The circular economy will be disruptive to the current business models of waste and recycling companies while also providing new opportunities for sustainable growth.
We are moving from a linear economy based on the principles of the ‘take-make-waste” approach to a circular economy based on the values of eliminating waste and pollution, recirculating products and materials (at their highest value) and regenerating nature.
The transition to a circular economy is being driven by global missions, such as mitigating climate change and protecting the earth’s finite resources and biodiversity.
The transition also is underpinned by emerging national and international policies and regulations, such as the European Union Circular Economy Action Plan, as well as by the global roll-out of policies such as extended producer responsibility (EPR).
In addition, initiatives by the private sector also are gaining momentum. Nearly 100 multinational companies signed the U.S. Plastic Pact, for example, pledging to make their plastic packaging either recyclable, reusable or compostable.
The direction of travel has been set, but the duration of the transition and final destination still must be worked out.
Like all change, the circular economy will be disruptive to the current business models of waste and recycling companies while also providing new opportunities for sustainable growth.
It is time now for waste and recycling companies to scan the horizon and plan how to best position themselves to exploit these emerging opportunities.
What is clear about the circular economy is that there will be less waste with the focus being on keeping resources in circulation and at their highest value.
The future is, therefore, about understanding, tracking and assigning resources at their highest value to where supply chains need them.
The circular economy is based on a strong integration of the value/supply chains as resource composition, quality and predictability gain in importance.
This means fundamental changes to the traditional business models of waste management companies.
While recycling can be seen as a lesser option in some views compared with repair, remanufacture, reuse, sharing, etc., advanced recycling undoubtedly will have a role to play for many resource types.
But it also means those companies that respond rapidly to customers' new requirements will have the opportunity to achieve the most success.
Prospects from the circular economy for waste and recycling companies include:
An integrated supply chain will be a key feature of the circular economy.
A linear economy was a model where material was extracted, made into a product that was sold, consumed and then thrown away. This was our past but is unlikely to be our future.
In a circular economy, existing products are used as the building blocks for new products. This can be through recycling cardboard boxes, plastic bottles and metal cans but also by reusing packaging, electrical items and other goods where possible. It also means designing products that can be easily recycled rather than disposed of.
Waste and recycling companies already play a pivotal role in recycling in the linear economy, acting as an important intermediary between waste producers and those companies looking to source quality secondary raw materials to replace virgin materials.
Recycling (particularly advanced recycling that preserves the highest value of the materials) will remain a key part of the circular economy.
We expect that this role will evolve beyond recycling as waste and recycling companies become more integrated into the supply chains of the original producers of the material as well as a range of potential users of the transformed material.
Most likely your business traditionally moved waste or recyclables, but it is time to reposition yourself as a circular logistics/agile logistics company that is integrated within circular supply chains.
What do you need to consider when changing your business from a linear waste company to a circular logistics provider?
1. Understand emerging circular policy developments and assess their likely impact on your collection logistics. EPR will mean those that create waste must pay for its collection, sorting and processing, giving them an incentive to design and manufacture products that are easy to reuse or recycle. Where can you cooperate with producers that are subject to EPR legislation?
Deposit return schemes already are popular in some countries but are being enacted in others as a way to ensure as much material is captured as possible. Drink bottles and containers are typically collected this way, as it often gives a purer and better-quality product that is easier to recycle.
Source-separated collections are commonplace in many European countries, while others, such as the U.K., China and Thailand, are introducing them to create better quality secondary materials for recycling with fewer impurities. It also means that high-quality recyclate is more likely to be accepted for import by countries that are part of a global circular economy.
Organics collection is becoming the norm in some countries as recognition of the circular value of organic waste that can be transformed into soil nutrients (regeneration of nature is circular economy value) and renewable energy are recognized.
We believe that these policy developments along with the rapid adoption of associated technologies require recycling companies to review their collection strategies and support technologies as logistics becomes increasingly data-driven.
We expect the following trends:
2. Invest in digital technology. You will need the latest digital technology to integrate within the circular supply chains.
Keeping a record of your trades and contracts in Excel will no longer be enough. You’ll need to understand your resource inventory in detail, including quality, composition, costs and valuation. You will need to forecast volumes of material coming in and how you will service customers that work on just-in-time raw material manufacturing schedules.
Digital technologies will help track each part, with sophisticated tools providing reporting and analysis when you need it but also automating processes to save resources. These technologies will be a key enabler for the circular economy given the centrality of data and analytics. AMCS believes that waste and recycling companies need to embrace new digital technologies that allow them to participate and collaborate across the value chain.
