Keywords

1 Global Imperative

Globally, both the use of natural resources, particularly materials (including chemicals), water and energy, and the discharge of wastes, to land, water and air, have trespassed the finite carrying capacity of the planet (see e.g.: UNEP 2011b; UNEP 2012). Since the turn of the millennium, this is increasingly noticeable at the global and local levels. Weather patterns started to change; water is becoming increasingly scarce; ecosystems are in decline at land and at sea; an increasing number of megacities is choking in air pollution; chemicals are accumulating in food chains; litter is turning remote oceans in plastic soups; etc. Using global hectares as a proxy indicator for the environmental impacts of consumption and production, currently, the world consumes about 1.6 times what the Earth can sustainably provide and absorb in the long run (WWF 2016). It is projected at least two planets Earth are required by 2030 if current trends continue. The link between human well-being and economic development on the one hand and the increased use of natural resources and environmental impacts on the other hand needs to be broken, a notion referred to as ‘decoupling’. The International Resource Panel (IRP) highlighted the urgency to combine ‘doing more with less resources’ (resource decoupling) with ‘doing more with less pollution’ (impact decoupling) (UNEP 2011a). Decoupling of resource consumption and environmental impact generation is central to both Resource Efficiency and the Circular Economy. As summarized by the IRP (Ekins and Hughes 2016), the term ‘Resource Efficiency’ is generally used to encompass a number of ideas: the technical efficiency of resource use (measured by the useful energy or material output per unit of energy or material input); the resource productivity or extent to which economic value is added to a given quantity of resources (measured by useful output or value added per unit of resource input); and the extent to which resource extraction or use has negative impacts on the environment (increased resource efficiency implies reducing the environmental pressures that cause such impacts). Resource intensity is the inverse of resource productivity and is therefore measured by resource use per unit of value added. Environmental intensity is similarly the environmental pressure per unit of value added. In its assessment (Ekins and Hughes 2016), the IRP concluded that Resource Efficiency: is essential for meeting the Sustainable Development Goals (SDGs); is indispensable for meeting climate change targets cost-effectively; can contribute to economic growth and job creation; has significant potential affecting key resource flows; and is practically attainable. Earlier (McKinsey Global Institute 2011), the size of the economic opportunity had been estimated at 2.9 trillion USD by 2030, based on practical efficiency options in regard to the use of water, energy, land and steel. Just 15 key opportunities including energy efficiency of buildings, efficient irrigation, tackling food waste and capturing end use steel efficiency, account for 75% of the global economic opportunity. 70–85% of the potential of each is located in developing countries.

A ‘Circular Economy’ is a systemic approach to economic development designed to benefit businesses, society and the environment. In contrast to the ‘take-make-dispose’ linear economy, a Circular Economy is restorative and regenerative by design and aims to decouple growth from the consumption of finite resources. It is based on three principles (Ellen McArthur Foundation 2018):

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    Design out waste and pollution: eliminating the root causes of negative impacts of economic activity, including releases of greenhouse gases and hazardous substances, the pollution of air, land and water, as well as structural waste such as traffic congestion;

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    Keep products and materials in use: to preserve more value in the form of energy, labour and materials, through designing for increased use and utilization, durability, reuse, remanufacturing and recycling to keep products, components and materials circulating in the economy; and

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    Regenerate natural systems: use of renewable resources and their preservation and enhancement, for example, by returning valuable nutrients to the soil to support regeneration or using renewable energy as substitute for fossil fuels.

