Industrial Ecology- The missing link for sustainable resource recovery

Grant Musgrove, CEO

About ACOR

• Australia’s peak representative of the resource recovery and recycling industry

• Advocate on behalf of the industry to influence government policy and decision making

• Work closely with the Federal and the State Government to promote a sustainable and productive economy

The “old” waste hierarchy

• This is linear, not circular, but a useful intermediate /transitional framework

grantm@acor.org.au

Linear Vs Circular C&P

Linear C&P

• Unsustainable consumption and production

• Materials lost in the value chain• High operation and production

cost• Increase pressure in landfill• Loss of residue energy

Circular C&P

• Sustainable consumption and production

• Materials are reused/ recycled• Mitigate the impacts of

resource volatility • Reduce waste generation• Save up to 80% of upstream

energy

What are the challenges of businesses and industries

facing today?

“Peak Resources” is Past Us! Need Industrial Ecology for Radical Resource Efficiency

Future Pathway of Waste? Sustainability of Current System?

grantm@acor.org.au

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Waste Exports

PaperMetalPlastics

In $

mill

ion

Source: RBA 2013

Volatility has been increasing since peak resources: bad for supply chain certainty/ resource recovery

Increasing Waste Generation

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

0

50

100

150

200

250

300

Waste generated

Population

GVA

Source: ABS Waste Account 2013

Secondary Resource Prices Are Not Telling the Truth: They are too Expensive!!

• P- price• Q – quantity• D- demand• MPC – marginal

production cost• BUA/regulatory

cost– marginal cost from regulating a resource as a waste

P

QD

MPC

MPC +BUA cost

Dimensions of Resource Scarcity

Physical

Not accessible

Decline of ore grade

Depletion of reserve

Economic

Price volatility

Market development

Skill shortage

Geopolitical

Resource nationalism

Political stability

Regional conflicts

Technological

Supply bottlenecks

Lack of innovations

Environmental

Social license to operate

Climate change

Environmental standards

China’s Green Fence Policy

• Come into effect in February 2013• Higher standards on imports of recycled material to

promote circular economy • Reject shipments considered to have a contamination

rate of 1.5% or higher – Loads of shipping containers that carried recyclable

materials have been rejected• Provide discounted prices for local manufacturing

companies to purchase new equipment for manufacturing recycled products

CHINA is moving fast to a circular economy

Other issues

• Information gap between waste generators and recyclers in relation to material inputs and outputs

• Increasing operation cost of recyclers subject to carbon tax liability

• Increasing production cost of manufacturers due to high resource prices

• Loss of valuable commodities and materials suitable for recycling due to export and loss to landfill

• Environmental and social issues

Opportunities and Barriers to Industrial Ecology

Opportunities

• The total value of resource recovery in Australia is over $9.5 billion

• NSW EPA supports the development of IEP– Waste Less, Recycle More strategy: $465.7 million

package over 5 years – $4 million investment in the IE program over 4 years – Sustainability Advantage Program

• NSW 2014 recycling targets

Increasing NSW Recycling Rates

2002-03 2004-05 2006-07 2008-09 2010-110

10

20

30

40

50

60

70

80

MSWC&IC&DOverall

Source: Waste Less, Recycle More 2013

%

Barriers to IE

• Legislation and regulation– High- level resource recovery policies & strategies

are inadequately integrated across govt portfolios, e.g. industry policy, environmental planning, regulation and enforcement

– Current legislation/ regulation is too strict on wastes, esp. prescribed wastes inhibit firms’ search for industrial waste reutilization

– Different jurisdictions have different interpretations on the definition of waste

Barriers to IE (Cont.)

• Costs of licensing and approvals– Time consuming (up to 5 years),

complicated assessment process• Not enough markets to absorb recyclables

and quality issues (contamination)• Lack of communication between product

manufacturers and recyclers

Barriers to IE (Cont.)

• Site location and planning– Difficulties in obtaining development

approval when aspects such as location, community agreement and capital cost are in place

– Lack of certainty about planning policy– The site location is often ‘out in the bush’ or

lacks of social license to operate= complaints= NIMBY

What is Required for Success?

Recommendations

• resource recovery and recycling policy integration and alignment

• The definition of waste needs to narrow so that the inherent value of recyclable materials can be reflected

• Clear and consistent definitions of waste and resource recovery

Recommendations (Cont.)

• No legislative constraint on businesses to favour recycling/IE as long as the materials do not threaten human and environmental health

• Master plan for approvals to ease the costs and streamline the approval process

• A broad network of the IEP to facilitate and support interactions between industries

• “Rethink design” = Made to be made again

Reduce unnecessary complexity in streams

A Precinct and Partner Identification Program (PPIP)

• Deliver both bi- lateral symbiotic relationships for existing businesses

• Work with companies and governments on precinct identification and development

• Create new investments opportunities in industrial processes, mining and agriculture

PPIP Key Process Steps

• Maximum source separation of waste– Green waste, recyclables, hard/ difficult/ problem

wastes and residual waste• Creation of infrastructure and technology

advancement– Reduce material separation and pre- sorting costs

• The development should be gradual and led by industry

Elements of PPIP• Accessible and user friendly for the community• Accept and process a wide range of wastes• Diverse business activities• Industry- led• Driven by economic motivations• Maximise the output of energy from waste • Operate 7 days

Key Facilities

• A composting or Biochar operation- Green waste

• A MRF- Recyclables• An energy from waste plant- Residual

materials• An e- waste plant• A drop off centre

Organic wasteGlass, paper, cardboard,

beverage cans, etc

E- wasteBatteries, paint, oil

and chemicals Residual Waste (wood, textiles, masonry)

Recycling Process

Manufacturing industry

Composting Facility

MRF

Residual Derived Fuel

Domestic Consumption

Export Market

Renewable Energy

Renewable Energy

Renewable Energy

Outcomes• Reduction of illegal dumpling• Sustainable employment creation and investment

opportunities• Less resilience on landfill• Business cost reduction and improved community

relations • Support local re- manufacturing, reprocessing and

national and international trade• Develop export markets for recovered resources • Create revenue streams from commodities

Transitioning Towards Industrial Ecology and a Genuinely Sustainable Materials Economy Means…• To provide ‘correct’ incentives for behavioural change, the regulation

of wastes (BUA’s, storage regulations) being applied to “wastes” needs to cease when the waste becomes a resource as long as the “negative externalities” (harm to environmental, and human health) cease to exist

• This should be risk based regulation reflecting the magnitude and probability of occurrence of negative environmental ‘externalities’

• Industrial ecology is potentially a great business model too because of ↑ resource prices/input costs!

• Govt policy is contradictory, both promoting and constraining simultaneously

• We may need to start with a blank piece of paper, and share the pen around!