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MOVING TOWARDS A CIRCULAR ECONOMY: ARE MALAYSIAN BUSINESSES READY?
Kamarulazizi Ibrahim Ph.D
019 411 8008
© KAMARULAZIZI IBRAHIM/2020/0194118008/[email protected]
© KAMARULAZIZI IBRAHIM/2020/0194118008/[email protected]
CIRCULAR ECONOMYin a nut shell
An economic system aimed at
eliminating waste and the continual
use of resources.
The reused economy would appear
to be more sustainable than the
current linear economic system.
Reducing the resources used, and
the waste and leakage created,
conserves resources and helps to
reduce environmental pollution.
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WHY CIRCULAR ECONOMY IMPORTANT
FOR BUSINESSES IN MALAYSIA?
POPULATION INCREASE
PRESSURING RESOURCES
INCREASE COMPETITIVENESS
MAKE SENSES BUSINESSWISE
INTANDEM WITH SUSTAINABLE
DEVELOPMENT GOALS
SHARED PROSPERITY VISION
2030
GOVERNMENT INCENTIVES
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FUNDAMENTAL OF CIRCULAR ECONOMY?
• ‘Take-make-dispose’ economy relied on inputs of cheap and available resources to create conditions for growth and stability.
• Businesses have been hit by an increase in commodity prices that has effectively erased the profit of entire preceding century, our economic model is in need of a new direction.
• The global population growing fast, the middle class is set to top 5 billion by 2030, and many emerging nations will look for increased prosperity.
– This is putting enormous stress on our environment and our resources, which are becoming more difficult to extract.
– Our myopic focus on producing and consuming as cheaply as possible has created a linear economy in which objects are briefly used and then discarded as waste.
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FUNDAMENTAL OF CIRCULAR ECONOMY?
• Nature provide a better alternatives– Just consider the resilience and longevity of
forests: ecosystems in which the seasons are perfectly harmonized with the lifecycle of all species.
– Waste does not exist in nature, because ecosystems reuse everything that grows in a never-ending cycle of efficiency and purpose.
• This concept is called the “circular economy”, an economic system in which no materials are wasted.
– Products are designed and built so that they are part of a value network where reuse and refurbishment on product, component and material level assures continuous re-exploitation of resources.
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AN X-RAY OF THE GLOBAL ECONOMYEvery year we transform more than 100 billion tons of raw material into products. Less than a quarter becomes buildings, cars, or other long-lasting things. Less than 10 percent cycles back into the economy. The circular economy movement aims to increase that number and reduce the enormous amount of waste.
Global resources, 2015
in billions of tons
From the Earth
The vast majority of inputs to the economy, 93 billion tons in 2015, are
resources extracted from the Earth: both finite (minerals, ores, and
fossil fuels) and renewable ones (biomass).
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CLOSING THE CIRCLEUse less, keep things in use longer, recycle endlessly—a circular economy will take a
range of strategies. In the cradle-to-cradle vision, all products are ultimately broken down
either to “technical nutrients,” which are made into new products, or biological ones,
which return to the soil. Waste is a design flaw. As in nature, it doesn’t exist.
Use lessRenewable energy replaces fossil fuels; rental or sharing businesses serve more people with fewer products.
RENEWABLERESOURCES
RENEWABLEENERGY
FINITERESOURCES
Design wiselyMachines and other productsare designed to be long-lasting and easy to repair—or ephemeral and easy to break down into basic components.
Materialsbroken down into basic nutrients
Componentsremade to be as good as new
Productsused by manypeople over timeBiomass pro
cessed toretrieve nutrientsand energy Discarded
biomassused in newproducts
Products keptin service aslong as possible
MINIMALDUMPING AND
POLLUTIONNo wasteAll nutrients flow in cycles. Almost nothing is released as a pollutant or dumped in a landfill.
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Circular economy is an economic system aimed at eliminating waste and the continual use
of resources. The reused economy would appear to be more sustainable than the current
linear economic system. Reducing the resources used, and the waste and leakage
created, conserves resources and helps to reduce environmental pollution.
© Kamarulazizi Ibrahim/2020/019411800899/kamarulazizi
The circular economy includes products, infrastructure, equipment and
services, and applies to every industry sector. It includes ‘technical’
resources (metals, minerals, fossil resources) and ‘biological’
resources (food, fibres, timber, etc.) While the traditional linear
economy, which has a ‘take, make, dispose’ model of production.
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Circular business models can be defined as business models that
are closing, narrowing, slowing, intensifying, and dematerializing
loops, to minimize the resource inputs into and the waste and
emission leakage out of the organizational system.