We have identified four key areas that we view as key technology enablers for the circular economy:
The circular economy is not entirely new. For example, metal has never been regarded as waste but instead as a circular resource since 300 BC. There is much to be learned from the approach of such early adopters of circularity in areas such as fiber, organics, metals and plastics.
These companies are deeply integrated into the supply chain of steel mills, smelters, paper mills, natural fertilizing companies and they have always tightly managed resource quality to produce a product to a demanding end specification.
The circular economy is driving our strategy at AMCS, ensuring we provide our customers with the tools and expertise they can rely on as we move toward a new future with both the opportunities and complexities that this entails.
One thing that is certain is that the circular economy will be digital, and AMCS plans to be a key partner and enabler for our customers on this journey of transition.
Conor Dowdis pro duct marketing manager at AMCS, headquartered in Limerick, Ireland.
The toolkit will help organizers plan social media campaigns and educate their communities on best recycling practices.
The Recycling Partnership, Falls Church, Virginia, has released a free toolkit and resources for community organizers to increase recycling in their communities. The resources are part of America Recycles Week, which begins Nov. 15, and are available to view online.
According to The Recycling Partnership, there has been an increased awareness of recycling as a valuable and essential service. The U.S. supply chain also has seen increased demand for recycled materials to support American manufacturing of new products and packaging. To continue the momentum recycling has picked up, The Recycling Partnership released these resources.
“We know time is valuable for community recycling coordinators and our goal continues to be finding unique ways to meet communities where they are with the resources they need,” says Craig Wittig, director of community programs at The Recycling Partnership. “As we’ve previously opened our resources to thousands of communities, we wanted these to be front and center for programs during America Recycles Week, for programs planning for 2022 and all year long.”
Wittig says coordinators need to overcome four main challenges when educating their communities about recycling: the belief that there is a lack of recycling access, confusion about what can be recycled, increasing participation in recycling programs and labor issues. He says labor issues ultimately affect how recycling initiatives are executed.
The toolkit includes guides on how to build an education campaign, how to make signs of accepted recyclables and research around behavior change. It also has guides on multifamily recycling and what to do with batteries and personal electronics at end of life. The goals of the toolkit are to highlight recycling behaviors, provide best recycling practices and how to design successful recycling programs in a community.
“Our tools utilize educational techniques that are clear and concise and deliver that message in a fashion that residents can understand,” Wittig says.
The toolkit also has a social media package that coordinators can use to increase awareness of community recycling. The toolkit has recycling graphics and prewritten messages with hashtags that coordinators can use to accompany them. It also offers a guide on designing a successful social campaign by showing how people understand recycling instructions.
“All of our direct-to-consumer work is rooted in behavior change from cart packets to cart tags and the behavior stage gates of access, education and engagement,” Wittig says. “We have years of data from our Feet on the Street cart-tagging recycling education program with best practices in messaging to address contamination plus consumer insights on different materials, multicultural audiences, messages, barriers and motivators.”
Last year, one of the main issues recycling faced was not having enough labor as residential recycling tonnage increased. However, Wittig says COVID-19 played a role in growing domestic markets for multiple recyclables in the United States. It also accelerated the abundance of old corrugated containers generated through e-commerce, he adds.
While the toolkit and resources were launched as part of America Recycles Week, they will be available anytime for free on The Recycling Partnership’s website.
Ibrahim Yucel of CRU North America says copper is feeling the effects of supply disruptions and the green energy transition.
The price of copper could stabilize over the next five years but is expected to rebound going forward as supply will be insufficient to meet demand, said Ibrahim Yucel, a senior consultant with CRU North America. Yucel, who is based near Pittsburgh, spoke during the American Copper Council Fall Meeting Nov. 4 in Key Biscayne, Florida.
“Whenever it comes to copper pricing in the current market, or at any other point in time, there's always a few key trends, one of which is inflation, or fears of inflation,” he said. “Copper pricing is highly intertwined and correlated with inflation. So, whenever there is fear of increased inflation in the future, the copper price goes up.”
In addition to the inflation currently being experienced, which CRU believes to be transitory, Yucel said other factors that are “more specific and unique to this time frame” are influencing copper pricing. “First, we've seen a tightening in the scrap market. We have extraordinarily low levels of exchange inventories, amounting to less than one week of global consumption. And the last time we had that was several decades ago at a point where the copper global market was much smaller.”
He added that, according to CRU’s analysis, whenever exchange inventories fall below one week of global consumption, copper pricing experiences a major spike, “which is exactly what we've seen in the past few weeks following LME Week.” He was referencing the annual gathering of the global metals industry that the London Metal Exchange hosted from Oct. 11-15.
