LIFE

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LIFE ENVIRONMENT | LIFE and the circular economy Production Developing metrics for the circular economy The LIFE+ CEMs project designed and developed a set of indicators and a web-based tool that will enable Europe’s businesses to assess their effectiveness in making the transition from a ‘linear’ to a ‘circular’ economy. Many businesses are recognising that an economy based on a linear model of resource consumption presents higher risks, is more exposed to volatile resource prices and supply disruptions and generates negative externalities. A circular economy approach that aims to decouple economic growth and development from the consumption of finite resources helps mitigate risks from volatility in the supply and price of materials. For medium-lived complex goods this could equate to savings in material costs of some $630 billion per annum in the EU alone. Major strides have been made in improving resource efficiency and exploring new forms of energy. However, less has been done in terms of systemically designing out material leakage and disposal and in measuring the circularity of products or processes. In 2012, the Ellen MacArthur Foundation applied for LIFE funding to help deliver a project that would address a clear business need. “We knew that companies were setting up circular economy initiatives,” says the Foundation’s Stuart Whitman. ”We knew that they were using metrics and tools in all aspects of their business, from product to design to reporting. We started wondering how companies were measuring circularity effectively. How were they benchmarking their products?” The aim of the LIFE+ CEMs project (LIFE12 ENV/ UK/000966) was to provide businesses with the means to measure their circularity. The company CHEP is increasing the circularity of its main products thanks to the Material Circularity Indicator tool 30
LIFE ENVIRONMENT | LIFE and the circular economy Filling the gap The first task was to develop a set of indicators. “We pretty quickly thought that we should focus on some specific aspects of circularity and materials flows,” says Sven Herrmann, a project manager for the Ellen MacArthur Foundation. production The result was the Material Circularity Indicator (MCI), a tool that measures the extent to which a product or company’s material flows are restorative. The indicators are focused on technical cycles and non-renewable materials. Complementary indicators allow additional impacts and risks - such as toxicity, scarcity and energy - to be taken into account where relevant (e.g. if a company uses a scarce or toxic material in its production processes). Companies from a wide variety of sectors took part in the project: from Nespresso and Rolls- Royce to Desso, a producer of carpets The methodology was developed in collaboration with leading European businesses, who provided product data to test (see box), and other stakeholders including universities and investors who worked with the project team to develop, test and refine the measurement system to ensure its robustness and relevance. “We collaborated with an array of companies to show that the methodology could work with various businesses and products,” says Mr Herrmann. “We also wanted to test it on products that were complex. For instance, for Nespresso and its coffee machine, there were many electronic components that needed to be itemised. Again we wanted the circularity to deal with that level of complexity,” adds Mr Whitman, who managed the project. How is product circularity calculated? MCI is calculated as a score between 0 and 1: the closer to 1, the higher the circularity of the product. In order to determine the score, the following vectors are calculated: material inputs in the production process (e.g. virgin or recycled materials); utility during use phase (lifetime and intensity of use, taking into account durability of products, repair/ maintenance and shared consumption business models); destination after use (landfill, recycling, component reuse); and efficiency of the recycling process. Accurate scoring depends upon knowing all the materials and components used. The benefit for the business of providing this information is that the MCI gives a clear understanding of where the manufacturer can intervene in the product cycle in order to improve circularity. “One of the limitations that we found when trialling the tool with the companies wasn’t so much about data security but data availability,” says Mr Whitman, “There is still an issue of missing data in most companies, or issues of how to retrieve it within the units of a company. They are still reluctant to disclose information.” Businesses can also use optional complementary risk indicators that offer additional insights into potential risks in relation to business priorities (such as material price variation, material supply chain risks, material scarcity and toxicity). Complementary impact indicators show the effect of changing levels of circularity on other areas of interest, such as energy usage and CO 2 emissions. Company CHEP Cisco Desso Dorel HP Kingfisher Nespresso Rolls-Royce Companies that took part in the project Product(s) EU Pallet Cisco UCS B420 Blade Server; N20-C6508 Chassis, 2 PS, fan module Airmaster and Airmaster Ecobase® carpet tiles Baby buggies (two types); pads (two types) Ink cartridge 14.4V drill driver; 18V hammer drill; plastic bucket Pulse coffee machine for Nespresso capsules Compressor blisk (bladed disk); turbine blades 31
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LIFE

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