Circular economy not fulfilling promise
2024年7月18日 - 5:45PM
The circular economy, a critical strategy for delivering a
lower-emission, more sustainable future by reusing materials and
minimising waste has made disappointingly little impact on the
global plastics industry in the last decade as it struggled to
navigate traditional value chains and business practices according
to a new report by Wood Mackenzie. The July Horizons report: ‘Waste
to wealth: Unlocking circular value chains’ states that despite the
rising tide of corporate commitments and regulatory targets,
progress of the circular economy model has been extremely slow.
While there are profits to be made in circular value chains, the
fundamental problem remains ensuring these are shared fairly across
complicated, fragmented value chains.“The circular economy model
has not made the impact many plastics industry observers predicted
when it was first mooted, but there are some exciting initiatives
underway that could change that,” says Guy Bailey, Vice President
of Oils & Chemicals Research at Wood Mackenzie. “The successful
negotiation and introduction of the United Nations Plastic Treaty
[a legally binding agreement that would end plastic pollution] is a
necessary starting point, but the adoption of new business models
to drive coordination across the value chain is the key to real
change.”
The report states that currently petrochemical companies,
technology companies and waste management firms all operate with
different assumptions about what a ‘fair’ allocation of value looks
like. Without a route to profitability for all value chain
participants, the result is slower than anticipated technological
adoption and investment in the necessary waste infrastructure. The
report adds with so much added complexity in circular economy value
chains, commodity-producing firms – such as the petrochemicals
sector – must step up to the mark and help drive the necessary
coordination and collaboration through the adoption of novel
business relationships.
These frameworks include partnerships which are suitable for
less complex projects and offer companies the chance to retain
autonomy; joint ventures which are more suited to strategic
projects needing specialist market knowledge and vertical
integration which involves acquiring suppliers and distributors to
maintain complete control of a project. The report concludes by
making a series of recommendations to ensure that the circular
economy model overcomes its initial teething troubles and lives up
to the hype that has built up around it as a genuine economic
system that actually works. The recommendations include changing
strategic thinking to include how to bring about the value chain
transformation needed for success; encourage investors to
acknowledge the long-term benefits of first mover status in
circularity exceed short-term dilution of profits and for stronger
relationships are built with brands to ensure that the complex
value chains required are created. “The journey to full circularity
has not got off to an ideal start,” Bailey concludes. “But with
clear and consistent regulation and creative collaboration then the
circular economy model can still provide an effective solution to
reducing waste and lowering carbon emissions.”
- Global material consumption