FROM A LINEAR TO A CIRCULAR ECONOMY - Experiences from Denmark and New York on closing the loop through partnerships and circular business models ...
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FROM A LINEAR TO A
CIRCULAR ECONOMY
Experiences from Denmark and New York
on closing the loop through partnerships
and circular business models
2
FROM A LINEAR TO A CIRCULAR ECONOMY
Experiences from Denmark and New York on closing the loop
through partnerships and circular business models
Version 1.0
Printed June 2018
Front page photo
Kollision, Henrik W. Sivertsen
Editor in chief
State of Green
Technical Editor
Danish Cleantech Hub
Contributors to publication
ARUP: Tiffany Broyles Yost, sustainable-buildings@arup.com
Central Denmark Region: Hanne Juel, hanne.juel@ru.rm.dk
Closed Loop Partners: Ron Gonen, admin@closedlooppartners.com
ClosedLoops LLC: Benjamin Miller, info@closedloops.net
ClosedLoops LLC: Juliette Spertus, info@closedloops.net
Cradle to Cradle Products Innovation Institue: Emma Williams, info@c2ccertified.org
FoodPrint Group: Christina Grace, info@foodprintgroup.com
Ministry of Environment and Food of Denmark: mfvm@mfvm.dk
New York Department of Sanitation: Elizabeth Balkan, Twitter: @NYCSanitation
Portico: support@healthybuilding.net
Really: Wickie Meier Engström, wickie@reallycph.com
Refurb: mail@refurb.dk
The REMADE Institute: Nabil Nasr, contact@remadeinstitute.org
Rent the Runway: press@renttherunway.com
Waste and Resource Network Denmark, DAKOFA: dakofa@dakofa.dk
Woven: Clare Miflin, feedback@zerowastedesign.org
Ørsted: Simon Chignell, SIMCH@orsted.dk
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Copyright State of Green 2018
About this publication 3 ABOUT THIS PUBLICATION Circular economy is high on the international political agenda. However, we are only at the begin- ning of the journey towards becoming a circular economy. International co-operation and trans atlantic knowledge sharing is crucial in converting challenges into opportunities at a city, regional and global level. This publication is the outcome of a yearlong exchange of knowledge and experience between Denmark and New York, initiated by State of Green and implemented in collaboration with Danish Cleantech Hub in New York. The core of the project was a week-long circular site visit tour to Denmark for a group of selected New Yorkers representing both the public sector, the research community, impact investors, and international organizations. This group of New Yorkers, in close collaboration with their Danish counterparts, have been instrumental in facilitating and continuously expanding solution sharing between Denmark and New York, through seminars and co-creation workshops, proving an effective vehicle for transatlantic dialogue. This publication's purpose is to contribute to this exchange of ideas on circular economy, and through practical examples illustrate how Danish and New York stakeholders are providing solutions that help progress the transition towards a circular economy. Hopefully, this publication will inspire people to progress the transition towards a circular economy.
4 INDEX
INDEX
About this publication............................................................................................ 3
Foreword................................................................................................................. 5
Creating circular frameworks................................................................................ 6
The transition to a circular economy requires holistic approaches and frameworks.
Designing circular buildings.................................................................................. 8
Tapping into the circular potential of rethinking the built environment.
Unleashing the circular potential of biowaste................................................... 10
Biodegradables, food and organics hold a large untapped potential for circularity.
Circular fashion and textile production.............................................................. 12
Changing the environmental impact of the textile industry.
The business of remanufacturing....................................................................... 14
Expanding the application of remanufacturing and refurbishment.
Data driven circularity.......................................................................................... 16
Digital technologies enable new ways of taking part in the circular economy.
Sharing platforms enabling circularity............................................................... 18
Unlocking the value of unused or underused assets.
Circular strategies for packaging........................................................................ 19
Innovation and value chain collaborations are central to rethinking packaging.
Foreword 5
FOREWORD
We are experiencing a period of change more rapid than any other in
human history. Automation, the gig economy, and digital technology are
transforming the way our goods are produced, the way we work, and the way
we communicate.
Kate Daly, Executive Director, Center for the Circular Economy @ Closed Loop Partners
This moment of exponential change, char- Cities are in a unique position to question circular solutions and technologies that are
acterized by some as the fourth Industrial all the assumptions of the linear economy already being implemented in those cities
Revolution, brings many challenges but and create new opportunities for job cre- and nations who have made the transfor-
is also an opportunity for us to harness ation and prosperity. New York City repre- mation to circularity a top priority.