In its work, the World Business Council for Sustainable Development (WBCSD) emphasizes that the Circular Economy is a new way of looking at the relationships between markets, customers and natural resources (WBCSD 2017). The Circular Economy leverages new business models and disruptive technologies to break and transform the dominant linear economic model. The goal is to retain as much value as possible from resources, products, parts and materials to create a system that allows for long life, optimal reuse, refurbishment, remanufacturing and recycling. (WBCSD 2017) differentiated five business models, respectively: (1) circular supplies (using renewable energy and bio-based or fully recyclable inputs); (2) resource recovery (recover useful resources out of materials, by-products or waste); (3) product life extension (increase life of products through repair, upgrade and resale and through innovation and product design); (4) sharing platform (shared use, access or ownership to increase product use); and (5) product as a service (paid access to product for customers whilst companies retain ownership to increase product use). In a comparable fashion, other authors have proposed different classifications for Circular Economy business models, for example, (Bocken et al. 2016) provide six strategies for slowing, closing and narrowing resource loops, respectively; access and performance model; extending product value; classic long-life model; encourage sufficiency; extending resource value; and industrial symbiosis.

These business strategies combine with technological opportunities provided through rapid and transformational developments in different technology areas. (WBCSD 2017) identified three technology domains with the highest scope for disruptive impact, respectively: digital (to track resources and monitor and improve resource utilization through such technologies as Internet of Things (IoT), big data and blockchain); physical (to utilize and transform resources more efficiently and effectively through such technologies as 3D printing, nanotechnology, advanced materials and energy storage and generation); and biological (to make greater and more efficient use of renewable resources through such technologies as bio-energy, bio-based materials, bio-catalysis, hydroponics and aeroponics).

The Circular Economy builds upon good environment, resource and energy conservation techniques and practices that have already been proven by the United Nations Industrial Development Organization (UNIDO) and others to benefit developing countries with regard to generating increased income, reducing resource dependency, minimizing waste and reducing environmental footprint (UNIDO 2017a). Transitioning to a Circular Economy is estimated to be able to unlock the global GDP growth of USD4.5 trillion by 2030 and will enhance the resilience of global economies (Lacy and Rutqvist 2015). In dollar terms, the global Circular Economy opportunity (USD4.5 trillion by 2030) represents 37.5% of the estimated total economic opportunity of the SDGs (USD12 trillion by 2030) (BSDC b). In the case of India, the Circular Economy development path could create annual value of USD218 billion in 2030 (equalling 11% of 2015 national GDP) and USD 624 billion in 2050 (equalling 30% of 2015 national GDP), compared with business as usual development scenario, based on assessment of three focus areas: mobility and vehicle manufacturing; food and agriculture; and cities and construction (Ellen McArthur Foundation 2016). This would also allow a significant reduction in the intensity of emissions of greenhouse gases (GHG), 23% by 2030 increasing to 43% by 2050. In dollar terms, Circular Economy opportunity of USD218 billion by 2030 compares to SDG economic opportunity of USD1 trillion in India, i.e. 22%. (BSDC 2017a). Compared with China’s current development path, a Circular Economy trajectory could save businesses and households approximately USD 5.1 trillion in 2030 and USD 11.2 trillion in 2040 in spending on high-quality products and services, with regard to the built environment, mobility, nutrition and use of textiles and electronics (Ellen McArthur Foundation 2018). These savings, equivalent to around 14% and 16% of China’s projected GDP in 2030 and 2040, respectively, could enable more Chinese urban dwellers to enjoy a middle-class lifestyle. A Circular Economy approach would also reduce the environmental impacts of this lifestyle in China, reflected in large reductions in emissions of greenhouse gases (11% by 2030, 23% by 2040) and in fine particulate matter (10% by 2030, 50% by 2040), and fall in traffic congestion (36% by 2030, 47% by 2040). Moreover, these benefits are enabled by a lower consumption of energy and materials and greater efficiency in the mobility system, which could lessen China’s reliance on imported raw materials.

2 Industry Opportunity

In operational terms, Resource Efficiency and Circular Economy are essentially twin concepts concerned with improving the creation, preservation and recovery of economic value from natural resources. Resource Efficiency therein stresses the importance of using all natural resources efficiently and prolongedly (to narrow and slow resource cycles) and Circular Economy emphasizes circularity in the use of natural and man-made materials (to further slow and ultimately close resource cycles). As visualized in Fig. 1, taken together, these twin concepts set an industry agenda to: firstly, maximize use of renewable resources; secondly, relentlessly pursue efficiency in the use of all natural resources; and, thirdly, perpetually recover and recycle end of life products and by-products.