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BUSINESS MOTIVATION• To explore how businesses can use the circular economy to drive
arbitrage opportunities across complex, global supply chains.
• While examples of circular business models are emerging,
significant materials leakages still persist. To provides practical
guidance on how businesses can address these leakage points to
capture the value of the circular economy together with their
partners—whether suppliers or wholesales/retailers—and
consumers.
• To make practical steps towards capturing this opportunity
through the facilitation of pure materials flows, an important first
move in the shift to a new economic model.
• The circular economy provides a framework to both challenge and
guide us as we rethink and redesign our future.
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POSITION OF MALAYSIA ON CE
https://www.circularity-gap.world/2020
Our world is now only 8.6% circular
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MAKING SENSE OF THE CIRCULAR
ECONOMY: THE 7 KEY ELEMENTS
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Account for the systems perspective during the design process, to use the right
materials, to design for appropriate lifetime and to design for extended future use.
PUT INTO PRACTICE
DISRUPTIVE STARTUP
Fairphone designs modular mobile phones by using fair materials, good working
conditions to enable the reuse and recycling of parts. The Fairphone 2, released in 2016,
has anchored the company's niche position in the market.
CORPORATION
Desso is an international designer and producer of circular carpet tiles and broadloom.
The company designs its own products and has developed innovative new techniques
that allow its products to be collected and recycled or reused.
CIRCULAR JOB
An architect is responsible for designing buildings and by extension for the materials
used during a building’s construction, its energy efficiency during the use phase and the
potential for material recovery when it is demolished. An architect can thus contribute to
the circular economy by ‘designing for the future’.
DESIGN FOR THE FUTURE
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INCORPORATE DIGITAL TECHNOLOGY
Track and optimise resource use and strengthen connections between supply chain
actors through digital, online platforms and technologies that provide insights.
PUT INTO PRACTICE
DISRUPTIVE STARTUP
Floow2 is the first online, asset-sharing marketplace for companies. The platform
reduces costs and increases product utilisation by matching supply and demand.
CORPORATION
DHL is a leading, global logistics service provider. The company is experimenting with
integrating crowd-based logistics, drones and “parcelcopters” into its logistics systems
and delivery chains.
CIRCULAR JOB
The data analyst makes sense of large amounts of information by means varying from
simple data aggregation to complex data mining. The data analyst’s occupation involves
the ‘incorporate digital technology’ strategy and thus allows for smart systems and
technology integration in the circular economy. This job often requires tertiary education
in relatively new fields of data science and computer engineering.
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PRESERVE & EXTEND WHAT’S ALREADY MADE
While resources are in-use, maintain, repair and upgrade them to maximise their lifetime
and give them a second life through take back strategies when applicable.
PUT INTO PRACTICE
DISRUPTIVE STARTUP
ACTronics remanufactures automotive electronic components, based on innovative and
cost-effective processes. The company's rapid growth demonstrates the viability of its
business model.
CORPORATION
Royal Philips is a global healthcare company that aims to make the world healthier and
more sustainable through innovation. The company is starting to focus on
remanufacturing and refurbishing programs for medical imaging equipment.
CIRCULAR JOB
The appliance technician contributes to the circular economy by extending the lifetime of
products. By embodying one of the strategies of the circular economy, ‘to preserve and
extend what’s already made’, all repair and maintenance jobs are considered circular.
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PRIORITISE REGENERATIVE RESOURCES
Ensure renewable, reusable, non-toxic resources are utilised as materials and energy in an
efficient way.
PUT INTO PRACTICE
DISRUPTIVE STARTUP
SkyNRG is the global leader in sustainable aviation fuels and has pioneered new supply
chains and production processes. It has supplied fuel to over 25 airlines, on all
continents.
CORPORATION
Vitens is the largest drinking water company in the Netherlands and is pioneering
innovative approaches to ensure a sustainable and continued supply of drinking water to
the country.
CIRCULAR JOB
The solar panel installer works within the energy sector to promote the use of solar as a
renewable energy source. The job contributes to the circular economy by ‘prioritising
regenerative resources’, the first strategy of the circular economy.
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USE WASTE AS A RESOURCE
Utilise waste streams as a source of secondary resources and recover waste for reuse and
recycling.
PUT INTO PRACTICE
DISRUPTIVE STARTUP
Ioniqa has developed a game-changing technology to produce high-grade raw materials
from PET waste. It was awarded the 2016 Accenture Innovation Award in the circular
economy category.
CORPORATION
Renewi, formed from the merger of Shanks and Van Gansewinkel, is a leading waste-to-
product business that operates across nine countries. The company focuses on
transforming waste materials into a wide range of useful products.
