Coming full circle: Decarbonisation and the circular economy

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18 September 2023 | 10 min | Featured article

Decarbonisation – the reduction of carbon emissions – and circular economy – the reuse and regeneration of materials by design – are two powerful concepts that, when combined, create a potent force to combat climate change and drive sustainable development.

Traditional linear models of production and consumption have led to excessive greenhouse gas emissions and resource depletion, intensifying environmental challenges. In this context, the concept of circular economy has emerged as a powerful framework for achieving decarbonisation while promoting sustainability and economic prosperity.

This insights paper explores the synergies between decarbonisation and circular economy, and highlights their potential to transform industries, foster innovation, and combat climate change through total systems transformation and tracing, reducing and sequestering emissions along material value chains.

All action requires materials and energy

As industries transition more to circularity, a decarbonisation and systems-thinking mindset must extend to look beyond all components within a limited location, to where synergies can be unlocked.

That's quite a shift from a few years ago, when organisations that were interested in decarbonisation would typically plan their strategies around disparate decarbonisation projects within limited, well-controlled boundaries. The reality now is that strategies are better recognising the direct link between materials and energy – they’re in the same system, rely on each other, and are inextricably linked.

If one thinks of circular economy as a waste management strategy, the link to decarbonisation is fairly weak. In research conducted by Aurecon, waste typically contributes less than 5 per cent of national greenhouse gas emissions in developed economies (Figure 1).

A circular economy intentionally redesigns how materials are produced, transported and used throughout their lifecycle, as represented by the ‘materials management’ portion of Figure 1^[1]. Through this lens, material management then represents between just under half of emissions in the United States, to a good two-thirds in Australia, New Zealand and Canada. This means that to reach net zero, material value chains, particularly those that are hard-to-abate, have to get creative to radically accelerate decarbonisation.

Building on transitioning energy systems, circular economy approaches shift material flows through shifts in design, supply chain collaboration, business models and digitalisation.

Figure 1. Materials management as a portion of greenhouse gas emissions. Research conducted by Aurecon using UNFCCC data.

Designing new vs existing

To date, circular economy has predominantly been associated with waste and recycling. While closing the loop of materials use is an important aspect, it is about much more. One of the most significant benefits in circularity is derived from reducing the volume of front-end materials used in construction.

At the extreme level, this means questioning if a new piece of infrastructure is even actually required, which can be confronting for parts of our society. More commonly, it’s questioning if infrastructure and asset need to be fully designed from scratch anymore.

It is anticipated that many developments in the future will be brownfield (previously developed land that is not currently in use) by de facto, compared to greenfields that lack constraints imposed by prior work.

While brownfield development requires different kinds of thinking to develop, the benefits extend far beyond cost – developing brownfield sites reduces waste and materials consumption, and leverages some of the embodied emissions already used to initially build the site.

So reusing brownfield sites is an obvious start to applying circular economy and design thinking in all aspects of the value chain. Figure 2 presents the hierarchy of approaches in the pursuit for circular systems. Using less is the highest priority, followed by sustaining assets for longer, and only, as last resort, using materials again.

Figure 2. Circular economy is a system that replaces the 'end-of-life' concept with using less in the beginning, using assets for longer, and using materials and products again for as long as possible (at their highest value).

For assets that are already in operation, the challenge of what to do to extend their usefulness or repurpose components is challenging, with rising energy and input costs, environmental and regulatory complexities, and reliability demands. A second, third, fourth (or more) life for materials and products, while still retaining their highest value, becomes a way for asset-intensive organisations to respond to these challenges.

Organisations that recognise the unexploited potential in extending the lifecycles of products and materials will be able to enter new markets, save costs, and increase the trust placed in them by their consumers.

CASE STUDY

Hay Point Shiploader and Berth Replacement Project

Giving a second life to the only offshore exposed concrete gravity caisson berth structure in Australia, Aurecon’s unconventional upgrade of Berth 2 at Hay Point Terminal preserved this Engineers Australia heritage-recognised asset. Circular economy thinking to reuse existing berth caisson columns, rather than demolishing and replacing, challenged Aurecon to think differently.

By using climate smart engineering methods and attaching new modularised steel connections to the tops of existing columns, the berth’s lifespan has doubled, increased by 50 years, and remains one of the most efficient and largest of its type in the world.

By keeping within the existing brownfields site offshore lease boundary footprint, and reusing existing underwater structures, the need to dredge the berth pocket and disrupt the Great Barrier Reef marine environment was avoided. The design has extended the life of the unique berth structures, doubled its design load, and increased its resilience to possible future cyclonic events.

The concept of banks to store materials

Just as financial banks hold notes and coins which are valued by society, infrastructure holds valuable materials that could be more valuable at the end of an asset’s life than when first used.

This concept is being picked up by governments and asset owners as a way to reduce carbon-intensive materials use. For instance, the NSW government’s Waste and Sustainable Materials Strategy 2041^[2] and circular design guidelines for the built environment both emphasise the unlocking potential for digital record-keeping of materials in buildings and infrastructure. Aurecon is helping to inform the implementation of the guidelines by quantifying the greenhouse gas abatement potential of different circular design interventions.

From this perspective, identifying when and how much material will reach its end-of-life at scale provides an opportunity to plan for its management and support the market to develop reuse and recycling solutions. For asset owners, it transforms a potential end-of-life burden into a business opportunity. It may translate to a reduction in capital expenditure if asset management and maintenance strategies align.

