Mathy Stanislaus

A circular economy, present and future challenges

Mathy Stanislaus
 Personal Background
• Senior Advisor to the World Economic Forum’s Global Battery Alliance and Platform for
Accelerating Circular Economy; Circular Economy Fellow at the World Resources Institute

• Senior political official in the Obama Administration (USEPA Assistant Administrator)

• Responsible for waste management, recycling, sustainable materials management, land restoration,
chemical plant safety and emergency response

• Led the effort to advance the transition to a circular economy through a life-cycle based sustainable
materials management approach as a key effort to advance climate change mitigation.

• Established public-private partnerships with the food sector to achieve SDG 12’s goal of reduce food
waste by 50% by 2030, and with the electronics sector to drive 100% of used electronics recycled to
certified recyclers

• Represented the U.S. at G7 deliberations that led to the formation of the G7 Alliance for Resources
Efficiency and engagement with manufacturers to identify best practices to advance resource
efficiency and circular economy in the supply chain.

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 Agenda

1 Why a Circular Economy is Needed

2 The Journey from Waste Management to Circular Economy

3 Circular Decisions Require Life Cycle Thinking

Circular Economy Implementation Strategies

4

5
Global Circular Economy Public Private Partnerships

6 Application of 4th IR tools to Drive Circular Economy

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 1. Why a Circular Economy is Needed?
The Acceleration of Raw Materials with Economic Growth

Raw material demand is projected to

double by 2060 (with metals tripling)
just to maintain current levels of
economic growth.
o Accelerating GHG emissions,
biodiversity loss and water
scarcity
o Growing global resource
consumption
o Asia -Pacific has increased its
global share of raw material
use from around 25% in 1970 to
above 50% in 2010, while
becoming a net exporter of raw
materials through large exports
of manufactured goods which
are mostly consumed in Europe
and North America 5
 Circular economy is a powerful strategy to address some of the most presssing
environmental, economic and social challenges of the 21st century
NEED FOR URGENT ACTION

2x During the 20th century the use of natural resources rose at about twice the rate of
Context

population growth3

RECOUPLING
In the last decade we have seen a recoupling of economic growth with material use,
with more materials being used per unit of GDP

Only 9% of
We extract over 84 billion of materials per year to meet the functional needs of society.
materials cycled
back Yet, only 9% of these materials are cycled back into our economies

Climate Change Approximately 50% of Green House Gases are emitting from the flow of materials in the
global economy

Estimates suggest that by 2050, if current trends continue, there will be more plastic
than fish in the ocean
 Circular Economy can accelerate the progress towards Paris
Agreement and and SDGs
Emission reduction commitments in NDCs address only half the gap between business as
usual and the 1.5 °C pathway. Of the remaining emissions, Circular Economy strategies can
contribute to further mitigating the emissions gap by about a half.

The Circular Economy is about Sustainable Production and consumption

transforming our production and CE would lead to less consumption of virgin materials
consumption approaches….

….but given the system transformation, it will positively impact a number of other SDGs.

Sustainable Cities & Communities

Zero Hunger
Reducing or reusing the present amount of
food wastage can feed 870 million hungry
people in the world
Clean Water & Sanitation
Circular Economy has been shown to
almost halve the no. of years of
anticipated water shortages in water
stressed regions of California
Clean Energy
In the US, community based solar power
plants are expected to provide 30GW of
power by 2020
Good Jobs & Economic Growth
About 500,000 jobs are created by the
recycling industry in the EU, and this
number could well rise in a CE scenario
In CE scenario, a city could source $ 21
billion worth of gold and silver that goes
into the electronics each year from its
own waste
Life Below Water
The European Commission is to adopt a
strategy on plastics in the Circular Economy
to reduce marine litter by 30% by 2020
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 Circular Economy can drive economic growth, create employment opportunities and decrease
the risk of resource conflicts