emerging technologies to address the most sents a huge market for goods and is home
dysfunctional and unsustainable legacies to anchor industries like financial services, Denmark has long focused on increas-
of the first three Industrial Revolutions, manufacturing, tech, real estate and ing recycling rates and utilising waste
and to disrupt business as usual with inno- fashion that could be market leaders in the streams, and has identified significant
vative new approaches. But we need to act transition to a circular economy. And in this opportunities for these areas to positively
fast. transitional moment, we have the oppor- impact economic growth while resulting
tunity to identify what it would look like to in environmental benefit. The strength of
Our sense of urgency comes from the fact create an equitable, inclusive economy as these efforts derives from a collaborative
that in 2012 the world’s cities generated new, circular business approaches create approach, as the Danish government works
1.3 billion tons of solid waste, a number the jobs of the future, both high-tech and closely with the private sector and aca-
that is expected to rise to 2.3 billion tons low-tech. demic institutions to develop strategies
by 2025 due to population growth, rising that will accelerate the circular transition.
middle-class consumption, and increased New York City’s ambitious policy goal of Cities around the world, from Copenhagen
urbanization. Our traditional models of zero waste to landfills by 2030 and its com- to Tokyo to New York City, are demon-
growth and prosperity have not kept pace mitment to an 80% reduction in green- strating leadership through partnerships
with our world’s exponential growth, house gases by 2050 demand innovative with philanthropy, research institutions,
technological developments, and new solutions. New York City’s robust supply of emerging and established companies,
opportunities. Nations spend billions of talent, capital, and thriving tech ecosystem and entrepreneurs, who together form an
dollars annually to landfill resources that is a strong platform from which to catalyze ecosystem of innovation that is critical to
are themselves worth billions of dollars. those solutions. New York City is power- disrupting linear systems and tapping new
fully positioned to capitalize on circular economic opportunity.
The $1 trillion question before us all is: how economy principles that reflect market
do we turn this waste into revenue and opportunities: decoupling growth from Collaboration and public-private part-
jobs? How do we together transition from consumption, design that incorporates nerships across industries, across cities,
a “take, make, waste” economic model to modularity and upgradability, technologi- and across nations is critical as we work
a circular “take, use, share, return” model? cal innovation, and new sharing economy together to solve these urgent challenges
This emerging model is relevant to indus- and product as a service business models. and generate jobs and prosperity. Together
tries that play an important role in all of our we can create a shared vision for the circu-
lives, from the food we eat and the clothes New York City’s support of innovative lar city.
we wear to the buildings we inhabit. Our technology and design is only a first step in
planet’s raw materials are finite, but a catalysing profitable solutions to the City’s Kate Daly
circular economy, in which we take full ad- own circular challenges, and driving busi- Executive Director
vantage of currently untapped resources, ness growth across multiple industries. Center for the Circular Economy
allows for systems change without sacri- But we can’t do it alone. We have much to @ Closed Loop Partners
ficing economic gain. learn from efforts across the globe, and the
6 Creating Circular Frameworks
CREATING CIRCULAR FRAMEWORKS
The transition to a circular economy requires
holistic approaches and frameworks.
To capture the immense potential and benefits of the circular economy, high levels
of coordination across sectors and public-private divides are necessary.
In Denmark, a growing national political A common denominator of the voluntary sector can apply circular product design.
willingness to spearhead and coordinate platforms is how they aim to increase Environmental Product Declarations, ISO
the development of holistic policy frame- participants’ ability to implement circular 14044 Life Cycle Assessment, and Cradle
works is arising, whereas the progress in economy principles into their respective to Cradle are among some of the most influ-
New York has largely been driven by vol- core strategies, which are primarily based ential schemes. On the part of consumers,
untary standards and private initiatives. on considerations of long-term profitability certification schemes also support more
Although the goals are similar, the mecha- potential. International examples include active and informed choice by giving users
nisms, incentive structures, nature of ben- CE100, Project MainStream and Circular better tools to evaluate and select goods.
efits and barriers that each approach can Cities Network – the latter of which New
overcome varies. Closer cross-Atlantic col- York City and Copenhagen are members of. Policy and the circular economy
laboration could allow for greater sharing In their 2015 case study of Denmark, The
of best practices and a deeper understand- "The transition to a circular Ellen MacArthur Foundation estimates
ing of the differences in drivers. This could economy is a systemic change. that national GDP may increase by 0.8-1.4
ultimately enable both Denmark and New In addition to targeted actions percent by 2035 if principal steps towards a
York to create more advantageous circular affecting each phase of the value circular economy are taken. A combination
frameworks and conditions. chain and key sectors, it is necessary of public-private collaboration and coor-
to create the conditions under which dinated policy efforts are key to obtaining
Voluntarism spurring a circular economy can flourish and this goal. Barriers related to cross-sectoral
circular frameworks resources can be mobilised." and non-financial issues must also be ad-
Companies, organizations, public-private “Closing the loop - An EU action plan for the dressed. Working cooperatively should
initiatives, and collaborative partnerships Circular Economy”, European Commission therefore not be limited to voluntary ini-
have become the main initiators of large- tiatives. It must also apply for legislative
scale certification schemes and interna- Certification and standardization schemes efforts.
tional platforms. Each of these engages are also increasingly shaping circular
cities, industries, or subsectors in coordi- economy conditions. In general, these Holistic political visions and frameworks,
nated efforts to increase circularity. schemes focus on how the private like the EU action plan for the Circular
Economy from 2015, can also be instru-
mental in sending clear signals to economic
operators. Likewise, transnational political
visions may also enable more cohesive
legislation within areas such as solid waste
management, building codes, public pro-
curement policies, environmental stand-
ards and the creation of well-functioning
secondary markets.
