PER­SPEC­TIVE: CIR­CU­LAR OP­POR­TU­NI­TIES

Why Hong Kong com­pa­nies should start turn­ing their waste into a sup­ply source.

The Peak (Hong Kong) - - Contents - ANNA SIMP­SON

Why Hong Kong com­pa­nies should start turn­ing their waste into a sup­ply source

Bao­tou Iron and Steel, a listed Chi­nese min­ing and steel op­er­a­tion, is look­ing to achieve zero waste in its op­er­a­tions, with the help of a chem­i­cal en­gi­neer­ing re­search team. This is no small feat – China man­u­fac­tures half of the world’s iron and steel, and Bao­tou pumps out 10 mil­lion tonnes of steel a year, drawn from its Baiyunebo Mine in In­ner Mon­go­lia. It’s a dirty busi­ness and one that seems far re­moved from en­vi­ron­men­tal con­cern.

Slag – the term for the left-over ma­te­rial when met­als are re­fined from ore – can be highly toxic. Over 20 years ago, slag was con­sid­ered in­ert and in­no­cently added to the con­struc­tion ma­te­ri­als for rail­roads, rooftops and road­ways, among other things. Can it be trans­formed from an en­vi­ron­men­tal hazard into a source of eco­nomic value?

Bao­tou is part­ner­ing with a spin-off from Co­lum­bia En­gi­neer­ing Lab, Greenore Clean­tech LLC, to build a com­mer­cial plant where slag will be bro­ken down in a process sim­i­lar to min­eral car­bon­a­tion and rock weath­er­ing, us­ing car­bon diox­ide in the process. With the help of Co­lum­bia En­gi­neer­ing Lab, Bao­tou will now be able to sell their pro­cessed slag on to other in­dus­tries, from pa­per to ce­ment, as a valu­able re­source. And be­cause car­bon diox­ide – the world’s fore­most green­house gas – is used in the process, it ef­fec­tively re­duces green­house gas lev­els in the at­mos­phere – an­other win for the en­vi­ron­ment.

This is an ex­cel­lent ex­am­ple of in­no­va­tion for what’s now known as the “Cir­cu­lar Econ­omy”, a move­ment to turn sup­ply chains, which of­ten re­sult in prob­lem­atic waste streams, into sup­ply cir­cles – bring­ing value back into the econ­omy. Ac­cen­ture es­ti­mates that Cir­cu­lar Econ­omy ap­proaches can add as much as US$6 tril­lion (HK$46.8 tril­lion) in to global eco­nomic growth by 2030.

There are good rea­sons why Hong Kong should be pay­ing at­ten­tion to the Cir­cu­lar Econ­omy. The price of waste is due to start go­ing up. In March, it was an­nounced that in two years’ time, Hong Kong cit­i­zens and busi­nesses will be­gin to pay a fee of HK$0.11 for ev­ery litre of mu­nic­i­pal solid waste (MSW) they send to land­fill. Those who want to avoid ad­di­tional costs will al­ready have be­gun look­ing for ways to re­duce waste – as will any sell­ers or sup­pli­ers not wish­ing to an­noy buy­ers with un­nec­es­sary dis­pos­able pack­ag­ing.

Avoid­ing the fees as­so­ci­ated with waste isn’t the only rea­son for a cir­cu­lar econ­omy – there is also rep­u­ta­tion, as the move­ment for trans­parency links pol­lu­tion to its sources. Rev­enue is an­other. As with Bao­tou Steel, busi­nesses that can demon­strate the value of their own waste streams will also di­ver­sify their in­come sources, boost­ing their profit mar­gins as well as their re­silience.

