Blog 25 Feb 2016 

The Economy Battle: Bio vs Circular

While both the circular and bio economies have similar goals and concepts, they actually describe two different things.

Becky Fields

Becky Fields

Marketing & Communications Business Partner

  7min Read

Traditional economic principles involve the creation of a product from raw materials, the use of that product by the consumer, and the disposal of said product at the end of its lifespan. While this process might seem logical in theory, it can’t support a culture in perpetuity. 

In the UK, businesses and citizens generate more than 100 million tonnes of waste every year,” according to CB Environmental. Waste comes from product packaging, uneaten food, unrecycled paper, and hundreds of other sources. Instead of continuing to line the landfills with refuse, however, two interesting economical concepts seek to reduce waste, improve productivity, and boost job growth: the bio economy and the circular economy.

While both the circular and bio economies have similar goals and concepts, they actually describe two different things. Understanding how they work together is key to shaping a future in which waste becomes usable again and the end of one product serves as the beginning of another.

The bio economy (also called the bio-based economy) refers specifically to the use of biotechnology and bio-based materials in creating processes and products. The focus of this concept lies in the use of bio material, from crops and crop waste to seaweed, and the bio economy can apply to numerous industries, from heating and energy production to the manufacturing of pharmaceuticals and bioplastics.

The bio economy’s purpose is to reduce waste and to conserve nonrenewable resources. For instance, instead of using petroleum to produce plastic, which depletes the world’s petroleum supply and increases the release of greenhouse gases, bioengineers have found ways to manufacture plastics using renewable feedstocks. Many such plastics are biodegradable, which means they don’t contribute to landfills long-term. CPI is currently working with a number of companies to strengthen the proposition of waste to worth’ projects. 

Working with experts at the University of Bath and Rebio Technologies Ltd, a project to develop microorganism production for bioplastics waste is one of these. The project has the potential to address an important need in the industrial biotechnology community by transitioning away from petrochemical and agricultural-based feedstock’s to second generation waste derived feedstock’s.

Of course, end products aren’t the only focus of the bio economy. For instance, biorefineries use agricultural, forest, and municipal waste instead of crude oil to produce petrol and other essential fuels. While the process might require advanced technology and further exploration, it serves as a shining example of how the bio economy can contribute to a sustainable future.

Europe has, in many ways, taken the lead in shaping the bio economy. The EU Framework Programme for Research and Innovation estimates that the food supply demand will increase by 70% through to the year 2050 and that the agriculture industry will increase global missions by 30% by 2030. The organisation maintains that biowaste represents the most valuable asset for businesses and governments that want to preserve the environment.

Additionally, the organisation offers other key benefits of a well-structured bio economy, including increased self-reliance, improved job growth, and enhanced competitive advantages. However, to hasten the spread of the bio economy, it is essential for businesses and researchers to identify new applications for biowaste and devote resources to technology and infrastructure development.

Another project CPI are currently working on will investigate the feasibility for producing Succinic Acid from a low cost industrial waste stream, glycerol, which is a byproduct of the production of biodiesel transport fuel. This is a joint project working with the University of Manchester, and has the potential to maximise the value of glycerol by converting it to higher value products suitable for the chemical industry.

Several challenges lie in the bio economy’s path, including funding and public policy. For instance, without any regulation, there is no way for consumers and businesses to know that the bioproducts and bioprocesses they use meet a specific standard. This can slow adoption rates and lead to discord between businesses. Additionally, public policy can create accepted best practices for technology application and biowaste sourcing.

Funding starts at the research and development phase, which is why many businesses with tremendous ideas and goals have not yet taken steps toward implementation. Companies like CPI have emerged to help the UK market progress toward the manufacturing phase in biotechnology and bioresearch by providing resources for prototyping, demonstration, and scale-up.

It’s also essential to spread awareness about the bio economy and its implications on the global environment. Many consumers have adopted recycling and reusing policies in their own homes to great impact. For instance, the UK’s Department for Environment Food & Rural Affairs reports that waste-from-household recycling increased from 40.4 percent in 2010 to 44.9 percent in 2013. This widespread adoption can translate to the business sector to product a predominantly bio-based economy. However, without the necessary policy changes and industry funding, it might take time to encourage such adoption.