Fig. 1
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Adapted from Van Berkel (2018a) and Nasr et al. (2018)

Industry action agenda for Resource Efficiency and Circular Economy.

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3 Maximize Renewables

The lead idea is to ultimately resource man-made systems up to nature’s capability or in other words to produce and consume with renewables harvested or extracted at rates that are compatible with their long-term availabilities and cycles as well as maintain balance and resilience of the ecosystems they impact. This can be broadly achieved by using nature as an input and/or using nature as a mentor.

Nature can be used as an input for supply of materials, energy, water, land/topsoil and biodiversity. This is well-established practice in many economic sectors, through, e.g. use of wood and other biomass as source for fuel or fibre, water for energy, nutrition and sanitation purposes, and topsoil for agriculture and food production. Many and diverse new applications have come up recently, such as use agro-residues (e.g. wheat straw) for packaging material or substitute of panel board in furniture and homewares. There is scope for new applications, for increasing the efficiency and efficacy of use of renewable resources (with connects to efficiency action of the industry agenda) and for reducing impacts of extraction. New applications may include biomaterials, such as bioplastics or bio-solvents, and renewable energy, such as solar thermal and photovoltaic. Efficiency and efficacy of renewables are enhanced through advanced use of techniques and practices, such as energy-efficient solar panels and wind turbines, customized high-efficiency bio-fuel furnaces, etc. In terms of reducing adverse impacts of extraction and harvesting of renewables, maintaining productivity, diversity and resilience of the source ecosystem is most important. A growing number of certification schemes are available to enable sustainable sourcing of renewables, including, for example, Forest Stewardship Council, Marine Stewardship Council and Union for Ethical Biotrade, which are gaining increasing acceptance and use.

Solar thermal process heat is, for example, promising for many industries that require process heat at low to medium temperature ranges (up to some 400 °C) which can be directly achieved through solar thermal collectors (IRENA 2015). This includes amongst other food processing, dairy, pharmaceutical, chemical and textiles. Solar process heat was for example demonstrated in the leather sector in India, both through air heater to dry finished leather achieving 14% reduction in specific coal consumption with payback of 3.6 years and through water heater for producing hot process water for leather processing achieving 12% reduction in specific coal consumption with a payback time of 4.5 years (UNIDO b). Solar heating can be scaled up by using lenses and reflectors to concentrate solar radiation, in combination with the tracking of solar movement. Such concentrating solar thermal (CST) units are operational in, for example, dairy sector in India at Mothers Dairy in New Delhi, deploying 16 parabolic dishes of 95 square metres each to produce daily 120,000 L of hot water for the cleaning in place system, and at Amul Dairy in Gandhinagar, using parabolic through collectors with total collector area of 615 square metres to produce steam at 17 kg/cm2 that feeds directly into the steam system (Van Berkel b). At the lower end of the temperature spectrum, S4S Technologies, for example, developed advanced dehydration units that combine conductive, convective and radiative heat transfer for fruit and vegetable drying units (UNIDO 2018).

Using nature as a mentor refers to modelling man-made processes and systems on natural processes, also known as biomimicry (Benyus 1997), and has found its way in a growing number of commercial products, such as self-cleaning surfaces (mimicked from the lotus leaf), efficient rotor blade designs (mimicked from natural vortexes), pigment-free coloured surfaces (mimicked from peacock feathers) and aerodynamic airplane wings (mimicked from bird wings). A recent example refers to the engineering of horizontal gas flames with radiant heat transfer, mimicked from charcoal burning, which has recently been commercialized by Agnisumukh in India for commercial kitchens delivering 30% fuel savings (UNIDO 2018). Watsan engineered a household-level water purification system that does not require energy or chemicals using specifically engineered porous materials that mimicked natural purification materials (UNIDO 2018).

