Closing the Loop: How to Gain a Competitive Edge with The Circular Economy
The “take-make-use-dispose” approach to construction materials is leaving a mountain of a legacy around the world. And that mountain continues to grow. The U.S. Environmental Protection Agency estimates that the amount of construction and demolition waste (CDW) produced annually in the United States increased from 170 million tons in 2005 to more than 569 million tons in 2017, the most recent year for which figures were reported.
In the European Union, meanwhile, CDW is among the most voluminous waste streams, accounting for up to 30 percent of all waste generated in the region. Globally, the World Bank projects that annual waste generation (of which CDW accounts for a significant chunk) will rise to 3.4 billion tons over the next 30 years, up from about 2 billion tons in 2016.
For the impact it has on the environment, and for the disposal cost it levies upon communities and the construction industry, the traditional linear model for handling CDW is fast becoming an unsustainable course and a dead-end business strategy. This is especially true in countries and regions where landfill space is scarce, access to resources is limited and/or sustainability policies are particularly strong.
These costs are prompting the construction industry, from building material manufacturers to their contractor customers, to explore a different path, one based on the principles of reuse, remanufacture and recycling of materials, products and components — the Circular Economy.
Circular by Design
Flooring manufacturer Tarkett’s line of loose-lay-and-click vinyl tile systems and taped-and-adhesives carpet systems is made from recycled materials and engineered specifically for ease of installation removal, take-back, separation and recycling. To support the circular, cradle-to-cradle design of these products, Tarkett offers the ReStart take-back program in Europe and North America, where it collects off-cuts and used vinyl, linoleum and carpet flooring at the project site and loops the materials back into the production process.
Essentially, the program gives Tarkett customers an opportunity to participate directly in the Circular Economy.
Making a program like this work depends largely on designing products without toxic substances to contaminate their circularity. To do so, a manufacturer needs the digital capabilities to rapidly evaluate and scale up products. Predictive tools driven by machine learning and AI could enable a manufacturer to quickly and accurately predict how formulations for particular products would perform in terms of quality and in terms of carbon footprint and environmental impact, then adjust product makeup as needed.
Cross-Industry Partnerships to Close the Loop
One industry’s waste is another’s resource. Companies such as Tarkett are using that Circular Economy premise to drive new cross-industry business partnerships. The company is exploring ways to incorporate medical blister packaging and mobile cards into its vinyl composite tile product formulation and as the core layer for its luxury vinyl tile.
Under a partnership with Aquafil announced in November 2019, Tarkett will separate the two principal components of carpet tiles, yarn and backing, to create two streams of materials, some to be used to produce Tarkett’s engineered-for-recyclability EcoBase carpet tile backing and the other to be transformed into Aquafil’s ECONYL nylon yarn. There’s no compromise of quality from the process, which is housed at Tarkett’s carpet tile facility in Waalwijk, the Netherlands. What’s more, the EcoBase-backed carpet tiles with ECONYL yarn deliver up to 84 percent CO2 savings compared to incineration.
Tarkett has sourced nylon yarn from Aquafil for more than a decade. The new partnership brings the relationship full circle, with Aquafil now sourcing post-use yarn from Tarkett. In this case, a digital platform enables Tarkett and Aquafil to share data in real time to collaboratively and intelligently adjust and optimize the production process at the Waalwijk facility to ensure quality, to troubleshoot any issues that may arise and to track and trace both virgin and secondary material streams from source to re-use.
This track-and-traceability is crucial to the success of partnerships like this, where participants have a single version of the truth about each step of a material’s journey. A technology such as blockchain could provide the level of trusted documentation needed to confirm claims about product make-up, carbon footprint, etc.
Building Products as a Service
How about a Circular Economy business model in which a building products manufacturer delivers a sustainable outcome to the end user, not just a sustainable product? Philips is doing exactly that with the lighting solution it provided to RAUArchitects in Amsterdam. Rather than purchase an expensive lighting infrastructure that eventually would require replacement and disposal, the firm worked with Philips to develop an intelligent lighting system for RAUArchitect’s offices that is tied to a combined sensor and controller system. The system minimizes energy usage by dimming or brightening artificial lighting in response to motion or the presence of daylight.
There’s great potential to adapt this concept to other building materials. A supplier could provide the façade/envelope for a building via a lease or as a service, an arrangement in which the building owner pays the manufacturer an inclusive fee for maintenance, repair and replacement of the façade, with the manufacturer maintaining ownership of the materials. When data from sensors embedded in the façade tell the manufacturer the materials in the façade are ready to be replaced, it can haul away and recycle the older materials and replace them with new materials.
“As-a-service” business models like this give construction companies another avenue through which to build sustainable business practices — and to participate directly in the Circular Economy.
A Step Toward Circular
Sustainability-focused business practices are part of the corporate DNA at the Wienerberger Group, which makes bricks and other building materials. The company uses secondary materials like sawdust, sunflower seed shells and recycled ceramic material wherever possible in its production processes. It also has committed to recycling production waste in areas like concrete paver production, reporting that its scrap rate dropped 45 percent between 2014 and 2017, with an additional 23 percent reduction expected by the end of 2020.
Programs such as these are a direct response to the powerful message that customers, employees, shareholders, regulators and communities are sending the construction industry: They expect companies, whatever their line of business, to provide high-quality products, while also being responsible stewards of the Earth and its resources.
Tarkett’s ReStart program is but one example of how partnerships between manufacturers and the construction companies that use their products can help to close the loop, and in doing so, position themselves for long-term success while shrinking the world’s CDW problem.
Stefan Weisenberger is global head of mill products industries at SAP, where he is responsible for solution strategy and roadmap, and strategic customer engagements for these industries. He can be reached at https://www.linkedin.com/in/stefan-weisenberger-5333a55/ or https://twitter.com/belobregovic.