Illustration: Nature Publishing Group
Creating Circular Frameworks 7
The importance of Cradle to Cradle Certification thousands of products using the guidance the program provides.
The Cradle to Cradle CertifiedTM Product Standard, founded by Since its initiation, Cradle to Cradle Certified has become one of the
William McDonough and Michael Braungart, guides designers and most well-known product certification standards for the circular
manufacturers through a continual and systematic improvement economy and its impact is continuously being documented. For
process that looks at a product through five parameters — material companies, the certification process has brought benefits such as
health, material reutilization, renewable energy and carbon man- reduced costs, improved product value, new revenue streams and
agement, water stewardship and social fairness. The third-party it has helped companies become front-runners in the transition to
product certification program is independently administered the circular economy.
by the Cradle to Cradle Products Innovation Institute. Hundreds
of companies have designed, manufactured and optimized Cradle to Cradle Products Innovation Institute
A national advisory board for circular economy in Denmark improving waste legislation, to advancing tech startup innovations,
In 2016, the Minister for Environment and Food, and the Minister for increasing resource efficiency and encouraging public procurement
Industry, Business and Financial Affairs established the Advisory to focus on circularity. The Advisory Board has been instrumental in
Board for Circular Economy. Consisting of 12 Danish business creating cross-sectoral understanding in Denmark of the challenges
leaders from a range of different industries, the board was tasked and potential that the circular economy entails, as well as promoting
with developing a vision for Danish businesses’ transition towards a national legislative framework that can help break down barriers
a more circular economy, and compiling a set of recommendations associated with moving from a linear to a circular economy.
to the Danish Government for how to create the legislative frame-
work needed to allow for this transition. Ministry of Environment & Food,
Ministry of Industry, Business and Financial Affairs
In 2017, the Advisory Board delivered its vision, along with 27 recom-
mendations to the Danish government ranging from suggestions for
Illustration: Danish Ministry of Environment & Food, Kontrapunkt
8 Designing Circular Buildings
DESIGNING CIRCULAR BUILDINGS
Tapping into the circular potential of
rethinking the built environment.
Circular economy principles could offer the construction sector a transformative possibility by
considering concepts such as modular design, prefabricated and off-site construction, design for
disassembly, materials recycling and designing out waste.
The engineering and construction industry Denmark and New York also share a will- that are central to the circular economy.
is the world’s largest consumer of raw ma- ingness to let cities become architectural Both Denmark and New York are home to
terials. It accounts for 50 percent of global playgrounds. To advance circularity in the forward thinking businesses in this indus-
steel production and consumes more than built environment, a range of different try, increasing the collaborative potential.
three billion tons of raw materials. The stakeholders must engage and invest in
trade between the US and Denmark within new solutions. In Denmark, public housing Supporting local goals
the construction sector reached $US 205 and municipal buildings are among the first Circularity is not only an applicable ap-
million in 2016. These well-established movers. In New York, large and progressive proach when building from scratch. The
trade relations create a solid foundation universities and real estate companies rep- mindset can also guide retrofit strategies
for exchanging know-how and solutions resent an enormous potential for advanc- or enable upcycling of buildings, which
related to designing circular buildings. ing circular buildings. enables energy savings and emission re-
ductions from buildings. In a city like New
Architectural traditions “Better construction and use of York, where it is expected that more than
The collaborative potential between buildings in the EU would influence 42 90 percent of the one million buildings that
Denmark and New York not only rests on percent of our final energy consump- exist today will still exist in 2050, such an
trade relations. It is also rooted in a joint tion, about 35 percent of our green- approach is vital for the scalability of circu-
interest for spectacular and modern archi- house gas emission and more than 50 lar solutions. Subsequently, circularity in
tecture. During the last decade, signature percent of all extracted materials” the built environment can also be a driver
buildings from Nordic architects such as “Roadmap to a Resource Efficient Europe”, to reach local climate goals. In the case of
White Architects, BIG Group, and Snøhetta European Commission Copenhagen, buildings play a crucial role
have become part of the iconic New York in the city’s plan to become carbon neutral
skyline. These have paved the way for a In addition to passionate building owners, in 2025. The same is the case for New York
growing New York interest in Nordic design the design of circular buildings also re- City and its objective of reducing carbon
philosophy, material choices, and building quires the involvement of architecture, en- emissions by 80 percent by 2050 and the
traditions. Optimizing exchange of the con- gineering and the construction industry to city’s commitment to the Paris Climate
siderable amount of circular know-how and break down silos. Looking at these subsec- Agreement.
