The idea of a circular economy is not a new concept. It was raised in the 1990s by British environmental economists David W. Pearce and R. Kerry Turner. The circular economy is grounded in the study of living systems. The best example for such a “living system” in our industry context is a forest.
Nowadays, as discussed for example at the WEF in Davos, the circular economy is recognized as a transformation “to a circular and sharing economy that decouples manufacturing, production and consumption systems from natural resource constraints whilst optimizing the utilization of assets and democratizing wealth creation opportunities.”
Two major aspects of the circular economy, I would like to focus on, are:
- “waste is food”
- the notion of optimizing systems rather than components.
Waste is food
Living systems, like forests, overall, do not waste. A tree or branch that dies becomes earth and a new tree. Everything is circular. There are various ways to look at this from a business perspective:
Zero Waste and Circular raw materials
You could either replace resources for your own processes (virgin raw materials, or also energy sources) with other industry players’ waste or by-products – whilst saving cost, saving the planet, and supporting your sustainability message and brand.
Or you can strive for zero waste yourself: You either change processes to avoid waste at all or need to team up with a system partner that is willing (or even paying) to consume your waste.
Circular approaches in forest products
Companies like UPM (“The biofore company”), Stora Enso (“The renewable materials company”)), Sappi (“A leading global provider of woodfibre products and solutions”), Borregaard (The world’s most advanced biorefinery) and many others moved already from classical forest products into the bio-chemistry, “biofore”, tree-based value-chain – where much higher profitability can be achieved than in classical paper making.
What I would like to stress here is that such business transformation makes a lot of business sense. And yes, it has also strong aspects of the circular economy.
Closing the loop with black liquor
When I first heard about black liquor, it brought up sweet memories of Salmiakki from past visits to Finland: An alcoholic beverage (and a sweet) that was once considered so dangerous it was prohibited to sell. This is no beautiful Tequila Sunrise but rather looks like crude oil.
In the paper industry, though, black liquor is a side-stream in the production of kraft pulp.
Early kraft pulp mills discharged black liquor to watercourses. Black liquor is quite toxic to aquatic life – due to its chemical content. Pulp mills have used black liquor as an energy source (black liquor contains more than half of the energy content of the wood fed into a kraft pulp mill) since at least the 1930s.
Most kraft pulp mills use recovery boilers to recover and burn much of the black liquor they produce, generating steam and recovering the cooking chemicals.
New waste-to-energy methods to recover and utilize the energy in the black liquor have been developed. The use of black liquor gasification has the potential to achieve higher overall energy efficiency than the recovery boiler. Plus, it generates an energy-rich gas from the liquor. This gas can either be burnt in a gas turbine or converted through into chemicals or fuels such as methanol, dimethyl ether, or diesel.
Some state-of-the-art pulp plants separate the lignin from black liquor to take load of the recovery boiler and gain a valuable raw material to bio-based chemicals.
Cucumbers and CO2
The following example is a worthwhile read and an interesting evolution of the above-mentioned concept of optimizing systems not components– here including cucumbers.
The re-use of waste/by-products spans over multiple players in very different industries.
It explains the challenges to the business model for the pulp mill as an energy provider as
over time wood residues gained value and became scarce as demand increased.As a result, the model needed “fine-tuning” – to be profitable for the pulp mill and to create new business for the little town of Saint-Félicien.
As a result, the model needed “fine-tuning” – to be profitable for the pulp mill and to create new business for the little town of St-Felicien in Quebec, Canada.In the project, Resolute became a 40 per cent shareholder of
In the project, Resolute became a 40 per cent shareholder of Toundra Greenhouse, one of the most efficient greenhouses in Canada. Toundra Greenhouse is using heat and CO2 from the Resolute pulp mill.
While cucumbers might sound a bit outlandish for a pulp company, we see this joint-venture kind of business model more frequently, also in metals refining where companies have created a separate legal entity that owns and operates a shared refining plant.
Sharing wealth creation opportunities is a key concept of the circular economy. The models in use vary quite a bit. I may dive deeper into this in another, separate blog.
Also technological, this is an interesting case:
CO2 solutions, a company that specializes in carbon capture, plans to build its first commercial $7.4-million project to feed the greenhouses with 30 tons of CO2 per day captured from the pulp mill. CO2 Solutions already has a 10-ton per day demonstration unit in operation, which uses an enzyme-based technology, and plan to complete the project in 2018.
If you eat at Subway in Quebec or Eastern Canada, you are very likely to eat a pulp-powered cucumber along with it. Enjoy.
Read more on the circular economy in this SAP Digital Circular Economy Whitepaper.