CIRCULAR JOB
The recycling operative’s job consists of sorting through recyclable waste and separating
materials to be recovered. This sorting and separating constitutes an essential element in
the recycling process, which involves the ‘use waste as a resource’ strategy, and thus
presents itself a circular job. Day to day activities of the recycling operative include
physical labour and machine handling such as forklift driving.
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RETHINK THE BUSINESS MODEL
Consider opportunities to create greater value and align incentives through business
models that build on the interaction between products and services.
PUT INTO PRACTICE
DISRUPTIVE STARTUP
Bundles has a trailblazing product-as-a-service model by leasing Miele appliances. This
promotes unique customer engagement and provides and incentivises product life-
extension.
CORPORATION
Auping is a global mattress and bed manufacturer that is aiming to produce fully circular
products. The company has plans to move towards pay per use leasing models for its
beds to retain ownership of its products and raw materials.
CIRCULAR JOB
The leasing process manager is responsible for the coordination of the external service
partners distributed across market segments. By contributing to the workings of a
product as a service model, the leasing process manager contributes to the circular
economy through the ‘rethinking the business model’ strategy.
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COLLABORATE TO CREATE JOINT VALUE
Work together throughout the supply chain, internally within organisations and with the
public sector to increase transparency and create joint value.
PUT INTO PRACTICE
DISRUPTIVE STARTUP
Dutch aWEARness focuses on circular business-to-business workwear. It aims to
increase transparency and information sharing in order to strengthen cooperation
throughout the entire textile supply chain.
CORPORATION
DSM is a multi-national, chemical company that is active in health, nutrition, and
materials. The company engages in frequent collaboration internally to develop
innovative solutions, and also engages in a variety of partnerships with academia and the
public sector.
CIRCULAR JOB
The director of a trade association manages a membership organisation composed of
multiple companies within a specific industry. The director can support the circular
economy by encouraging greater collaboration, knowledge sharing, and networking
between companies. As such, the director can employ the ‘collaborate to create joint
value’ strategy in order to contribute to the circular economy.
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SDG AND BUSINESS
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SDG AND CIRCULAR ECONOMY
• The Sustainable Development Goals (SDGs)
– have been described as “the blueprint to achieve a better and more sustainable future for all” by 2030. The seventeen goals and associated 169 targets are increasingly being adopted by both public and private sector actors across the globe, as a framework for organising and pursuing sustainability initiatives.
• Circular Economy (CE) is an alternative economic
framework approach for achieving local, national, and
global sustainability.
– Governments, cities and not least many large
multinational companies actively exploring ways to shift
to circular economy practices.
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CIRCULAR ECONOMY AND SDG
• The concept of a circular economy,
– an economy in which waste and pollution do not exist by
design, products and materials are kept in use, and
natural systems are regenerated provides much promise
to accelerate implementation of the 2030 Agenda.
• The circular economy holds particular promise for
achieving multiple SDGs, including SDGs
– 6 on energy,
– 8 on economic growth,
– 11 on sustainable cities,
– 12 on sustainable consumption and production,
– 13 on climate change,
– 14 on oceans, and
– 15 on life on land.
• Social and economic prosperity within the natural capacity
of our planet
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CIRCULAR ECONOMY AND THE 17 SDG: INDICATIVE PRIORITIES
SDGs with
weak or no link
to CE practices
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A PARADOX
FOR LAND
OF PLENTY
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Malaysia’s Composition of Exports 2016
MIT Media Lab
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Malaysia’s Export markets 2016MIT Media Lab
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Circular Economy: The Way Forward for Palm-Based Industries MIDA Insights - Industry Malaysia is the second largest producers and exporters of palm oil in the
world, supported by 4.49 million hectares of oil palm cultivation which produces 17.73 million
tonnes of palm oil.
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MOVING TOWARDS A CIRCULAR ECONOMY:
ARE MALAYSIAN BUSINESSES READY?
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PALM OIL AND PALM
BASED PROUCTS
REFINED PETROLEUM PRODUCTS
E & E PRODUCTS
CIRCULAR ECONOMY IN TOP THREE
EXPORT BUSINESS IN MALAYSIA
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PRESENT POSITION OF
MALAYSIAN BUSINESSES
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TECHNOLOGICAL READINESS
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3Rs and CE POLICY DEVELOPMENT
SCP sustainable consumption and production
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While governments can provide
incentives and support ‘replacement’ as
4th R (reduce, reuse, recycle, replace),
It is up to the private sector to introduce
innovative solutions, or otherwise facing
the consequence of being left behind.
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