best practices being developed currently tors as one common industry will be essen-
would be a natural continuation of this ex- tial in supporting the necessary innovation
citing collaboration. and building the value chain collaborations
A cross-Atlantic partnership for circularity in order to display these solutions. The Circularity Lab is a further
The Circularity Lab is a cross-Atlantic partnership between Google, development of The Circular Building, which was displayed during
Arup, Turner Construction, and 3XN Architects/GXN Innovation. the London Design Festival in 2016. This project will play a vital
Initiated in 2017, the partnership aims at exploring the use of role in creating awareness in the US about the possibilities and the
circular design principles in architecture, engineering, and the immense potential circular building principles have to alter how
construction industry. Furthermore, it seeks to illustrate state- buildings are constructed.
of-the-art solutions related to circular building products, materials
tracking, and design for disassembly. The partnership will con- Google, Arup, Turner Construction, 3XN Architects
struct full-scale prototype buildings in the San Francisco Bay Area
Designing Circular Buildings 9
Central Denmark Region pioneering the circularity city the project as purchasers of solutions and as early adopters when
The Central Denmark Region consists of 19 municipalities with a constructing public buildings. More so, Circularity City also makes
combined population of 1.3 million people. For several years, re- funding available for companies that wish to collaborate and create
gional authorities have worked with local businesses to develop new solutions, essentially making Central Denmark Region a hub
focused value chain collaborations and innovative circular business for innovation related to circularity in the built environment. The
models. In 2017, the Central Denmark Region launched the project solutions and learnings from Circularity City will have widespread
Circularity City, which aims to close the loop between supply and international application and scalability.
demand for circular solutions by engaging the entire building
community, including building owners, manufacturers, architects Central Denmark Region
and researchers. Therefore, municipalities play a critical role in
Developing zero waste guidelines for building design The authors of the guidelines – Clare Miflin, Juliette Spertus,
In 2017, the American Institute of Architects New York, with Benjamin Miller and Christina Grace – developed the guidelines
support from the Rockefeller Foundation, published the Zero through multidisciplinary workshops with 100 collaborators in-
Waste Design Guidelines. The guidelines address the crucial role cluding architects, planners, developers, city officials, recycling
that design plays in achieving NYC’s ambitious goal, outlined in experts and building managers. With the publication, the New York
OneNYC, to send zero waste to landfills by 2030. Material manage- building industry has risen to the challenge of designing buildings
ment such as energy and water management needs to be designed with circularity in mind and created a tool with both local and global
into our buildings and public spaces to reduce the generation of potential.
waste and increase the diversion of recyclable materials. AIA NY Committee on the Environment,
Kiss + Cathcart Architects, ClosedLoops & Foodprint Group
10 Unleashing the Circular Potential of Biowaste
UNLEASHING THE CIRCULAR
POTENTIAL OF BIOWASTE
Biodegradables, food and organics hold a
large untapped potential for circularity.
A circular economy aims to keep products and materials at their highest utility and value.
Nonetheless, waste is a reality, but circular strategies can be applied to prevent waste, finding
ways to transform by-products into high-value ones and increase recycling.
Preventing organic waste and capturing cheese production to make high-protein to send zero waste to landfills by 2030. This
the full value of biowaste streams will be products for the pharma industry, while ambition is an element of the city’s plan to
central in the transition towards a circular the Danish potato processing industry reduce emissions and dramatically increase
economy. Denmark and New York could transform residual potato fibers into a recycling. As to reach this zero waste
gain from tapping into each other’s strong- protein-rich food additive. Any final biode- goal, the city has initiated a wide range of
holds within areas such as food processing gradable waste from these industries are volunteer initiatives that aim to educate
and organic collection systems. presently co-digested with farm slurry and citizens, increase biowaste collection,
used for agricultural purposes. Modeling increase the use of anaerobic digestion
Industrial by-products suggested that if cascading bio refining and minimize waste generated. Learnings
The food production sector holds great within the food and beverage industry generated from this program may very
potential for the utilization of side streams was fully applied, it could yield a yearly net well also prove useful in a Danish context.
and the efficient use of by-products with value of EUR 300-500 million in Denmark For instance, the Danish Environmental
the key being to maximize resource effi- alone. Protection Agency has estimated that 56
ciency and minimize waste. The principle percent of the food waste generated by
is called profit-driven cascade utilization Household biowaste Danish households is avoidable. To address
or bio refining, a method for increasing the In New York City, more than 3 million tons this challenge, informing and educating
value of side streams. of residential waste is generated annually. consumers should be a priority. This shared
Of this waste stream, it is estimated that set of challenges create strong incentives
In Denmark, the country’s biggest meat pro- up to 31 percent consists of food scraps, to share best practices and further develop
cessing company, Danish Crown, manages garden waste and soiled paper suitable for knowledge sharing between public agen-
to use all parts of the pig’s carcass in their recycling. To capture the value of this bio- cies and private partners in Denmark and
production chain. Similarly, dairy producers waste, and the remaining waste stream, New York.
