doesn’t go far enough to remove barriers that prevent waste from being reused as raw material. “The proposal should have been more ambitious,” Cefic said in a recent comment on the proposal. Criteria for enabling the reuse of post-consumer residues should be reassessed so that valuable resources can be returned to the production process, it argued.

Beyond the question of what to recycle, the circular economy raises questions about how to recycle. The role of chemists and the chemical sector would be to develop novel materials that can be readily separated or novel processes for separating existing materials, such as the depolymerization of plastics. “This needs research, and we could help,” Smith said.

Funding for such research is already available in Europe via the Horizon 2020 research fund. This year and next, the EU will provide a total of $60 million to finance the development of technologies that support a circular economy. A further $400 million will be allocated to resource-saving processes.

Efforts to create a circular economy are already under way in parts of Europe, especially in the Netherlands and Scandinavia. For example, Swedish construction firm Skanska already applies circular principles to some building projects. The company’s biggest challenge is determining which substances are suitable for recycling.

“Our suppliers are the key. We need them to develop green products and provide clear and easily understood information,” said Eva-Lena Carlén-Johansson, sustainability program manager for Skanska.

The firm recently built a $1.9 billion hospital in Stockholm designed to be completely recycled at the end of its useful life. The client sought to avoid both PVC and phthalate plasticizers, Carlén-Johansson said.

For the project, a Skanska supplier, Hilti, developed an injectable tile mortar that is free of acrylates and has reduced dibenzoyl peroxide content. Advantages are that the mortar is not classified as hazardous waste and construction workers don’t have to wear protective clothing, Carlén-Johansson said.

Skanska has created a database of the materials used to build the hospital so that all components can be recycled. “This is an important approach for the circular economy,” Carlén-Johansson said.

In another move to reorient construction materials toward the circular economy, the chemical maker Saudi Basic Industries Corp. (SABIC) collaborated with the U.S. architect William McDonough and the building design firm WonderFrame on buildings made from polycarbonate sheets and aluminum that can be disassembled and reused.

The partners have used the approach to construct a building near Amsterdam in an area dubbed Circular Valley. Here, companies, the local government, and nongovernmental organizations are working together to convert the area into a “living lab” and international hub for testing approaches to the circular economy, SABIC said.

Other circular economy initiatives are also in play. Earlier this year, the U.K.-based Ellen MacArthur Foundation, created by former yachtswoman Ellen MacArthur and headed by former McKinsey & Co. partner Andrew Morlet, introduced a circular economy initiative for companies in the plastics value chain. Named the New Plastics Economy, it sets out a three-year program for consumer goods firms, packaging producers, plastics companies, and chemical firms.

The initiative seeks to create a mechanism for bringing all links of the value chain together and rethinking packaging materials and postconsumer handling. More than 40 companies have signed on, including Dow Chemical, Coca-Cola, and Unilever.

According to the foundation, the program is not just an exercise in being green but a way of recouping some of the 95% of the value of plastic packaging material, worth as much as $120 billion, that is lost annually as waste. A 2012 McKinsey report stated that EU manufacturing could realize net raw material cost savings of up to $630 billion annually by deploying a circular economy approach.

“We know this is the right thing to do for the environment, and there is also an opportunity to create value for business,” said Neil C. Hawkins, head of sustainability for Dow.

Dow recently took a step forward in this field with the introduction of polyethylene for making food packaging pouches that are fully recyclable. Standard pouches feature ethylene vinyl alcohol or polyamide barrier layers that won’t finely disperse in polyolefins during recycling. Dow’s approach is to use reactive polymer modifiers that coat polar components of the barrier layer to help it disperse during recycling.

“Technology is a key enabler in closing the loop,” Hawkins said, cautioning that society must be realistic. “Due to the complexity and cross-sector collaboration requirements to support a circular economy, adoption of this practice takes time.”

But not everyone considers the current approach to the circular economy to be robust enough to deliver truly sustainable resource reuse.

“Definitions of circular economy can be watered down to be almost anything that relates to an environmental agenda,” said Michele Field, an independent environmental consultant based in the U.K. “At present, organizations that commit to a circular economy approach do not need to meet any tight time goals or standards.”

It’s far from clear whether the circular economy will become a system Europe uses to transition to a new manufacturing paradigm or whether it will end up as just another environmental buzzword. But for now, the circular economy merry-go-round is turning. It’s an approach to sustainability on which European regulators, environmental activists, and even businesses are looking to hitch a ride.