The idea of nature as a mentor also found its way into Green Chemistry and Engineering. Green (or also sustainable) Chemistry and Engineering comprise high-level sustainability strategies for application in the design of product and process chemistries, and of engineering artefacts, particularly industrial plants. Whereas Environmental Chemistry and Engineering deal with minimizing the impacts and risks of pollution and waste on the environment, Green Chemistry and Engineering focus on technological approaches to preventing pollution and reduce the consumption of natural resources, particularly non-renewable resources. Neither Green Chemistry nor Green Engineering are separate sub-disciplines in their own right, yet rather normative, nature inspired frameworks in which sub-disciplinary knowledge, methods and techniques are applied. The application of the twin approaches of Green Chemistry and Engineering has sparked process and product innovations in a range of chemical sectors, as highlighted by for example the US Environmental Protection Agency (USA) under its annual Presidential Green Chemistry Challenge. Recent award-winning industrial applications include (USEPA 2016).

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    Air CarbonTM: a biocatalyst system that combines air and methane-based carbon to produce polymers at environmentally friendly ambient conditions, whilst also capturing methane, a potent greenhouse gas. The thermoplastic matches the performance of a wide range of petroleum-based plastics whilst out-competing on price. Within 24 months of scaling in 2013, AirCarbon™ was adopted by a range of leading companies including Dell, Hewlett-Packard, IKEA, KI, Sprint, The Body Shop and Virgin to make packaging bags, containers, cell phone cases, furniture, and a range of other products;

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    Green PolyurethaneTM: a safer, plant-based polyurethane for use on floors, furniture and in foam insulation. The technology eliminates the use of isocyanates, which cause skin and breathing problems and workplace asthma. This is already in production and is reducing emissions of volatile organic compounds (VOCs) and costs and is safer for people and the environment;

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    Plantrose® Process: which uses supercritical water to deconstruct biomass provides cost-advantaged cellulosic sugars by using primarily water for conversion reactions. The two-step continuous process deconstructs a range of plant material into renewable feedstocks to produce separate streams of xylose and glucose. After sugar extraction, remaining lignin solids can be burned to supply the bulk of the heat energy required for the process (or utilized in higher-value applications like adhesives or thermoplastics);

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    Faradayic® Trichrome: uses trivalent chromium [Cr(III)], the least toxic and non-carcinogenic form of chromium, in place of hexavalent chromium [Cr(VI)] in the plating baths. The new electrodeposition process alternates between a forward (cathodic) pulse followed by a reverse (anodic) pulse and an off period (relaxation). This allows for thicker coatings from Cr(III) and can be adjusted to affect the structure and properties of the coating. The product exhibits equivalent or improved wear and fatigue performance compared to chrome (VI) coatings. The plating rate can be roughly doubled with about 25% energy use reduction.

    Recent cleantech accelerators have uncovered interesting examples displaying elements of Green Chemistry and/or Engineering originating from developing countries. In India, for example, Cellzyme Biotech developed an enzyme biocatalyst system for production of antibiotics at room temperature without using solvents and with higher synthesis yield (UNIDO 2018).

4 Relentlessly Practice Efficiency

The guiding idea is to maximize value creation and retention from the resources used in man-made systems, by vigorously pursuing greater efficiency—including through extended duration of use—in the use of all materials, energy and water. Doing so, de facto slows and narrows the resource flows needed to achieve certain functional and economic value.