Circular Economy APPROACHES AND PRACTICES

Resource efficiency will be particularly important in supporting global prosperity in coming years
The CE and • In 2012 governments around the world released resource security strategies, in response to concerns
economic that reduced availability of some raw materials might reduce economic growth
growth

The CE and Jobs will be created across industrial sectors, through the development of local reverse logistics,
employment remanufacturing, repair and high-tech recycling and the development of a new service-based economy.
Existing studies point to the positive employment effects occurring in the case that a Circular Economy is
implemented3”

The CE and The systemic shift to a Circular Economy has the potential to make a significant contribution to mitigating
resource the risk of resource-related conflict
conflicts5 • Implementing a more Circular Economy will reduce stress on key resources such as freshwater and land,
and also reducing the impact of climate change
• According to the UN, ‘The challenges associated with preventing, managing and resolving natural
resource-induced conflicts may well come to define global peace and security in the 21st century’
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There is a 4-dimensional view on waste along the value chain in a Circular Economy

Wasted resources Wasted capacity

Material and energy that cannot be Underutilized or unused
continually regenerated products and assets

Introduce renewable and Manufacturing Logistics Increase sharing,

bio-based materials, co-owning, co-using,
chemicals and energy resource pooling, etc.
Marketing
Sourcing
& Sales
$1.7trillion $0.6 trillion
Wasted embedded values Product
Components, material and energy not Use
recovered at disposal

Increase recycling, Reverse End of Life Wasted lifecycles

upcycling, component
harvesting and energy
recovery
Logistics Disposal
Premature end
of working life of products
Lifecycle services for resell,
maintain, repair, remanufacture, etc.

$1.3 trillion $0.9 trillion

Source: Waste to Wealth, Accenture, 2015

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 Each industry has unique opportunities to leverage the Circular Economy

Industry Circular Economy Opportunities (Illustrative)

Food &
~33.3-50% of food produced (production stage in developing and consumption stage in developed
agriculture countries) is wasted or lost globally every year

Fashion & textiles In US, only 15% of used clothing is recycled or donated and ~10.5mn tons a year goes into landfills,
giving textiles one of the poorest recycling rates of any reusable material
Construction &
building 534mn tons of construction and demolition debris were generated in US in 2014, more than twice the
materials amount of generated municipal solid waste, 90% of this can be reused

Energy systems & The renewable energy use worldwide is expected to reach to only 26% by 2020 due to source variability
carbon and cost concerns

60% of the molecules provided by the European chemical industry to customer industries and end-users
Chemicals can be re-circulated

Electronics & hi- Total e-waste discarded in 2014 contained 1.9mn tons of Copper, 300 tones of gold, significant
tech amounts of silver and palladium, with $52bn in value globally

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2. The Journey from Waste Management to Circular
Economy

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 Strong Waste Management Program as
Solid Foundation for Circular Economy
U.S. Approach - “Cradle-To-Grave”
Hazardous Waste Management

• Producers of Hazardous Waste

Industrial Non-
• Transporters of Hazardous Waste Hazardous Waste
• Facilities that treat, store, or
dispose of Hazardous Waste Municipal Solid
Waste
• All must notify government, get
identification number, use
hazardous waste manifest
Construction
• The path taken by Hazardous & Demolition
Waste, from start to finish, is Debris
clear
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 The Waste Management Hierarchy Can Hinder Circular
Economy
The historic effort to implement
the “waste hierarchy” focused
on “waste” mismanagement and
diversion of “waste.”

These efforts did not recognize

secondary materials as a
valuable feedstock, nor more
impactful life cycle
based/upstream approaches to
minimize waste.

This is currently embedded in

international agreements and
national/subnational laws and
budgets.
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 A Circular Economy Hierarchy

Source: Centre of Expertise on Resources (2016), The Circular Economy and Developing Countries, The
Hague: COE resources. 14
 3. Circular Decisions Require Life Cycle
Thinking
Life cycle information offers greater
Influx of Processing
“return on investment.”
Design and
New Material/Resources Manufacturing

• Prioritizing and strategic planning.