take advantage of the by-products from the City of New York has committed itselfUnleashing the Circular Potential of Biowaste 11 Large scale collection of residential with both public and private stakeholders to receive and manage organic waste in New York City the waste. This includes expanding compost facilities, as well as With the Organics Collection Program, the City of New York has initi- co-digestion capacities at wastewater treatment plants. Though ated the largest residential program for collection of organic waste these steps may be associated with initial costs, the purpose of the in the US. The program ensures the distribution of organic waste program is to create long-term solutions and unleash the business bins for households. All New Yorkers will receive either curbside potential of unused biowaste. service or have access to convenient neighborhood drop-off sites. Furthermore, the program also requires planning and collaboration New York Department of Sanitation Dissolved organics from unsorted waste for biogas metals. Second, non-recyclable materials such as textiles. Third, a With the development of Renescience, the Danish energy company fluid made from the dissolved organic parts of the waste, which is Ørsted has made it possible to extract organic matter from unsorted then converted to biogas. With this innovative technology an empty household waste. This is possible by the application of an innovative juice carton is no longer an obstacle to recycle, as the plant can dis- technology that intelligently separates waste using both mechanical semble both the outside paper, the inside foil, the plastic skewer cap sorting, enzymes, recycled water and anaerobic digestion. The plant and even the pulp of juice leftovers. sorts unsorted waste into three groups. First, recyclable plastic and Ørsted Photo: Ørsted
12 Circular Fashion and Textile Production
CIRCULAR FASHION AND
TEXTILE PRODUCTION
Changing the environmental impact of the textile industry.
Global apparel consumption is projected to rise by 63 percent,
from 62 million tons today to 102 million tons in 2030, emphasizing
the need for strategies to increase circularity in the fashion industry.
Encouraging a circular intended to secure longer usage of an item, the economic and the environmental po-
fashion economy enabling several reuse-cycles, as well as tential. Today, there exists significant un-
In May 2017, global fashion brands and increasing the recycling potential. These tapped potential within textile recycling,
retailers came together in Copenhagen principles represent enormous potential as most clothing items end up in landfills,
to accelerate the transition to a circu- to create positive environmental impacts are lost in production and only up to 12
lar fashion system, by signing the 2020 if widely adopted in the textile and fashion percent is recycled for lower end use as e.g.
Circular Fashion System Commitment. industry. insulation material.
Industry leaders such as Adidas, Bestseller
and Eileen Fisher pledged to implement “If the industry manages to fully This supports the need to rethink the entire
design strategies for recyclability, increas- close the loop between the end-of use textile value chain in order to improve the
ing the volume of used garments that are phase and the raw materials phase, sector’s sustainability and resource effi-
collected and resold, and to increase the recycling apparel and footwear waste ciency. Disruptive and collaborative actions
share of garments made from recycled into new input materials, the environ- could include the establishment of indus-
post-consumer textile fibers. With current mental footprint of the entire indus- try-wide end-of-use garment collection,
signatories representing 7.5 percent of the try will be drastically reduced. This new business models and a breakthrough
global fashion market, this signals a signifi- type of circular model is the ultimate in recycling technologies combined with
cant step towards the creation of a circular aim of all actions targeting recycling” continued sustainability education in order
fashion industry. Pulse of the Fashion Industry, to increase consumer engagement. The
Global Fashion Agenda & collaborative potential between Denmark
This move towards circularity is also a The Boston Consulting Group and New York in this regard is also promis-
response to fast fashion, which currently ing and the sharing of best practices could
means that half of global clothing produc- Recycling of textiles stand to benefit both economies.
tion is discarded within less than a year. Capturing an increasing amount of current
Long lasting designs, as well as high-qual- and future textile waste suitable for recy-
ity and carefully selected materials is cling is essential in order to leverage bothCircular Fashion and Textile Production 13
Image: Angela Moore
Upcycling end-of-life textiles very flexible. The fabric is sourced from the fashion and textiles
A central challenge for the fashion and textiles industry is how industry, industrial laundries, households, and cut-offs from the
to make good use of textiles that are at the end of their lifespan. textile industry. To expand use practices of the products, Really
Danish company Really has taken up this challenge, and developed collaborated with designer and material enthusiast Max Lamb for
a range of solid textile boards and acoustic textile felts using end- the international furniture fair, Salone Milan 2017. The collabora-
of-life wool and cotton. These non-woven materials are made by tion led to the development of a series of innovative benches dis-
blending small textile fibers with binder, a process that does not playing the strength and diversity of the material. Really is partly
require water or chemicals. The combination of textile and binder owned by high–end textile design manufacturer, Kvadrat.
give the boards unique properties and characteristics. The boards
can be processed and treated as a wooden material, however, it is Really, Kvadrat
Educating the designers of tomorrow an accelerator program, supported by the State of New York and
In the world of fashion and textiles, universities are driving the New York City, that researches environmentally friendly textiles’
erosion of inter-industry silos between designers, textile man- sustainability from a business perspective. Similarly, the Tishman
ufacturers and the recycling industry. New York universities are Environment and Design Center at The New School is contesting
starting to change the way they work with fashion and design in conventional thinking in the industry by integrating design and
acknowledgement of the challenges and not least the potential environmental studies, essentially ensuring a cross-sectoral work
this field holds to increase circularity. Design schools such as the on both research and courses between the different institutes at
Pratt Institute, Parsons School of Design, and The Fashion Institute the New School.
of Technology are spearheading the development of new materials
and innovation in design practices, while also educating future Pratt Institue, Tishman Environment and Design Center
industry leaders. As an example, the Pratt Institute has created14 The Business of Remanufacturing
THE BUSINESS OF
REMANUFACTURING
Expanding the application of remanufacturing and refurbishment.