Supply chain issues and disruptions in the container freight market also have created a mismatch in supply and demand, Yucel said. “Cathode is either in the wrong place or at the wrong time,” he added, “and that has further multiplied the issues associated with low inventories.”
Yucel said container shipments of blister or other copper raw materials from the African copper belt to China would normally take two months but now are taking five months because of these issues, which is affecting 300,000 tons of copper per month.
Along with the spike in pricing following LME Week, Yucel said “an extraordinary backwardation to the forward curve” has been seen in the last few weeks.
Yucel said the energy shortage that is occurring in different parts of the world, including China and Europe, is less likely to affect copper production because copper refining and smelting is less energy-intensive than smelting or refining other nonferrous metals. “Even though the worries, especially from the investor level, may have impacted copper pricing, if we look at it in terms of fundamentals, copper is not that threatened by a potential energy shortage as much as other metals might be,” he said. “You'll see much bigger impacts on other nonferrous metals before it begins impacting copper.”
From 2000 through 2019, China was the fastest growing market for copper, accounting for the majority of global refined copper consumption, Yucel said. China's demand continued to grow in 2020, despite the pandemic, while most other markets declined because of COVID-19-related disruptions.
Because North America, Europe and other parts of the world are starting from a lower base, he added, their copper consumption is expected to grow more substantially than that of China’s.
“The other larger, more long-term driver is green energy,” Yucel said. “The way that we define green energy here is use of copper wire, busbars and other copper semis products in electrical vehicles (EVs), renewable energy, so specifically wind and wind and solar, as well as the associated build-out of infrastructure associated with getting those renewables on the grid, as well as the infrastructure associated with electric vehicle charging.”
In 2021, about 25 percent of copper consumption was associated with green energy, he said, noting that that number is expected to jump to 40 percent in 2022.
CRU is forecasting global refined copper consumption growth to be 4.7 percent in 2021, 2.8 percent in 2022 and 2 percent over the next five years, Yucel said, while China’s growth rate will be lower than the global average for next five years as it transitions to a more service-based economy. He noted that construction and infrastructure spending accounts for roughly one-third of total copper consumption in China, roughly half of which is residential construction. “So, any major disruption to residential construction prospects, which are more likely now than not, is going to have a big impact on overall copper demand in China.”
He added, “Even though demand for copper in China is declining over the next few years, we expect a continued increase, or a high level, in the copper price due to supply-side disruptions.”
India's consumption of copper is expected to grow significantly as the country invests in infrastructure construction and the electrical grid, Yucel said.
Supply chain disruptions in Southeast Asia, especially on the copper semis, fabrication and value-added manufacturing side, have lowered the overall copper consumption growth rate in that region, he said. But, as these issues are resolved, the Southeast Asian economies will rebound over the next two or three years, particularly as copper-intensive machinery that used to be made in China is relocated to Malaysia, Indonesia, Cambodia and Vietnam, Yucel added.
Regarding EVs, subsidies have been key to their adoption in Europe, and Yucel said CRU expects them to continue. While China no longer has subsidies in place, the country’s automakers are producing a new generation of vehicles with a different battery chemistry resulting in shorter ranges but pricing that is on par with internal combustion engine (ICE) vehicles
EV adoption in the U.S. is being driven by different factors, he said, including increasingly supportive policy, as well as greater model variety.
EVs can use three to four times more copper than ICE vehicles, Yucel said. Therefore, as the transition to EVs continues, copper demand will increase. CRU expects new EV sales to double over the next four years, Yucel said. The same can be said of electricity generation as solar photovoltaic and wind energy. Because these sources are more distributed than traditional power plants, he said, more insulated wire will be needed.
CRU forecasts that growth in copper supply from mining will be 3.8 percent in 2021 and 3.4 percent in 2022, Yucel said. “And what that means is that the supply-demand balance is actually going to begin to normalize and become more balanced from 2023 onwards.”
Regarding smelting and refining capacity, Yucel said China is limiting the number of these operations. He said capacity is shifting to other countries in Southeast Asia. He added that a number of projects in Indonesia have been announced, while he also expects India’s capacity in this area to grow.
In the scrap sector, Yucel noted that Malaysia plans to follow in China's footsteps in terms of limiting or banning low-grade copper imports, which would require the establishment of a new market for these low-grade materials. “What we think is more likely to happen is a moving away from more of a global flow of scrap to more localized flows,” he said. “And you already see this in North America right now with the major investments in wire chopping that started in 2018.”
Yucel also alluded to the smelting and refining capacity that has been announced in the U.S.