.
Life Cycle
End-of-Life • Identifies most impactful life stages
Management of Materials Distribution
and impacts
Disposal
• Challenging preconceived ideas
about where and how to target
Use and
Maintenance
Retail efforts and policy approaches
2
• Avoids unintended consequences.
U.S. EPA Transition to Life Cycle Based Decision making
The materials, products and services were examined across
17 environmental criteria

Identified top materials, products and services from 480

products, services with the greatest opportunity to impact the
environment through sustainable approach to materials in key
sectors including:

• textiles,
• metals/electronics
• construction and development
• forestry
• Food products and services

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4. Circular Economy Implementation Strategies

Remanufacturing

Secondary Material Feedstock

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Rebalancing Regulations to Advance Circular Economy:
From Waste Management to Valuable Materials
• EPA’s amended recycling regulations to address the conflict between economic incentives
manufacturers for materials to be a valuable commodity for reuse and recycling in their
production process and waste management requirements
• Increased regulations to address mismanagement/shame recycling

• Removed from “waste” definition:

• in-process recycling, where materials are returned to the production process.

• Remanufacturing of value solvents from one industry (e.g., pharmaceuticals) being remanufactured
into similar high grade solvents in another industry (e.g., chemical manufacturing).

• Pharmaceutical manufacturers use at least 100 kg of solvents to make 1 kg of active pharmaceutical

ingredient.

Economic & Environmental Impacts

$59M/yr 344K metric tons
future cost savings CO2 equivalents/yr (GHG reduction)
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G7 Supply Chain Workshop: Advancing Sustainable
Materials Management/Circularity in the Supply Chain &
Economy

• Promoting more standardization across materials can help drive efficiency

by facilitating reuse, recycling, and remanufacturing.

• Changing perceptions about the quality of recycled or remanufactured

goods can open new markets

• Opportunities to reduce friction with respect to regulations, insurance rates,

and product and part warranties.

• Procurement Practices: Public and private sector procurement practices that

demand resource efficient products and services

• Enable New Models of ownership, e.g., service models

• Life cycle thinking in design and decision-making

• Transparent/verifiable EcoLabeling 19 8
“Re-defining Value – The Manufacturing Revolution. Remanufacturing, Refurbishment, Repair and
Direct Reuse in the Circular Economy” by UNIRP
Value Retention Processes
• GHG EMISSIONS: 50% LESS
• WATER USE: 90% LESS
• ENERGY USE: 80% LESS
• MATERIAL USE: 80- 99% LESS
• COST REDUCTION 44-95% LESS
• SIGNIFICANT JOB CREATION

Key Public Policy Recommendation Key Private Sector Recommendations

• reclassifying used products intended for VRP as “non- • Modify product design priorities to incorporate principles
waste” such as design for quality, durability and disassembly

• provide a level playing field for new products and VRP

products in taxation policies • Develop and VRP standards to guide industry practice

• embed VRP in public procurement

• Provide transparent and credible information to
• invest in efficient collection infrastructure while diverting customers about the quality of VRP products to
for VRP first objectively inform customer perceptions of risk and value
 Enabling Secondary Materials Feedstocks

International Green Deal North Sea Resources Roundabout (France,

Netherlands, UK, Flanders):

“Establishing viable systems for reducing end-of-life products to their raw

materials and returning them to manufacturers for inclusion in new products is
a key driver for the “circular economy.”

The“ use of waste material as a secondary resource is one of the first actions
that businesses could consider to improve both their economic and
environmental performance.”
seek solutions within the existing legal requirements, such as clarifying
or aligning the waste or resource classification, shipment procedures,
enforcement and administrative streamlining.

