Could the circular economy help deal with the crisis around recycling in Australia? Here’s how Australian manufacturers could make a difference.
The crisis around recycling in Australia made front-page news last year when China announced its decision to ban imports of recyclable waste from all over the world.
China had been handling nearly half the world’s waste for over 20 years. Since the ban, the spotlight has landed on the circular economy as the alternative.
Before we look at what the circular economy is and the role of Australian manufacturers, let’s look at the problem:
Exactly how big is Australia’s recycling crisis?
We generate 52 mega tonnes of waste annually – that’s 52 million tonnes – in Australia, a figure that’s growing at twice the speed of our population. The Organisation for Economic Co-operation and Development (OECD) has revealed that we’re ranked fifth out of all OECD countries for generating the most municipal waste per capita.
Approximately half the waste this country generates is recycled but, because of an increase in economic output, the amount we dump in landfill is rising.
And these figures are set to soar, with an extra three billion consumers forecast to enter the market by 2030. It’s why China’s move to stop importing global waste was so critical. The decision was based in a desire to buy its own domestic products instead, in a drive to boost their own recycling industry and become self-sufficient.
Many say that it’s time for Australia to do the same.
The crisis escalates the conversation for rethinking waste exports and moving towards buying our own domestic waste for reuse and recycling. This would be the foundation for the transition towards a circular economy in Australia.
The beginnings of circular economies are sprouting worldwide, and manufacturing is leading the way in most countries where initiatives, plans and policies are in place. (This blog explains more about Australian manufacturing and a circular economy.)
Why manufacturers have an important role
We know that the manufacturing industry, as it is today, isn’t sustainable. Resources are finite, consumption is on the rise and our current levels of waste are unmanageable. The way we manufacture, essentially the way we do business, needs to evolve to meet the planet’s needs.
That’s where the circular economy comes in.
The circular economy aims to address these issues by reusing materials and components many times.
What is sustainable manufacturing? Here are some examples from Australian companies.
Manufacturers have a lot to gain from embracing the circular economy. A recent study found that the manufacturing industry in Europe could generate cost savings of up to US$380 billion annually if it were to transition to this alternative economic model.
The circular economy in practice
So, how can manufacturers put the circular economy to work?
It depends. Some manufacturers will reuse the materials from their own products to create new ones. Others will collaborate with another manufacturer to repurpose materials, either into the same product or a different one.
For example, battery manufacturer Energiser takes materials from their old batteries and makes them into a new brand of rechargeable battery made with 4% recycled material. This may be a small percentage but at least it’s a start – especially because, in Australia, 14,000 tonnes of batteries go to landfill each year and less than 3% are recycled.
Another example is how Chinese manufacturer Guangzhou Huadu has partnered with retailer 4S to remanufacture used vehicle parts into certified spare parts.
There are substantial benefits to the manufacturer’s bottom line – estimates suggest that remanufactured components could be 50% cheaper to make and save 70% in material input.
There’s also an opportunity to innovate and create new products. For instance, New Zealand’s Wishbone Design Studio has developed a children’s balance bike made from 100% post-consumer recycled carpet, showing how one man’s waste is another’s treasure.
Another major advantage to reusing materials is the ability to nurture a closer relationship with customers.
Simply because you have more interaction with consumers over the course of a product’s life.
There’s also the potential for increased innovation in the supply chain because you are collaborating more throughout the manufacturing process.
So, how do we get there?
Step 1: Get leadership buy-in
Companies need to change the way they operate. Moving towards a circular economy demands a new business model – one that, among many other things, is based on reverse logistics.
Another shift in operations is the transition from product to service. For example, instead of buying tyres, you buy kilometres. With this type of model we need to consider the durability of a product, what happens at the end of its life, any value retained, what we can capture, and how we can maximise that value over its entire cycle.
Step 2: Focus on collaboration
Partnerships are fundamental to making these changes. Every participating business in the supply chain needs to be on board.
Collaboration via an “industry cloud” is the next step in connected manufacturing. This blog explains what it is and how manufacturing’s “new phenomenon” could advantage your business.
Step 3: Invest in technology
Advanced technology can facilitate our understanding of a product’s lifecycle and allow customers to do the same. By embracing this we can recognise where we can make the biggest wins in product development, and also be more transparent with customers by sharing the story of our products’ materials and components.
Step 4: Educate yourselves and others
Raising awareness of the issues and possible solutions among customers, suppliers and stakeholders is critical to making this work. Look at ways you can educate your own company and partners.
So, what are you waiting for?
Australian manufacturers have an invitation to be more sustainable and more profitable. By transitioning our business model to meet the needs of a circular economy, we could achieve lower production costs, greater collaboration and innovation, additional value in product development and more jobs.
Speaking of innovations, meet the disruptive innovations ready to rock your supply chain.
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Image credits: iStock/ BsWei (main); iStock / D3Damon (2nd + 3rd)