The Circular Economy Opportunity

Pavithra Mohanraj

Founder & Director, Infinitive

First…..

infinitive

What we do

Capacity Building

Equip professionals to engage with circular models

Business Advisory

Help businesses derive value from circularity hotspots

Ecosystem Development

Map how CE implementation works beyond single businesses

Accelerate the transition to a circular economy

What we’re going to talk about today…

• What is the Circular Economy

• Why Circular Economy

• How the Circular Economy works

• How can you leverage the Circular opportunity?

We’re in the linear economy now…

Take Make Dispose

Materials Useable form

Bauxite Semi-finished aluminium:

80% of energy

67% of costs

80% of $3.2 trillion of

consumer goods sector is

lost annually!

Resource demand:

2014: 50 billion tonnes

2050: 130 billion tones

400% overuse!

INEFFICIENT!

If we do slightly better,

Technological improvementsResource efficiency

Overuse of 40 billion tonnes of natural resources

every year by 2050

Take Make Dispose

GDP and Resource Usage

1 % GDP0.4 %

Resource usage

The linear economy creates

a two-fold problem

Resource availability

Waste generation

We need a fundamental re-think of

how our economy works!

An economic system in which…

GDP growth

Resource usage

Decoupling

Take Make Dispose

Flow of Resources

Flow of Resources

Designing out Waste

Renewable Energy

Consumables

vs

Durables

Materials loop

at highest value

Restorative

&

Regenerative

System

Overview of the Circular Economy

Disruptions:

-Performance Economy

-Ownership Models

Digital / Physical

TechnologySystems Thinking

Biological NutrientsTechnical Nutrients

-Manage flows

-Return to

biosphere safely

-Circulate at

high value

-Keep out of

biosphere

Production & Distribution Systems

Why move to a circular economy?

Circular Economy is a $4.5 trillion opportunity!

Capitalize on opportunities

• Increase resource security

• Reduce energy consumption

• Reduce GHG emissions

• Job creation

• Innovation Driver

• Policy readiness

Mitigate risks

• Resource scarcity

• Commodity price volatility

• Waste generation

• Negative environmental impacts

• Earth overuse

Global headwinds – Individual and

Concerted Action

Import bans:

Plastic waste - China

e-waste - by Thailand

Used clothing –

East African nations

Others:

Plastic ban in Maharashtra

Regulations on

carbon emissions

EU Circular Economy Action

Package Law

UN Sustainable

Development Goals

Paris Climate Agreement

Why Malaysia?

Resource

Productivity

Innovation

Target: High income country by 2020

Circular Economy

Framework

Why CE for Malaysia

• Space for landfills ?

• Rapid urbanization and industrialization

So, how do we go circular?

Everyone agrees on the ‘why’ of the

circular economy,

but we’re still figuring out the ‘how’

5 business models of the circular economy

infinitive

Linear

Open Cascade

Partially open local /

regional loop

Closed global / local /

regional loop

Point of use

Point of use

Manufacturing

Point of use

Manufacturing

We need to move towards fully closed

loops to realize maximum value

Point of use

Manufacturing

Manufacturing

Point of use

Point of use

End-of-use products are discarded in landfills or incinerators

of countries where consumption takes place.

-Relevant for 80% of materials used in FMCGs

Linear

For some valuable products, end-of-use materials are

collected and sold to secondary markets, where

material flows/end-of-use are not regulated, resulting in

significant leakages.

e.g.: Brightstar, I:CO

Open Cascade

Point of use

Manufacturing

End-of-use products or components are collected and

returned to manufacturing facilities in the same regions

to be used in the production of the same or similar

products.

e.g.: Renault, B&Q

Partially open local / regional loop

Point of use

Manufacturing

Global closed loops

• End-of-use products or components are collected and returned to the countries where they

were manufactured to be used in production of the same or similar products, largely at

recycled material level. e.g: Ricoh, H&M, Airplane jet engines.

Regional closed loop

• Products are mostly maintained in countries where usage takes place.

• Some end-of-use/pre-owned products are collected, re-engineered/remanufactured

regionally, and sold into local markets. e.g.: SAB Miller, Desso.

Closed global / local / regional loopPoint of use

Manufacturing

Design is an important “how” of

achieving circularity

Biomimicry

Biomimicry Design for

disassembly

Multiple use

cycles and

durability Standardize

Design for

recyclability

Case Study:

Collaboration for a closed-loop value chainJaguar Land Rover & Novelis

Case Study:

Collaboration for a closed-loop value chain

RealCar and RealCar2

• Increased use of recycled Aluminium in vehicle manufacturing to 75%

• Helped Novelis reduce GHG emissions by 13%

• JLR Reclaimed more than 75,000 tonnes of Aluminium scrap in 2016/17

Pushing the envelope….

• JLR: RivAlloy can tolerate higher levels of impurities from aluminium scrap castings that were

previously disregarded

Case Study: Product as a Service

Philips: ‘Pay-per-lux’ model

Intelligent lighting system

• Designed by Philips

35%• Post

installation energy reduction

20%

• Further energy reduction through Optimisation

Industry 4.0 can translate the

Circular Economy to reality at scale and rapidly

Mobile

M2M

Cloud

Social

Big Data

Analytics

Trace & return

systems

3D Printing

Modular Design

& Technology

Advanced

recycled tech

Life & material

sciences

Digital

Hybrid

Engineering

Circular

Supplies

Resource

Recovery

Product Life

Extension

Sharing

platforms

Product as

a service

The circular economy needs…

Development

of entire

ecosystems

Emergence of

new players

Acceleration

of innovative

technology

Pre-

competitive

collaboration

So, how can you tap the circular opportunity?

Map linear risks and

opportunities

Identify solutions through

circular business models

Understand shifts in

the industry

Identify your role as a

circular solutions provider

Build strategic

collaborations

Bridge leadership and

skills gap

Pilot,

reconfigure,

scale!

Circular economy is a framework to

hedge risks and future-proof your business

There’s so much more to talk about…

Contact:

Pavithra MohanrajInfinitive

pavi@infinitiveco.in

Case Study 2 – Construction / Digital

Passport of materials that go into a building– start up

(also Maersk teams up with Korean company to do this in the

shipping industry)

Case Study 1 – Automotive / Product Life

Extension

(consider JLR /Novelis instead with numbers)

Tata Prolife, a pioneering after-market product support strategy for Tata Motors' customers.

Use of Tata Motors Prolife aggregate ensures original equipment-like-performance of the

vehicle even after the first life cycle. Tata Motors’ conducts its reconditioning at Prolife

plants in Lucknow and Coimbatore. The ambition is to minimize the product life cycle cost,

allowing the company to offer high quality products at a reduced price.

Tata Motors’ Prolife business has a wide variety of reconditioned products, from engine

long blocks, gear boxes, turbo chargers and air compressors to electrical components such

as starter motors and alternators. Tata prolife business reconditions about 23,000

equivalent engines in a year.

With such positive results, it is not surprising that Tata Motors’ Prolife is expanding into new

facilities at Surat and Hyderabad, India.

Bumper to bumper recycling –Banyan Nation

Renault + Synovate :

More obvious examples like Zoomcar – sharing platform + car subscription