Suc­cess­ful ex­am­ples of the cir­cu­lar econ­omy are be­com­ing more plen­ti­ful. In the United States, The Ma­te­ri­als Mar­ket­place, an on­line plat­form for sourc­ing waste byprod­ucts and re­cy­clables as us­able source ma­te­rial, has been launched. A pi­lot pro­gramme in 2015 wound up iden­ti­fy­ing some sur­pris­ing ways to re­use waste. For ex­am­ple, two mil­lion tons a year of baux­ite residue could be used in ce­ment kiln co-pro­cess­ing, sav­ing as much as 14,400 mega­tonnes of car­bon diox­ide emis­sions and about US$40 mil­lion a year.

In Texas, the Ur­ban Min­ing Com­pany is build­ing a 100,000 square foot man­u­fac­tur­ing fa­cil­ity to source per­ma­nent mag­nets, used in con­sumer elec­tron­ics and the au­to­mo­bile in­dus­try, from post­con­sumer waste. In France, the car­maker Re­nault is set­ting up an ex­per­i­men­tal plat­form for end-of-life ve­hi­cle re­cy­cling called In­no­va­tive CAR Re­cy­cling 95% (ICARRE 95), sup­ported by the EU. The goal is to be com­pletely ‘closed loop’, that is to say, us­ing ma­te­ri­als from old ve­hi­cles to cre­ate new cars at the same level of per­for­mance as those made from new sources. Sin­ga­pore-based China Nav­i­ga­tion Com­pany, a leader in the Sus­tain­able Ship­ping Ini­tia­tive, re­cently an­nounced the re­cy­cling of two ves­sels in Alang, In­dia.

The first step to­wards cir­cu­lar econ­omy suc­cess is to map and match re­source de­mands with waste sup­ply. In­ter­na­tional Syn­er­gies, an or­gan­i­sa­tion founded to help in­dus­try func­tion more like ecol­ogy, is cur­rently work­ing with Wuhan DRC and

Wuhan Uni­ver­sity of Science and Tech­nol­ogy to map cir­cu­lar econ­omy pos­si­bil­i­ties in the area. To­gether, they will pro­duce a pri­ori­tised map of the po­ten­tial to re­duce car­bon emis­sions and costs, while de­liv­er­ing an in­fra­struc­ture plan that in­cludes met­ros, air­ports, roads and build­ings, as well as pol­icy rec­om­men­da­tions to help re­alise the op­por­tu­ni­ties.

Hong Kong lacks an in­ter­nal man­u­fac­tur­ing hub to ab­sorb its own waste, but the in­creas­ingly so­phis­ti­cated in­dus­tries in the Pearl River Delta may help. In 2010, the Hong Kong Cham­ber of Com­merce pro­posed a model for cir­cu­lar econ­omy growth be­tween Hong Kong and the PRD, with Hong Kong waste be­com­ing a handy source of low-cost sec­ondary ma­te­ri­als. The Cham­ber recog­nised that there needs to be: ef­fi­cient trans­bound­ary sup­ply chains; co­or­di­na­tion of waste streams ac­cord­ing to their po­ten­tial value; and com­pet­i­tive pric­ing to en­sure man­u­fac­tur­ers don’t use vir­gin ma­te­ri­als.

In Au­gust, I had the priv­i­lege of chair­ing a Sus­tain­abil­ity Lead­er­ship break­fast dis­cus­sion hosted by Metta, Hong Kong’s on­line/ off­line gath­er­ing club for en­trepreneurs and in­vestors, ask­ing what we can do to make this the green­est city in Asia. We were re­minded of the waste not, want not mind­set that was so alive in the city a cou­ple of gen­er­a­tions ago. Whereas then it was mo­ti­vated (in part at least) by post-war poverty, now it can be to cre­ate last­ing eco­nomic value through op­por­tu­ni­ties un­der our nose.

BUSI­NESSES THAT CAN DEMON­STRATE THE VALUE OF THEIR OWN WASTE STREAMS WILL ALSO DI­VER­SIFY THEIR IN­COME SOURCES, BOOST­ING THEIR PROFIT MAR­GINS AS WELL AS THEIR RE­SILIENCE

Tech waste could po­ten­tially be a lu­cra­tive source of in­come.

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