Maria Rampa: Hello, I’m Maria Rampa and welcome to ‘Engineering Reimagined’ – a podcast series in which we talk to leaders from all walks of life to help us understand how we can co-create a better future for our planet, communities and individuals.
‘Circular economy’ has become a buzz phrase in recent years as communities and countries set net zero carbon goals and adopt a less linear approach to how we use our natural and built resources. But what does it actually mean? And how can we realistically achieve it?
In this episode, Aurecon’s Technical Director, Water, John Poon, discusses this topic with Sarah Thomson, General Manager, Strategy, Governance and Finance at Goulburn Valley Water. Goulburn Valley is a region in Victoria, in Australia’s south, with a strong agricultural economy. In fact, 90 per cent of the land is used for primary production, and 2.5 billion dollars is generated from food processing. These industries are integral, not only to the communities that support them, but to the whole of Australia and its export markets.
For this reason, the need to ensure this region can prosper into the future is essential. Sarah tells the story about how a realisation that ‘water’ is at the centre of everything led Goulburn Valley Water to engage with regional partners across agriculture, manufacturing and energy, to collaborate on a ‘circular economy’ roadmap for a net zero carbon future and a prosperous and resilient community.
Let’s hear how this collaborative approach is making the ‘step-change’ required to achieve a circular future and how we can learn from this region to build circular economies elsewhere.
John: You've got an amazing background, you've worked for World Vision, WaterAid before joining Goulburn Valley Water. So what are some of the things that have inspired you professionally, personally, about water and the role it plays in our daily lives?
Sarah: I probably started a very long time ago. Rosie Wheen, who happens to be the CEO of WaterAid, she was an old school friend, actually. And I went overseas to Timor in my early 20s to go and see her where she was volunteering. We take for granted our access to water and sanitation in developed countries, but it becomes so apparent when you're in a developing country what water means and what sanitation means. It sent me on a trajectory of actually working for NGOs, that little visit that I did with Rosie, and I think it's taught me a lot. I know this podcast is about engineering, reimagined and engineers might want to think about is actually making sure that you're broad in your thinking about how engineering fits in society. I remember starkly, sitting on the balcony in Timor and looking at some water tanks that were put in by a Norwegian NGO. And they were just left there unused. And essentially, that was because they hadn't thought about the broader society and how to actually get people in that village understanding what that water tank meant. So the minute they left, it was just left unused. It was a great water tank, but it didn't work. That to me is engineering reimagined, is really seeing that technology on the context of society.
John: That story also speaks to me as well. I've done that work in India as well and I've seen this thing happen and we do take a lot for granted.
Sarah: We certainly do. So that's where my passions come from for water and wastewater.
John: Now, just getting on to your other big passion area, which is circular economy. So we know there's a big growing focus on embedding Circular Economy principles, into all sectors of business and life. So when we talk about circular economy, just for our listeners here, what are we talking about here? What does it really mean?
Sarah: For me, it's about thinking about the economy in a different way. Previously, it was what we call a linear economy where we dig up a resource, we make something out of it, and then we pretty much chuck it out. The circular economy is about, actually trying to reduce the damage to the environment by reducing the amount of stuff that we take out in the first instance but also making sure that the resources that we've already taken out or we've made that we reuse as much as we can, so it becomes a circular use of resources rather than just chucking things out, which ends up causing a lot of carbon emissions. 45% of carbon emissions comes from waste. So if we can eliminate that, it does create a lot of reduction in carbon emissions, which would be great.
John: We need to adapt, change, to meet this new approach, it's all part of becoming that net zero emissions future, right?
Sarah: It's really interesting in the context of developing countries who previously were accepting a whole lot of our waste have said no, get lost, we don't want it. So, I think that's fantastic. They shouldn't be taking our waste and us wrecking their environments. Actually, we need to be looking after ourselves and not using the planet as a rubbish tin.
John: It does sound awfully flagrant. What are some of the social and economic benefits that you can see from a circular economy?
Sarah: We’ve got some fairly old fashioned thinking about the economy, because the economy shouldn't be the endpoint, the social and the economy should be the same thing. So there's a really terrific economist out of England called Mariana Mazzucato and she is talking about changing economics theory to really think about value, what does value mean? And value should be grounded in social. So the circular economy, is the answer to bringing those two things together really well. It's a new way of thinking about economics. It's really powerful.
John: I know that your own journey is about regional prosperity, and resilience, and I think that talks volumes about it.
Sarah: We've been in an entirely different, really disrupted world with COVID and now we've got what's happening in the war in Ukraine. And that is changing the economic dynamics really quickly. Petrol is a lot more expensive, gas is a lot more expensive and urea, one of the fertiliser inputs is incredibly expensive. That one has tripled in the last year. Over 90% of that is coming from China. What does that mean for our supply chains? That's the kind of thing that we can think about in circular economy, in terms of producing that kind of product here using waste. So we can use our waste to produce hydrogen, hydrogen can produce ammonia, and ammonia can become urea and we could produce that here.