At enterprise level, this involves Resource Efficient and Cleaner Production (RECP). RECP was introduced to integrate the applications of preventive environmental strategies and total productivity and lean manufacturing methods (UNIDO and UNEP 2010). In strategic terms, RECP is the virtuous process that synergies and realizes progressive improvements in resource (use) efficiency, waste (generation) minimization and human well-being. As shown in Fig. 2, these three goals are indeed sequential and mutually synergistic, as higher resource efficiency realizes and facilitates waste minimization, and reduced waste generation, in turn, realizes and enables well-being, and higher well-being, which, in its turn, encourages and enables higher productivity and resource efficiency.

Fig. 2
figure 2

Image courtesy of UNIDO

Resource Efficient and Cleaner Production as virtuous process.

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RECP, thus, aims to instil a virtuous and self-propagating synergy amongst resource efficiency, waste minimization and human well-being at enterprise level, and beyond in industrial clusters, regions, value chains and entire production and consumption systems. RECP is operationalized through diverse technical, operational and managerial interventions,that are often loosely grouped into eight categories: good housekeeping; input substitution; better process control; equipment modification; technology change; on-site reuse and recycling; production of useful by-product; and product modification. Table 1 provides for short summary along with indicative water-related examples from textile processing sector.

Table 1 RECP practices illustrated for water use and effluent reduction in textile wet processing (Van Berkel 2017)
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RECP methods, techniques and practices have a good business case (Van Berkel 2007), arising from reduced expenditures on energy, materials and water, and increased sales from higher productivity and quality, as demonstrated extensively in India (UNIDO 1995) and elsewhere in developing countries over the past 25 years (UNIDO 2015). For example, in Bangladesh, under the Partnership for Cleaner Textiles (PACT), Tarasima Apparels invested US$ 1,398,250 to achieve annual savings of US$655,800 and as a result thereof cut water consumption by 40,560 m3/year, power consumption by 105,000 kWh/year, natural gas consumption by 1,073,280 m3/year, whilst also reducing chemicals consumption and the volume and pollution load of its effluents. The higher cost investments included: installation of thermal oil heaters and of two-ton incineration boiler; using skylights in cutting, washing and finishing units; addition of electro-cascade reactor to improve operation of the effluent treatment plant; and construction of small biogas plant to produce 56 m3 biogas daily from the canteen and other organic wastes (PACT 2015). Rathkerewwa Desiccated Coconut Industry in Sri Lanka started to use the coconut shells as alternative fuel in its boiler, substituting for the use of coal. Moreover, the company also improved coconut peeling, leading to 50% reduction of kernel losses, halving of water consumption and recovery of coconut oil from wash water. The total investment required was just US$4250 and yielded annual savings of US$315,600 and GHG emission reduction of 900 tons CO2-eq (SL NCPC 2010). Anning Starch Co in China updated processing equipment in extraction unit (replacement of hammer mill with vertical centrifugal screen by hammer mill with grater and horizontal centrifugal screen) and in refining unit (replacement of disc centrifuge by multistage hydro-cyclone) (CNCPC 2015). Combined with improved integration of the unit operations, implementation of RECP reduced water use by 47%, energy use by 35% and materials use by 11%, which contributed also to reduction of wastewater by 45%. The investment of US$620,000 generated annual savings of US$940,000.

5 Recycle Perpetually

The guiding idea is to retain economic value from products at the end of their economic lifetime, which basically serves to embed the man-made economic system into the natural ecosystem. The perpetuality angle is of particular relevance to avoid accumulation in products or dispersion into the environment of potentially hazardous components from increasingly complex materials and products. Value recovery is a multi-pronged agenda to recover value from previously discarded items from every stage of product life cycle, for new product, material, energy or water, with the ultimate aim to retain man-made, non-biodegradable resources in circulation in the economy and release natural, biodegradable resources back to the environment within nature’s capacity and at its pace.