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 A collaboration and implementation
: Vietnam Materials Marketplace platform where manufacturers can
identify, qualify and execute by-
product material reuse in scale.
Sponsors
Govts & industry
leaders want to
partner
Materials Materials
Suppliers Materials Buyers
Want to Marketplace Want to
divert Platform consume
materials reusable
from waste materials
Solution Provider
Network
Provide important
products & services

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 The China Ban, Plastics in the Ocean, Trends in Banning Single
Use Plastics
a “moment” to reinforce the fundamentals of waste management /recycling
and drive circular approach
Key Challenges Emerging Market Challenges

- Locking out circularity by “locking in”

• balance investing/promoting recycling infrastructure, e.g., financing oversized WTE
versus “upstream” incentives such as facilities
design for recyclability

• Rebalancing the “business case” for
recycling versus the public funding
environmental/social investments in
recycling
• prioritize materials and infrastructure for
recycling and remanufacturing
- Informal sectors
- Leverage existing value chains
- Bridge solutions are necessary that includes
landfilling and energy recovery – not
necessarily new, large WTE facilities

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Overcoming Barriers to Financing Waste Management Systems and
Reducing Marine Litter: APEC Policy and Practice Recommendations:
Concluding Senior Officials’ Meeting Lima, Peru, 14-15 November 2016

• Develop end-of-life incentive policy to stimulate recycling market demand and

increase product recyclability;
• Develop guidelines on the development of definitions related to sustainable
materials management (SMM) that facilitate trade in new technologies, and
investment in recycling, recovery and other related SMM solutions
• Financing all phase of integrated waste management systems
• Set strong environmental standards with reliable and transparent monitoring;
consider community engagement strategies for transparency and accountability
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5. Global Circular Economy Partnerships
A public-private partnership seeking to ensure that batteries power sustainable development

Raw materials for batteries Circular economy for batteries Innovation along the value chain

Supporting responsible and sustainable value Accelerating the transition towards a circular Supporting collaboration to unlock
chains of key raw materials economy for batteries innovation along the value chain

Active Electronics Energy

Raw material Battery Battery and related Mobility Storage
industries
materials suppliers/ cell pack
traders

Global Battery Alliance Title of Presentation 27

 30+ members
Private
• Amara Raja Group
• Audi
• BASF
• China Chamber of
Commerce of Metals
Minerals & Chemicals
Importers and
Exporters (CCCMC)
• Enel
• Eurasian Resources
Group
• Everledger
• Fairphone
• Johnson Controls
• Mitsubishi Corporation
• NEC Corporation
• Responsible Battery
Coalition
• Responsible Business
Alliance
• RCS Global
Global Battery Alliance
Public Civil society & Academia
• Royal DSM • African Development Bank Group • Good Shepherd International Foundation
• Saft • Deutsche Gesellschaft für Internationale • International Justice Mission (IJM)
• Signify Zusammenarbeit (GIZ) GmbH • Pact
• Stanley Black & • International Energy Agency • Pure Earth
Decker Inc. • Organisation for Economic Co-Operation and • Transport & Environment
• Trafigura Group Development (OECD) • Corporate Responsibility Initiative, Harvard
• Umicore • United Nations Children’s Fund (UNICEF) Kennedy School of Government, Harvard
• Volkswagen • UN Environment (UNEP) University (Jane Nelson)
• White & Case • Washington State (Office of the Governor) • Center for Business and Human Rights, Stern
• World Bank Group School of Business, New York University
(Michael Posner)
• Department of Information Technology and
Electrical Engineering, ETH Zurich, Switzerland
(Vanessa Wood)
World Economic Forum ®
Title of Presentation 28
 Platform for Accelerating Circular Economy (PACE) is a Global Public-Private
Membership Platform to Accelerate Leadership, Collaboration,
Investment, Policy Reform and Action.