Closely examining the opportunities available through a materials bank will identify gaps in recycling capacity for materials and support investment in innovation and infrastructure to meet future demand.

Sounds good, but is it realistic? The quality and safety of reused materials must be understood, and at times, guaranteed – how can we manage this risk? Any reuse or repair also must see materials retained at their highest value for the longest possible time. In response, value chains simultaneously need to consider designing for reversible construction and disassembly, supported by material inventory databases for assets and components, such as 'material passports' (see below). Applied the right way, this ensures a reduction in the volume and impact of materials used during construction of new or refurbished assets. The cascading effect is a reduction in the carbon and energy intensity of the new materials that must be used.

Figure 3 is an example of circular economy principles in action for the development (or refurbishment) of a railway station. Whilst this is one particular type of infrastructure, the same principles can be applied across any type of infrastructure or asset, particularly those that use hard-to-abate construction materials and processes. It improves the efficiency of material reuse, reduces waste, and contributes to resilient construction practices by extending the lifecycle of materials and minimising resource consumption.

Figure 3. Circular economy tactical design elements and principles application in action for a rail station, but able to be applied across any infrastructure (or asset) design and operation.

Digital systems holding asset value

Designing components and materials to be maintained then used again in different forms is fundamental, but unless the right information is available at the right time, the best intentions are lost at implementation. Digitisation is key here. Digital materials passports can attach critical information to components, products and materials so that asset managers, or future asset owners, know how to repair and extend their lifecycles, understand the use history and any resulting risks or questions around material performance and remaining life, or know their worth for reuse or recycling at end of first life.

Circular strategies like disassembly, reuse and recycling are often overlooked as a commercial driver for smarter, faster decarbonisation. Further, while industries agree with reusing and recycling elements in principle, it quickly becomes challenging in practice. Materials passports in material banks are the way to transform the way materials are used, retained and valued.

Traceability helps ensure transparency and reliability in the reuse process, giving stakeholders confidence in the quality and suitability of the materials. Importantly, the monetary and carbon investment in materials that make up assets will be actively managed to hold value well into future lifecycles.

Big systems change with value chain collaboration

The very nature of circular economy and decarbonisation is achieving circularity of materials with a collaborative and interconnected approach along value chains, and over long-time horizons. By working together, value chain partners can collectively design products for circularity, develop efficient material recovery processes, and create closed-loop systems.

For example, a manufacturer can partner with its suppliers to ensure that materials are returned and reused in the production process. This closed-loop approach reduces the need for extracting virgin resources and minimises waste generation. This is particularly important for hard-to-abate industries when incorporating recycled materials can significantly reduce carbon emissions (and energy use) and not draw on substantial virgin material inputs.

Products can be designed with durability, ease of disassembly, and recyclability in mind. Collaboration between value chain partners ensures that components and materials are standardised and compatible, simplifying the recycling and re-manufacturing processes.

Today, there are great opportunities for collaborative innovation to accelerate progress for narrowing, slowing and closing loops. One example is shared reverse logistics networks to reduce costs and facilitate the return of products to the market as ‘good as new’. Leading organisations recognise they don’t need to forgo economic value for environmental value, or vice versa. It’s a better environmental outcome when inputs to the system are minimised, however, it’s also a better economic outcome as quite often less materials are used during construction, and with reversible design, there’s potential financial gains at end-of-life.

Consideration of the end goal is environmental responsibility but also continuous revenue streams for economic prosperity, and resilient assets for organisations and communities.

Used the right way, circularity in the context of decarbonisation can help spur organisations and governments onwards, by bringing into focus what is truly in their commercial interest. If an organisation can see a clear carbon liability on its books in the form of materials and products that could otherwise be reinvested (either internally or along its value chain), it can rebalance using resource and knowledge exchange.

The synergies of circular economy and decarbonisation offer a systems solution to the challenge of resource consumption and climate change.

Embracing the circular path to decarbonisation is not only a necessity, but an unprecedented opportunity to innovate on assets and sustaining capital programmes of work to drive whole-of-systems change.

References

[1] Data source: United Nations Framework Convention on Climate Change, UNFCCC. (2022) 'National greenhouse gas inventory 2020', accessed 29 August 2023. Available at: National Inventory Submissions 2022 | UNFCCC*

[2] Department of Planning, Industry and Environment, NSW Waste and Sustainable Materials Strategy 2041, pages 26-27, accessed 1 August 2023.

*Key assumptions in the research underpinning figure 1:

UNFCCC category 4 Land Use, Land Use Change and Forestry (LULUCF) is excluded from this analysis. This category details estimates for carbon sinks from land use that would complicate the reallocation of emissions sources across other sectors.
It should be noted that national GHG inventories do not include GHG emissions linked to imports and exports. In this analysis, a production rather than a consumption perspective is taken, i.e. allocating emissions to production rather than consumption.
All source emissions data is for the year 2020 obtained from the respective countries national GHG inventory submissions to the UNFCCC.
The distinction between ‘material management’ and ‘non-material management’ emissions sources is a deliberate simplification intended to highlight the important role of managing materials in decarbonising – in practice, as this article describes, emissions relating to energy and materials are inextricably related.

Contributing author & reviewer: Jodie Bricout