The manufacture of goods requires energy and raw materials for production input,
which can be both scarce and costly. Remanufacturing of goods encompasses substantial
economic potential and could help slow down consumption of our natural resources.
Companies within a range of different years include aircraft components, au- be troublesome for the manufacturing
sectors have developed positive business tomotive parts, electrical and electronic industry to establish take-back systems
cases based on remanufacturing and equipment, engines and components, and ensure the components remain in good
refurbishment. In order to expand these medical equipment, office furniture, print- condition many years after initial produc-
capabilities into new sectors, Denmark and ing equipment as well as restaurant and tion. Innovative businesses in Denmark and
New York have launched new, innovative food-service equipment. In Denmark, 3R the US have overcome these challenges by
initiatives, which encompass global poten- Kontor specializes in the remanufacturing rethinking the design of components, em-
tial, making continuous cooperation and of used office furniture for reselling, using ploying reverse logistics, business models
Transatlantic learning highly valuable. environmentally friendly processes, and and creating new recycling systems.
donating excess furniture and parts to Utilizing this experience across the Atlantic
The gains of remanufacturing schools and charitable organizations. and highlighting best practices will be vital
and refurbishment to expand awareness and to accelerate the
The US is the world's largest producer, “The most important market failures transition.
consumer and exporter of remanufactured are the transaction costs related to
products. As of 2012, it was estimated that finding and negotiating with new For several years the American mass
the value of US remanufactured produc- suppliers, since remanufacturing retailer Walmart, has sold refurbished
tion had reached $US 43 billion and sup- could significantly disrupt material electronics in their stores, a practice that
ported 180,000 full-time jobs. In Denmark, flows across the value chain; and the is becoming more widespread in Denmark.
modelling suggests that increased rema uneven distribution of knowledge Challenges to increase the popularity and
nufacturing within selected sectors could among manufacturers about the eco- availability of these often price-reduced
create an estimated potential net value of nomic potential of remanufacturing products include consumer education,
EUR 150–250 million annually by 2035. The and new business models.” product transparency and large-scale take-
American company CaterPillar is a good Ellen MacArthur Foundation back systems. When it comes to large-scale
example of a company that has succeeded refurb business models, Denmark may be
in systematically incorporating remanu- Overcoming conventional challenges able to learn from American successes and
facturing via their brand Cat Reman, that Even though the potential gains are frontrunners.
has existed since 1973. Other segments often noticeable, remanufacturing and
that have pioneered remanufacturing for refurbishment can be challenging. It canThe Business of Remanufacturing 15
Photo: Refurb
The business of refurbishing electronics companies such as Dell, Apple and HP. To ensure transparency
90 percent of the components in a computer, tablet or smart phone about the product’s condition, Refurb uses a grading system from
are reusable. Since 2008, Danish Refurb has made it the core of A+ to C, with evaluations based on a number of criteria including
their business strategy to refurbish used IT equipment. By reusing cosmetic condition, performance and battery capacity. This has
viable parts, the company reduces electronic waste and the sub- been a principle to overcome the challenges of consumer confi-
sequent environmental footprint, increases value recovery and dence and associated willingness to buy refurbished products.
provides customers with products at a competitive price. In order Finally, Refurb employs strategies for improving material health,
to secure the scalability of their business model and the supply of using renewable energy and reducing packaging waste.
used electronics, Refurb collaborates with larger companies and
public institutions, creating their own informal take-back system. Refurb
The company is independent, and refurbishes electronics from
An organic eco-system for re-manufacturers companies, national labs, industry trade associations, and foun-
Founded by the U.S. Department of Energy and led by the dations. REMADE works to combine early stage applied research
Sustainable Manufacturing Innovation Alliance, the Reducing with the development of key industrial platform technologies.
EMbodied-Energy And Decreasing Emissions Institute (REMADE Innovations are primarily within metals, fibers, polymers and
Institute) is actively seeking innovative sustainable solutions to electronic waste. The technological focus areas include improv-
secure the competitiveness of American manufacturers, decrease ing system analysis and understanding material flows, design for
dependency of scarce resources and overcome technological and reuse and disassembly, manufacturing materials optimization,
economic barriers that limit the efficient use of existing resources remanufacturing and recycling.
and products. The 100+ institute partners include universities, REMADE Institute16 Data Driven Circularity
DATA DRIVEN CIRCULARITY
Digital technologies enable new ways
of taking part in the circular economy.