He said copper should trade in the $4 per pound range through the end of the year, with pricing declining in 2022 as balances normalize before rising again as suppliers will not be able to meet demand.
Steelmaker is acquiring a portion of the Rifkin family’s MetalX scrap processing and trading company.
Australia-based steelmaker BlueScope has announced it has entered into a binding agreement to buy the ferrous scrap steel recycling business of Waterloo, Indiana-based MetalX LLC. BlueScope describes that firm as “the leading supplier of scrap feed” to its Delta, Ohio, electric arc furnace (EAF) steel minimill, North Star BlueScope Steel.
BlueScope says it will pay $240 million to acquire two of MetalX’s operating sites, one each in Indiana and Ohio. The site in Ohio is “immediately adjacent to the North Star facility” in Delta, according to BlueScope.
The steelmaker says the transaction is “on a cash-free and debt-free basis and includes working capital,” with the acquisition expected to be completed by end of this year.
Members of the Rifkin family started MetalX in 2012, a few years after selling their former company, OmniSource Corp., to Indiana-based EAF steelmaker Steel Dynamics Inc.
The company subsequently has installed auto shredders in Waterloo, Indiana, and in Delta. The firm has additional sites in Auburn and Fort Wayne, Indiana.
“The United States is a key focus for BlueScope’s future growth,” says the company’s managing director and CEO Mark Vassella. “The MetalX ferrous acquisition adds to BlueScope’s extensive U.S. asset footprint of over $3 billion, which spans steelmaking, steel coating and painting, engineered building systems and industrial property development. And we have current and intended expansion projects totaling up to $1.5 billion, including the NorthStar expansion project.”
Vassella’s phrasing of BlueScope acquiring ferrous-related assets makes it unclear to what extent, if any, MetalX and the Rifkin family could remain involved in nonferrous scrap processing and sales. The BlueScope announcement also indicates the steelmaker is acquiring just one of the three MetalX facilities in Indiana.
The BlueScope CEO continues, “Using our strong financial position, moving upstream to acquire a scrap supply business helps underpin North Star’s supply chain and its great competitiveness. North Star will soon move from a two million metric tons per annum mill to almost three million metric tons per annum, and as the business expands, securing scrap is the right play.”
North Star has a “diverse base of scrap steel suppliers,” Vassella adds. “MetalX is our largest, currently supplying around 20 percent of the scrap used by North Star. The acquisition brings us a crucial presence and expertise in scrap processing to further secure our scrap needs–both prime and postconsumer (obsolete) scrap. Further, the MetalX ferrous acquisition will enable North Star to improve the quality and quantity of obsolete scrap it uses and reduce the mix of prime scrap.”
He concludes, “As a steel recycling EAF producer of hot-rolled coil, utilizing low emissions electricity, North Star is highly carbon-efficient. This acquisition further enhances BlueScope’s sustainability profile by bringing in-house part of North Star’s scrap collection. The acquisition meets our return on capital expectations and provides synergies to optimize logistics and reduce scrap costs. We look forward to welcoming all of the MetalX ferrous team into the broader BlueScope team.”
Rubber recycling firm practices full diversion at its two Pennsylvania facilities.
Lancaster, Pennsylvania-based rubber recycling company Ecore says it has achieved zero waste environmental claim validations from Underwriters Laboratories (UL) for two of its manufacturing facilities.
Ecore says it has partnered with UL to complete 2020 Zero Waste to Landfill audits for its facilities in Lancaster and York, Pennsylvania. The audit has credited the Lancaster facility with achieving a landfill diversion rate of 99 percent, with 22 percent waste diversion tied to energy recovery. The plant in York achieved a landfill diversion rate of 100 percent, again with 22 percent involving energy recovery.
“This is a huge milestone in our company’s pursuit of a more circular economy and a world free of rubber waste,” says Art Dodge III, CEO and president of Ecore. “We like to say that Ecore was born ‘green’ and, as an industry leader in recycled products technology, these validations reinforce our commitment to reducing our environmental impact.”
The UL Environmental Claim Validation Mark “communicates to purchasers that products have been evaluated by an objective third-party and independently proven to have been manufactured and/or to perform in accordance with the manufacturer’s environmental claims,” says Ecore.
“Our products are manufactured in state-of-the-art facilities with a focus on continually improving efficiency, sustainability and responsible resource management,” adds Dodge. “Furthermore, Ecore’s manufacturing process has virtually no waste – scrap material from production is collected and recycled back into our system because rubber can be continually recycled and does not degrade through the recycling process like [some] other materials.”
Ecore uses much of the rubber it reclaims to produce athletic and commercial flooring, selling to customers in more than 75 countries.