John: Now it was an exciting launch of the future ready renewable hydrogen ecosystem project, which is being led by Goulburn Valley Water. Where else do you see the water sector playing in the circular economy?
Sarah: The water sector it's fascinating. We started this work probably about two years ago. I think I read Ross Garnaut, his book on what the opportunities were, it was about Australia becoming a superpower in a net zero circular economy. We decided to invite him to come and talk to our community two years ago. And that just started the thinking about, from the water corporations view, what is our role in community, and what is our role as a Water Corporation, and that piece of work just has grown over a period of time. And what we've kind of realised is actually the Water Corporation is potentially at the centre of this. We've pulled together a white paper called embedding regional resilience using the circular economy, and what the content is actually getting to is water corporations are potentially at the centre of some of this circular economy piece, particularly in that water, energy and waste nexus, and probably we'd add in agriculture, food in there as well but because we produce water, and I think one of the key pieces of where we're going is hydrogen is potentially part of the solution, that will be the fuel of the future. To produce hydrogen, you have to have water. The Water Corporation is the one that has the water that is clean enough to produce the hydrogen. So we have to be at the centre of that but in addition to that, we've got connections with residential, and major industrials so we can think about what could we do with hydrogen, as well as biogas, we produce a lot of biogas from our industrial wastes. So we could actually use that to put that into the grid. We can access a lot of research through organisations such as Water Research Australia and we've got funding so it's actually strangely, a really great match. We have the potential to be a trusted broker for the shift to a net zero circular economy.
John: I think water does indeed have a big role to play and I'm trying to try to search my mind to think of what you could do with without the presence of water and there are very few things you could do in everyday life, without water. What are some of the biggest barriers or key challenges about how would we go and implement circular economy?
Sarah: I always start with the people and they’re both, a challenge, and they are the source of how things will actually happen. So, I focus a lot on people and relationships and collaboration. With the project that we've been doing, it has taken a while for people to get their heads around what it could mean. I think we're getting there now, at the start, it was like, Oh, what is this circular economy? Can someone explain this to me simply? I had so many of these questions. And so, it's been taking some key influencers and people on a journey of this is circular economy, this is the opportunity, this is what we could and should do. Where we're now at the point we've got key people across the line, they're kind of like, yeah we can see this possibility now, to the extent where we've got the Committee for Greater Shepparton in our launch with the hydrogen readiness project. As well as a lot of the major industrials, also seeing the possibility of collaborating and working together to make the most of the circular economy and actually seeing the benefit of collaboration. I think one of the major barriers, is again older fashioned notions about economics, it really is a barrier around competition. I'm not saying there's not a place for competition, but for circular economy to genuinely work, you actually have to have really strong collaboration and you have to have trusting partnerships that within that trusting partnership you can innovate because once you start competing, it becomes much harder to share information and feel comfortable in that innovation space. Some of our procurement requirements in government, they've absolutely got their reason to be there, I get that. But it is a potential barrier to getting the kind of collaboration and partnerships going that you need to have going to innovate. Because circular economy requires huge amounts of collaboration for it to work to even share information about what waste you've got, and who else could use that waste. I think technology is incredibly important. We've got to make sure that the costs of the technology are reducing, so for example, electrolysers for hydrogen, the cost of those will need to decrease a lot for it to be cost competitive. I think we also need to have incentives in market for businesses to use recycled products and use low carbon emitting energy and products. It needs to be regulated to set up the right incentives for businesses to act in the way that's going to preserve our environment and our planet.
John: Finland was one of the first countries in the world to develop a circular economy roadmap. Singapore have got a circular economy roadmap, the Singapore Green Plan 2030. You've been working collaboratively with an enormous array of customers and stakeholders to make circular economy happen. Maybe you could talk about some of those relationships.
Sarah: We have a manufacturing, agriculture and transport hub. But what we've been doing is reaching out, we started with our major industrials so some big iconic brands like SPC, Bega Cheese. And we reached out to them and tried to understand from them what their aspirations were in circular economy and energy. They were all thinking about it separately but what became really apparent was that they could see the benefits of collaboration if Goulburn Valley Water was able to bring together a collaboration, that they would be very interested in working together to get a good outcome. In economic terms, this kind of circular economy is a public good. It's something that each individual company is less likely to do by themselves but if government invest a little bit, I think that we can actually grow the whole pot, so it's one of those things where it is justified in economic terms for government to invest a little bit to create a significant benefit for our whole community.