Recycling is well-established industrial practice through the 3R methods of reduce, reuse and recycling, for a diversity of materials, such as paper, metals, construction and demolition waste, etc. There is renewed attention to scale up these traditional recycling industries and integrate these in industrial production systems. Large-scale industrial opportunities are for example associated with cement making as this sector can accept and process a diversity of alternative raw materials (e.g. slags, catalysts, etc.) and alternative fuels (including plastics, sludges, tyres, combustible and hazardous waste), in environmentally sound manner, due to the high kiln temperatures, provided best available practices are being deployed (WBCSD and IEA 2013). This though is just one example of the emerging practice of industrial symbiosis which involves the use of one factory’s waste as an alternative input material for a nearby factory that can involve waste materials as well as different qualities of wastewater and waste heat. Industrial symbiosis is creating large-scale economic, environmental and operational benefits in industrial complexes in for example Kalundborg (Denmark), Kwinana (Australia), Ulsan (Republic of Korea) and Dalian (China). A further expansion of the symbiosis concept involves the use of municipal waste in industrial processes, leading to industrial and urban symbiosis, as first documented under the Japanese Eco-Town Programme (Van Berkel et al. 2009).

The three Rs also provide a strong framework for cleantech innovation and entrepreneurship. Arvind Textiles in India for example has been able to achieve in its denim production in India 70% circularity in water use (by accepting municipal sewerage as input for its processing plants), 50% circularity in fuels (by using bio and other renewable energy sources) and 20% fibre circularity (post-consumer fibre recovery and reuse), whilst in addition recovering and reusing significant amounts of salts and other processing chemicals. NoWasteTextiles pushed the boundaries of circularity and is already able to produce knitwear from 100% post-consumer recycled garments. Other Indian cleantech start-ups that have wealth from waste as their business model include Saathi (producer of fully biodegradable sanitary pads from waste banana fibre), Aspartika (recovering valuable Omega 3 fatty acids from silkworm pupae) and Brisil (extraction of silica from rice husk ash to produce tyre additive that reduces rolling resistance which in turn saves energy) (UNIDO 2018).

Circularity though extends beyond the traditional environment domain of recycling and resource recovery, into industrial Value-Retention Processes (Nasr et al. 2018). Remanufacturing and comprehensive refurbishment (full-service life Value-Retention Processes) are intensive, standardized industrial processes that provide an opportunity to add value and utility to a product’s service life. Repair, refurbishment and arranging direct reuse (Partial Service Life VRPs) are maintenance processes that typically occur outside of industrial facilities and provide an opportunity to extend the product’s useful life. IRP assessed VRP for three sectors: automotive components; heavy machinery; and industrial printers (Nasr et al. 2018). It found that at the product-level, remanufacturing and comprehensive refurbishment can contribute to GHG emissions reduction by between 79 and 99%. Similarly, the opportunity for material savings via VRPs is significant: remanufacturing can reduce new material requirement by between 80 and 98%; comprehensive refurbishing saved slightly more materials on average, between 82 and 99%. Repair saved between 94 and 99% and arranging direct reuse largely does not require any inputs of new materials. Cost advantages of VRPs range, conservatively, between 15 and 80% of the cost of new version of the product. An optimized VRP strategy requires that companies adopt new product design processes and priorities. Products must be designed to be durable, upgradable, able to be refurbished or remanufactured and repairable, and these design objectives need to be incorporated early in product planning and business case development stages.

6 Outlook

The twin concepts of Resource Efficiency and Circular Economy are reflections of the imperative to decouple economic development from increased use of natural resources and associated emissions, effluents and wastes, from environment, climate, resources and economic angles. There are ample opportunities for producers and consumers to put Resource Efficiency and Circular Economy into practice, through productivity and innovation with the triple aims of maximizing the use of renewable resources, maximizing the efficiency in use of all resources and extending perpetual value recovery and recycling. Whilst praiseworthy results have been achieved in selected enterprises and value chains that are gradually expanding, it is urgent to scale up, speed up and mainstream such good practices to counter today’s climate, resources and environmental challenges. This will require transformative change in economic, fiscal, environment, technology and resources policy and practice, and adoption of responsible business practices and sustainable consumption patterns.