How has the use of materials evolved over the years?
How is circular economy positioned in this context?
And what leverages are currently available for the execution of a circular economy?
During the last fifty years, the global extraction of materials has quadrupled. In 2019, for example, global resources consumption had increased to over 100 billion tons. It is expected to double by 2050 if the current business model is maintained. Specifically, during the period between the 2015 COP21 in Paris and the COP26 in Glasgow, the "Circularity Gap Report 2022" reports that global materials consumption was the equivalent of 500 billion tons in raw materials. The use of materials is accelerating, and as a result, greenhouse gas emissions are increasing.
According to recent international studies, such as the Global Resources Outlook (UNEP), a significant portion of emissions is generated throughout the value chain of materials. It is clear that the use of materials and climate change are closely related since greenhouse gas emissions are produced at all phases of the raw materials value chain: from extraction, processing, production, and the use of products. Material extraction, processing, and use are precisely the processes most responsible for greenhouse gas emissions. Therefore, it is increasingly important to investigate the course of these emissions throughout the value chain to implement opportunities for reducing their impact.
Recent studies that address this topic, such as Circularity Gap Report and Resource efficiency and climate change - material efficiency strategies for a low-carbon future (UNEP), support the critical role of circular strategies as a way to reduce greenhouse gas emissions. Still, a change in behaviors is necessary to achieve these objectives.
The first Circle Economy document published in 2018 showed a circularity in the global economy that only represented 9.1%, dropping in just two years to 8.6%. This means that over 90% of the resources extracted and consumed (minerals, fossil fuels, metals, and biomass) become waste and do not reenter the production cycle. Currently, linear economic models are being implemented, where materials are extracted, transformed into products, and eliminated as waste.
It is essential not only to act in terms of renewable energies and efficiency to achieve our decarbonization goals but also to intervene in the global economic model to reduce the consumption of resources and, as a result, greenhouse gas emissions. The circular economy can favor the conservation of value and reducing environmental impact, reducing emissions, transforming the way products are created and used, and creating new economic opportunities. By applying circular strategies and more efficient use of materials, our linear system could become circular flows through a combination of strategies aimed at reducing the demand for raw materials produced. The latter can be achieved by extending product life cycles, intelligent product design, and standardization, substituting materials with a high intensity of greenhouse gas emissions with materials that yield lower emissions and introducing the reuse, recycling, and re-manufacturing of components.
The Circularity Gap Report highlights three sectors that alone represent 70% of global emissions: transport, construction, and the food industry. Transport is the industry with the most significant impact, given the use of fossil fuels for passenger and cargo transportation. This is followed by construction, where the emissions generated depend on the quantity and type of materials used, structure and demolition methods, and recycling and reuse.
The analysis identifies 21 solutions divided among different areas of the economic sector that represent society's basic needs: construction, food, transport, healthcare, consumer products, and communications. All interventions share four fundamental principles: reduced use of natural resources, greater use of products, reuse, and recovery of materials. When implementing these circular interventions together, it is possible to nearly double current global circularity indexes, reducing the use of virgin resources and related emissions.
According to the IAI positioning document, Aluminum Sector Greenhouse Gas Pathways to 2050, aluminum, widely used in several of the company's key sectors, is a determining factor for sustainable economic development since aluminum products are light, resistant, long-lasting, and recyclable. Aluminum can be recycled over and over again without losing its quality. It is the most recycled material in the world. Every year over 30 million tons of aluminum scrap are recycled around the globe.
Specifically, the interventions for the three sectors with the greatest opportunity for reducing impact are the following:
• Transport: new business models shifting to shared transport models, rethinking the entire model with new circular design approaches to increase the useful life of vehicles, greater recycling of out-of-use parts, and reduced materials for vehicle manufacturing;
• Construction: use of circular construction materials, reuse and recovery of demolition materials, reduced consumption of raw materials used, move to renewable energies to reduce heating and cooling emissions, better use of space to reduce land consumption.
• Food: reform agriculture by developing regenerative agriculture to reduce the environmental impact of crops and livestock while rethinking consumption and eliminating excess.
The car industry, for example, uses a lot of steel. According to The Circular Economy, a Powerful Force for Climate Mitigation (Material Economics), cars represent over 40% of the aluminum demand, making them an important source for aluminum recycling at the end of their useful life. Unfortunately, to date, the process implemented leads to a significant loss in quality and value of the extracted material such that it cannot be recycled. According to estimates, only 8% of recycled steel from used cars meets quality standards for reuse in the new life cycle.
The transformation in certain economic sectors must occur at a global level. To support the Circle Economy, a digital tool known as “Ganbatte" has been developed and will be introduced during the coming months to accelerate the transition towards a circular economy. The tool will allow for a circular method of measurement using adequate metrics and identifying the most problematic areas to suggest concrete solutions that can be reproduced elsewhere.
Circle Economy notes the commitment of nations and their governments to close the circularity gap, defining ambitious policies and objectives that lead to the maximum reuse of raw materials. The transition must be seen as an overarching theme, considering the similarities and differences between various countries. Integrating climate change and circular economy strategies will be necessary to achieve the maximum impact.