John: We talked about industrials, and the manufacturing sector and obviously, lots of energy use, fuel use in those areas, very heavy users of that. Another heavy user is transportation, which is a particularly difficult area of carbon emissions to abate. So what do you see happening in this area here around zero emissions? Transportation, and I think hydrogen, probably has a role to play.
Sarah: The heavy transport is looking like it's definitely going to be in the hydrogen space. So we've got organisations like Hyzon, who are actually doing some interesting stuff they're doing both electric and hydrogen. I think that's probably where the future is for our heavy vehicle fleet. The Victorian Government is setting up hydrogen hubs and they're also setting up this Hume Highway Hydrogen.
John: Hume Hydrogen Highway, it’s a bit of a mouthful.
Sarah: So I think hydrogen will play a future in the transport and logistics for our area.
John: Some of this technology is already available, coming out now.
Sarah: That’s the interesting thing for our region is that we're seeing this is a big opportunity, like, can we get the businesses here that support hydrogen? Could we get an electrolyser business here?
John: Let's move on to some of the pathways that we see developing for Goulburn Valley in creating a circular economy. In a nutshell, what does it mean for the community, businesses and the environment?
Sarah: For our region, we're absolutely seeing this transition to a net zero circular economy as an opportunity. It allows our businesses to really take that clean green credentials to the next level and that makes them more competitive. So from the business perspective it's going to become more and more important over coming years. Carbon offsets, which are quite interesting. If we're clever about how we do our carbon offsets, working with organisations like the Catchment Management Authority, we can set them up in corridors, and make sure that we are getting biodiversity values from those carbon offsets in the best possible way. There are lots of benefits that we can get from thinking in a circular way.
John: We probably should acknowledge the recently released IPCC report into climate change mitigation and what we're talking about here today is very much about acting on some of those recommendations. So in terms of designing circularity into our future work, our infrastructure, our economic systems, our business systems, how critical do you think this will be?
Sarah: I think it will become just the normal way of thinking and doing things over the next 5, 10, 15 years. It will become the normal way of thinking about things from the outset. How are we making sure that we're integrating circular economy thinking into our process designs, into all of our engineering and all of our social. I remember when the concepts, I was first introduced to them and it was such a penny dropped for me, it was kind of like, this is really significant. There's been this whole narrative about, we can't keep the GDP growing because we're just going to wreck the planet but what the circular economy does is answer that. It says, actually, you can keep, we can keep being prosperous, and actually keep growing our economies, but has to be done in a certain way for it to not wreck our environment. And if you do it that way, we can maintain a good lifestyle at the same time as treating our planet a bit better than we have.
John: I think, Sarah, you touched on that topic earlier, the old way of economics, and I think there's probably a little bit of that in the old way of engineering and maybe there might be some advice, guidance you might want to give to engineers, future engineers as well. How do we drive this shift? How do we become part of the solution going forward?
Sarah: You can get very channel visioned about these things if you're an engineer and me being a finance or economics person, you can get channelled in your thinking. But what I'd really encourage the engineers of the world to do is be really good at the engineering, there's no doubt that that is critical but what you need to do at the same time is think a little bit broader than that about what is the society around the engineering that you're doing? And how do you bring people and that society along on a journey? Because often engineers are way out in front, they're technically fantastic and I think if you combine that technical brilliance with being able to bring people along on a journey and to really think about who you're going get involved in this project to make it work. I think that's really critical. The other piece is probably being very aware of the politics as well. I don't think you can be naive about the politics of what you're working with and you've got to be aware of both small p politics, but also big p politics as well. So what's happening, federally, state and local, and be aware of how you can use that dynamic to shift things. Sometimes you've got to step into that space to make things work.
John: Thanks very much, Sarah, for being so generous to provide your thoughts, stories about circular economy.
Sarah: No worries, can I end on a quote that I picked out from the Australian Financial Review and it's from the chair of Bega Cheese, Barry Irvin. I love this quote, it's thinking about the future and kind of how customers are thinking, and I think it's very relevant for circular economy as well. So he says, “The 2030 customer will want to know how you treat your farmers. They'll want to know how your farmers treat their animals, and how they treat their land. They will want to feel comfortable with all that, but also about how you manufacture this product. And then what is your footprint as you run your factory, how you treat your people and how you treat the communities that you operate in. And by the way, how did you deliver this to me?” I just see it as the nicest way of capturing circular economy in a very accessible way.
John: That sums it up. So thanks very much, Sarah.
Maria Rampa: ‘Circular economy’ continues to be a topic that we will need to explore across our communities if we want to achieve our net zero carbon goals. We hope you enjoyed this discussion about how one community has used collaboration to help design a circular future. We will explore this topic more in future episodes, so please stay tuned by following Aurecon on socials and subscribing to ‘Engineering Reimagined’ wherever you listen to podcasts. Until next time, thanks for listening!