The internet of things, big data and digital connectivity will allow for unparalleled data collection;
providing insight into the workings of our cities and inspiring new business models.
Asset tagging and management shipping industries are first movers within enormous, as it is projected that city au-
In the circular economy, identifying com- creating material passports. Combining thorities globally will spend $US 41 trillion
ponents in goods and products can be assets tagging and geo-spatial information on infrastructure upgrades to benefit from
important. Tracking and collecting data makes it possible to provide insight into the internet of things and real-time data
from the beginning to the end of the pro- the flow of materials, products and people in the next 20 years. In addition, the wide-
duction process and in a product enables across a city. This enables a more targeted spread and easy access to smartphones
consumers and suppliers to better extend and efficient planning of for instance traffic, has supported a more efficient use of over-
the lifecycle, utilize or loop the asset. energy demand or waste management. capacity enabling circular business models
This has spurred the creation of product such as sharing and leasing platforms. This
passports, which essentially are digitized The potential of connectivity ultimately has enabled citizens to make use
information about an asset’s material com- An estimated 10 billion physical objects of the increased connectivity and actively
position, history, or condition. Additional with embedded information technology take part in the circular economy.
information regarding the location or the exist in 2018, and many more connected
availability of the asset can also improve devices will follow, along with new net- Denmark and New York are both explor-
its utilization. Major American corporations works for interconnectivity. This will ulti- ing the potential of these technologies,
such as GE, Honeywell, IBM, and Google mately be a vital element of creating smart paving the way for increased transatlantic
have all taken steps towards implementing and circular cities in the future. The com- partnerships, research collaboration and
large scale asset tagging and management mercial potential for both Danish and New commercial cooperation.
systems. In Denmark, the building and York-based businesses within this field isData Driven Circularity 17
An online tracking tool for products and materials and GreenScreen. Furthermore, the tool can host a diverse set of
As a compressive and growing data platform, Portico supports applications tailored to the needs of the users, thereby expanding
the management of healthy products and materials and enables the boundaries of the problems data can help solve. Altogether,
direct communication between different stakeholders in the built Portico is a principal example of how data collection and asset man-
environment. Portico was developed by the American non-prof- agement can support the circular economy, as this tool allows the
it organization Healthy Building Network in partnership with entire building industry to track products and materials, which is a
Google. This transformative open source data platform collects cornerstone of ensuring systematic reuse and recycling.
information from already developed standards and certification
schemes such as Cradle to Cradle, the Health Product Declaration, Healthy Building Network, Google
Material passports in the shipping industry identifying assets is also instrumental in reducing dependency
Through material passports, the Danish shipping company Maersk of scarce virgin resources for materials such as steel. The project
Line is keeping track of materials throughout the lifecycle of their requires the continuous active involvement of more than 75 sup-
vessels. This innovative and systematic collection of data about pliers and the experience generated from these efforts will be
the materials used and their location, is expected to help Maersk shared with the Sustainable Shipping Initiative, with the aim of
Line increase recycling rates of materials used for building ships. broadening the application of this type of material management in
The passport not only functions as a tracking list, it also entails the shipping industry.
guidelines for how to disassemble and recycle the materials when Maersk Line
they can no longer be used as originally intended. This way of
Photo: Maersk Line18 Sharing Platforms Enabling Circularity
SHARING PLATFORMS
ENABLING CIRCULARITY
Unlocking the value of unused or underused assets.
Sharing economy refers to consumption through the sharing of already existing goods or
products. Sharing economy platforms have become widely adopted, allowing the sharing of
anything from goods, transport and space, to knowledge, money and data.
Although becoming increasingly common, on a subscription model that provides necessarily expanding production. In ad-
the potential of the sharing economy, in children’s’ clothes for a monthly fee. The dition, the sharing economy, for instance
both Denmark and New York, is far from garments are returned when the child has in the form of ridesharing, can satisfy
realized. As innovative platforms will con- outgrown them. Another example is the growing mobility needs, providing trans-
tinue to disrupt traditional modes of own- NYC Citi Bike program, which has become portation without increasing the number
ership, users from all over the world will the largest of its kind in the US. Since its of cars on the street. Similarly, apparel
benefit from the sharing of ideas and best launch in 2013, it has expanded to include platforms take advantage of the fast-fash-
practices. more than 10,000 bikes that the more than ion trends that make consumers upgrade
100,000 annual members can use whenev- their clothes frequently. These business
From selling a product to er they need. This type of business model models could help counter the throwaway
providing a service relies on consumers’ interest in having culture, while also encouraging high-quali-
The sharing economy takes multiple access to a service when needed, rather ty clothes with increased durability.
shapes and forms. In some cases, it enables than actual ownership of the product.
private owners to share assets with users According to studies by PwC, there is a Furthermore, many of the new digital
in need, thus increasing the asset’s utiliza- growing willingness in the US to engage platforms support cost sharing, connect
tion, American company Airbnb being an in a sharing economy transaction, with 19 people and make consumption easier.
