Adopting circular economy
Circular economy entails the use and reuse of resources to extract the maximum value before recovering and regenerating them.
The chemical process manufacturing sector supports several industries such as healthcare, electronics, agriculture, and transportation. Its criticality to various businesses, however, cannot justify the environmental degradation caused by this resource-intensive industry that generates a significant amount of waste and greenhouse gases.
The circular economy concept can help process manufacturing companies reduce waste, increase efficiency, and create a more sustainable future. Transitioning to this model, however, won’t be easy. It will require process manufacturing companies to focus on research, technology, and infrastructure.
Collaboration across the value chain, from suppliers to consumers, is essential to creating an efficient recycling system and developing new product designs that facilitate disassembly and reuse. To realize the circular economy vision, process manufacturing companies will need to focus on the following three areas in particular:
Raw material dependence: The industry relies heavily on finite, non-renewable resources, such as fossil fuels and minerals. Shifting to renewable or bio-based feedstocks will require significant investment in research, technology, and supply chain development.
Complex supply chains: Intricate supply chains of the chemical process manufacturing companies make it challenging to track and manage materials throughout their lifecycle. Developing efficient collection, sorting, and recycling systems requires collaboration among various stakeholders.
Chemical complexity: The diversity and complexity of chemical products make recycling and recovery difficult. Designing products for disassembly and reuse, while maintaining performance and safety standards, is a significant challenge.
Additionally, chemical companies must address the concerns related to product quality and safety when using recycled materials. Rigorous testing, certification, and standardization can help ensure that recycled inputs meet required standards.
A monetization strategy
Circular economy models will help companies create new revenue streams.
Besides reducing dependency on raw material and driving sustainable use of waste and by-products, chemical process companies will benefit from:
Value extraction from waste and by-products: In a circular economy, waste and by-products are seen as potential resources. The chemical industry can extract value from such materials, that were previously discarded, by implementing innovative technologies and processes. These waste streams can be transformed into valuable inputs for other industries or even for internal use. This not only reduces disposal costs but also creates new revenue streams and reduces the financial burden associated with waste management. For example, carbon renewable technology allows waste to be recycled, which would otherwise go to landfills, into sustainable fiber. This is produced from a combination of recycled waste content (40% mass balance approach), recycled cellulose (20%), and sustainably harvested wood pulp (40%). The result is a high-quality, sustainable fiber product made from 60% recycled content.
Product life extension and servitization: Circular economy strategies emphasize on extending the lifespan of products through repair, refurbishment, and remanufacturing. In the chemical industry, this can be applied to products such as chemical containers, equipment, and machinery. The industry can generate additional revenue and reduce the financial burden on customers by offering maintenance and repair services as well as product leasing or rental options.
For example, leasing chemicals instead of selling them to extend their use. Take a solvent, for example. A chemical provider could apply it to a company’s manufacturing process, then recapture and clean it for use by another company. This can be done by using cradle to cradle approach where solvents are designed and managed in a way that enables them to be reused or recycled after the current life cycle. This shift from a product-focused approach to a service-oriented model can also help the industry overcome cost barriers associated with capital-intensive investments.