Knowledge
Partners
Co-Chairs

Naoki Ishii Frans van Houten Erik Solheim

CEO & Chair CEO & Chair Exec. Director
GEF Philips UN Environment

COMPANIES GOVERNMENTS ORGANIZATIONS

• Frans van Houten, CEO & Chairman, Philips
• Kees van Dijkhuizen, CEO, ABN AMRO
• Eric Schmidt, Executive Chairman, Alphabet
• Lisa Jackson, VP Environment, Policy, Social Initiatives, Apple
• Greg Hodkinson, Chairman, Arup
• Malek Sukkar, CEO, Averda
Leadership Group
• Fang Li, China Council for International Cooperation on
Environment & Development
• Jyrki Kateinen, VP, Jobs, Growth, Investment and
Competitiveness, European Commission
• Luhut Pandjaitan, Coordinating Minister of Maritime Affairs,
• Naoko Ishii, CEO, Global Environment Facility
• Erik Solheim, Executive Director, UN Environment
• Peter Lacy, Global Managing Director, Growth,
Strategy and Sustainability, Accenture
• Harald Friedl, CEO, Circle Economy

• Feike Sijbesma, CEO &Chairman, DSM
• Leontino Balbo Junior, CEO, Grupo Balbo
• Dion Weisler, President & CEO, HP Inc.
• Ralph Hamers, CEO, ING
• Carlo Messina, CEO, Intesa Sanpaolo
• Stefan Doboczky, CEO, Lenzing AG
• Arthur Huang, Founder & CEO, MiniWiz
• Jean-Louis Chaussade, CEO, Suez
• Tom Szaky, Founder & CEO, Terracycle
• James Quicey, President & CEO, The Coca Cola Company
• Gonzalo Munos, Co-Founder & CEO, Triciclos
• Paul Polman, CEO, Unilever
• Antoine Frerot, Chairman & CEO, Veolia
• Svein Tore Holsether, President & CEO, Yara International
community
Delegate
Indonesia
• Ibrahim Jibril, Minister of Environment, Nigeria
• Vincent Biruta, Minister of Natural Resources, Rwanda
• Edna Molewa, Minister of Environment and Water, South Africa
• Miro Cerar, Prime Minister of Slovenia
REGIONAL / DEVELOPMENT
INVESTMENT BANKS
• Werner Hoyer, President, European Investment Bank
• Luis Moreno, President, Inter-American Development Bank
• Kristalina Georgieva, CEO, World Bank
• Ellen McArthur, Founder, Ellen MacArthur Foundation
• Scott Vaughn, President, International Institute for
Sustainable Development
• Janez Potočnik, Co-Chair, International Resource Panel
• Izabella Teixeira, Co-Chair, International Resource
Panel
• Peter Bakker, President, World Business Council for
Sustainable Development
• Andrew Steer, President, World Resources Institute
• Marco Lambertini, CEO, World Wildlife Fund

>100 delegates from the member companies, governments, investment / development banks and organizations
 6. Application of 4th IR tools to Drive Circular Economy
• Reduce Manufacturing
Costs by 10 – 20 %, increase
speed and flexibility,
improved quality and
environmental outcomes
• 30% increase in agricultural
yield realizable through
precision agriculture
• Traceability projected to
significantly reduce the
cost of recycling, e.g., EV
batteries, and optimize
EPR programs

• 80% of companies expect

data analytics will
significantly influence
decision making
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 Impact of the identified 4IR production developments: The identified
4IR developments have the potential to drive transformative business
impact and contribute to a wide range of SDGs
Increase in
~30% agricultural yield
realizable through
precision agriculture.

80% Potential reduction in ~80% Lower greenhouse gas

emissions for cultured
wastage through meat production (vis-à-
Biofabricated Leather vis traditional farming).
production scaling

Of savings per year at Improvement in lead

$0.5m Intel’s Chandler, AZ ~80% time to manufacture
plant by using real time auto-components
info from chillers to through Additive
maximize efficiency Manufacturing

Cost saving and 7% weight

~15% reduction (providing equal
bending stiffness) for a
50/50 carbon and flax
hybrid bio composite
Sources: Accenture Research, Various