example hereof. The platform facilitates percent of the total US adult population
connections between homeowners and having already done so in 2015. In its recommendations to the Danish
travelers. By offering additional services Government, the Advisory Board for
such as insurance and secure monetary Unlocking the benefits Circular Economy suggests that the
transactions, the service provides addi- of a sharing economy country increases pilot testing of new
tional reliability and trust. In other cases, The benefits of a well-functioning sharing sharing economy business models and
the sharing platform owns the goods economy include decoupling economic that policy-makers focus on regulatory
and offers consumers the opportunity growth from resource depletion. Sharing uncertainties. On a global scale, PwC pro-
to make use of the good as a service, for platforms enable more people to gain jects that the sharing economy could reach
shorter or longer periods. This is the case access to certain goods or services, global revenues around $US 335 billion by
for Danish company Vigga, which is based hence increasing availability without 2025.
Circularity through wardrobes in the cloud Runway has managed to create a closet in the cloud and have suc-
Since launching in 2009, American company Rent the Runway has ceeded in taking advantage of the fast-fashion trend and sharing
taken the sharing economy to next level through its online platform economy without placing an excessive drain on resources. In ad-
for renting and sharing clothes. Through rental and subscription dition to this, Rent the Runway has also created its own reusable
models, American customers can gain affordable access to high- eco-friendly garment bag that both protects the clothes and works
end fashion items for shorter or longer periods. The company has as a delivery bag, thus minimizing the use of plastic packaging. On
raised $US 190 million in venture capital funding, enabling them to average, items are reused 30 times before being sold or donated
upscale logistics and become America’s largest dry-cleaner. With to charity.
a 100,000 item stock and efficient day-to-day delivery, Rent the Rent the RunwayCircular Strategies for Packaging 19
CIRCULAR STRATEGIES
FOR PACKAGING
Innovation and value chain collaborations
are central to rethinking packaging.
When dealing with consumer goods of all types, packaging is likely to be involved. The consumption
of plastic packaging in particular is substantial, reaching approximately 81 million tons in 2014.
Due to the short period they are used for, Despite these barriers, a growing body 97.7 percent of glass packaging is collect-
packaging materials become waste fairly of evidence also suggest that opportuni- ed for recycling. The high glass recycling
quickly. This is a challenge for both con- ties for both small and large businesses rates are a consequence of a long-standing
sumer goods manufacturers, the packag- do exist. US and Danish corporate giants deposit and return system for beverage
ing production industry, customers and such as Coco Cola Company, Carlsberg containers. The system enables customers
the waste management sector. The entire and Amazon have taken significant steps to claim a refund when returning bottles
value chain must rethink design, use, col- towards closing the loop by rethinking the and cans to retail outlets and collection
lection, and recycling practices. In both composition and content of the materials points. Likewise, the New York State
Denmark and New York, increased aware- used for packaging and to reduce waste. Returnable Container Act has been highly
ness around the challenges of packaging Similarly, smaller innovative companies are successful. Since its passage, roadside
are stimulating new initiatives to arise. pioneering the development of new circu- container litter has been reduced by 70
lar inspired packaging solutions. percent, and in 2016 5.1 billion plastic,
Design and production of packaging glass and aluminum beverage containers
Rapid innovation within packaging solu- The after-use challenges were recycled.
tions and materials will be a central feature Creating an effective after-use plastics
of tomorrow’s packaging solutions. A main economy will be important in creating a Nevertheless, challenges remain. To in-
challenge to the implementation of new circular economy. The potential is huge, as crease collection rates for recycling and
packaging solutions, however, is the con- the current global capture is just 5 percent improve sorting technologies, collabora-
siderable apparatus that is already in place of after-use plastic packaging’s material tive innovation is needed. Public policy, the
to produce and use plastic centric pack- value. Within other waste streams, collec- investment landscape, and consumer edu-
aging. Furthermore, the time it takes for tion rates for recycling are significantly cation are all central elements where New
companies to change to a new packaging higher. Around 95 percent of paper and York and Denmark hold complementary
design can by lengthy. cardboard is recycled in Denmark, while competences and experiences.
Investing in Circular Supply Chains advancing circularity. Obstacles include the absence of demand for
Closed Loop Partners is a New York-based social impact invest- materials like glass, the uneven market for post-consumer plastics
ment fund, investing in recycling programs, innovation, and the and persistently low recycling rates in some markets. Closed Loop
development of circular supply chains in North America. Funded by Partners have three different investment vehicles that provide
a conglomerate of US consumer goods companies including Coca project finance, venture capital, and R&D funding respectively.
Cola, Walmart Foundation, P&G, and Unilever, along with family This allows them to engage and fund a wide range of stakeholders
offices and high net worth individuals, Closed Loop Partners’ aim including local communities, municipalities, start-up companies,
is to progress circularity within packaging, waste management industry leaders and the research community.
and supply chains. This targeted strategic focus enables Closed
Loop Partners to break down barriers that stand in the way of Closed Loop Partners
Photo: Christopher GregoryLearn more about Danish circular solutions,
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