As mentioned above, traditional economic principles follow a linear approach to product conception, development, manufacturing, distribution, and disposal. The circular economy refers to a process that does not focus on an end point (disposal), but loops materials into an ongoing cycle to reduce waste and improve environmental health.

Essentially, this type of economy regenerates itself throughout products’ life cycles. It’s inherently scalable, which means that businesses won’t reach a point where their processes no longer serve them. They can continue to perpetuate a circular economy without economic or procedural risk — in fact, a circular economy promises to improve those facets of business rather than detract from them.

The Ellen MacArthur Foundation, an organisation that devotes itself to the promotion of these economic principles, uses mobile phones as an example to illustrate the power of the circular economy.

Mobile phone reuse and remanufacturing could be a viable alternative to recycleing

As one of the most disposable consumer electronics, mobile phone usage constitutes a significant drain on production resources. As of Q1 2015, 93 percent of UK adults own and use a mobile phone, with 66 percent reporting the use of a smartphone. Even if each of those adults keeps a given phone for a full year, there is significant turnover of phones as new models appear on the market and early adopters feel driven to upgrade.

In a circular economy, however, new phones wouldn’t necessarily mean new construction. Used and refurbished phones would constitute a significant share of the market as consumers turn in or recycle their old phones to replace them with new models. The Ellen MacArthur Foundation found that retailers could generate a profit from selling as-is used phones, which would increase revenue for businesses and reduce costs for consumers who don’t wish to invest money in brand new devices.

The organisation also identifies functional recycling as a key component of the circular economy. Discarded mobile phones can produce materials as well as whole parts that can be used to refurbish used phones for resale. Whether it’s the battery, the camera, or the circuit board, those parts don’t have to be created from whole cloth. This would benefit not only third-party retailers but also manufacturers.

To fully realise a circular economy for mobile phones and similar devices, the UK would have to encourage more recycling and repurposing of those devices among consumers. If the majority of UK citizens turn in their phones at the end of those devices’ life cycles, the parts can be used to create new phones or to refurbish devices in better repair.

Of course, mobile phones and consumer electronics aren’t the only potential beneficiaries of a circular economy. For instance, the increasingly popular products-as-services business model offers several advantages to vendors. They create passive and renewable income streams and reduce the risks of business. However, products-as-services can also create tremendous appeal in a circular economy. Since products are leased” and not sold, the vendor receives the product back at the end of the consumer’s subscription and can resell, reuse, recycle, or refurbish it for future sale to other customers.

Other industries that stand to gain from a circular economy include the automotive, energy, aerospace, health care, chemicals, and food services markets. Reusing materials and injecting them back into the manufacturing or supply chain processes can vastly improve commerce’s impact on the environment.

Seaweed could be used to generate sustainable energy.

As a founding partner of the High Value Manufacturing Catapult, CPI will lead a project to develop a process that uses seaweed for the generation of sustainable energy by Anaerobic Digestion. Traditionally, as well as agricultural and food wastes, AD processes use food crops such as maize and beet. However, farmed seaweed could be used as an alternative feedstock for the AD process, thereby limiting the use of prime agricultural land that can be used for growing food crops

Businesses have to collect copious amounts of data, then process and analyse it to maximise profit potential and reduce waste. Partnerships with organisations like CPI can help marshal resources and apply relevant data so that end products can fulfill their intended uses.

Newlife Paints in England, which uses leftover paint to remanufacture what the company calls “eco-paints.”

As Clegg suggests, both the circular and bio economies require significant innovation, whether it comes from an individual who has a great idea or a large organisation that wants to change the world. 

While many facets of the circular and bio economies seem like predictions for a far-off future, innovative companies and individuals are already implementing likeminded strategies to bring these economic principles to life. As more global organisations devote their resources to circular economic principles and bio-based resources, these principles will become almost universal across all industries.

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