Thursday, November 30, 2023

“Circular Business Models: Digital Innovations Are Driving Sustainability”

Circular economy expert Shalini Goyal Bhalla’s insights on futuristic business models and servitization with technology

Introduction: Discover the future of sustainable technology and circular economy practices in our exclusive interview with Shalini Goyal Bhalla, Founder & MD of the International Council for Circular Economy (ICCE). Explore e-waste recycling, circular business models, and the pivotal role of technology, design, and innovation. Join the exclusive conversation with senior Journalist Mahima Sharma, at Industry Innovators this week. 

Mahima: E-waste is a significant concern globally. What latest technological innovations and solutions are emerging to address the challenges of recycling and reusing electronic products more effectively?

Shalini G. Bhalla: According to the Global E-Waste Monitor in 2016, 44.7 Mt of WEEE were generated worldwide, of which only 20% were recycled. Compared to natural resources, WEEE exhibits a much higher concentration of several technology metals such as copper and precious metals, whereas the content of (critical) trace metals (i.e., In, Ga, Ge, Ta) is located in the range of primary ores. Sevreal recycling techniques are used today to extract these metals. These include conventional recycling technologies (i.e., direct treatment (landfill and incineration) and physico-mechanical separation) and advanced recycling technologies (i.ePyrometallurgy, hydrometallurgy, biometallurgy, electrometallurgy, vacuum metallurgy, supercritical fluids, full recovery of nonmetallic fraction, etc.) are reviewed and analyzed based on their advantages and disadvantages. 

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Pyrometallurgy makes physical and chemical transformations in materials such as metals, minerals, and ores. It is used to separate metals by density. It is presently applied to recycle spent lithium-ion batteries (LIBs). Hydrometallurgy is a method of metal recovery from ores and waste materials at relatively low temperatures in aqueous phases. 

E-waste recycling sees many challenges. This includes poor infrastructure in developing countries. India has very few recognised and government-approved recycling centres to dismantle and repurpose electronic waste. The information barriers are real. For example, there is a lack of knowledge about cost-effective and efficient e-waste management techniques, as well as how to maximise the utility of end-of-life products. A huge chunk of ewaste continues to be disposed of in most unfavourable conditions. Last, the lack of knowledge among consumers lead to reckless e-waste disposal. 

Mahima: Could you elaborate on the specific ways in which changing business models can facilitate the shift towards a circular economy, and how can companies effectively navigate this transition?

Shalini G. Bhalla: In the last 40 years, demand for metals has increased by 87%. The electronics sector, especially the consumer white goods sector, has been one of the major contributors of this demand along with buildings and infrastructure and the automotive sector.The digitalisation across the world has added more than 1.5 billion mobile phone units in 20172 accounting for 2,25,000 tons of material usage during manufacturing (considering an average weight of 150 gram/unit). According to the Global E-waste Monitor 2017, the estimated value of raw materials by mining from e-waste stood at 55 billion euros with mobile phones contributing 9.5 billion euros. The table below shows the quantum and potential value of raw materials which can be extracted from e-waste in the year 2016.3 

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Potential Value of Raw Materials
Potential Value of Raw Materials in E-waste in 2016 

Companies can explore one or more of the below to make a circular transition-

  • By replacing traditional material inputs derived from virgin resources with bio-based, renewable, or recovered materials, reduce demand for virgin resource extraction in the long run
  • Recycle waste into secondary raw materials, thereby diverting waste from final disposal while also displacing the extraction and processing of virgin natural resources
  • Extend the use period of existing products, slow the flow of constituent materials through the economy, and reduce the rate of resource extraction and waste generation
  • Facilitate the sharing of under-utilised products, and can therefore reduce demand for new products and their embedded raw materials
  • Promote services rather than products, improve incentives for green product design and more efficient product use, thereby promoting a more sparing use of natural resources.

Mahima: In what industries or sectors do you see the most significant potential for adopting circular economy principles through the integration of technology and digitization?

Shalini G. Bhalla: Technology and digitization plays a pivotal role in enabling and enhancing the effectiveness of a circular economy. Technology allows marketplaces that connect producers, consumers, and recyclers, facilitating the efficient flow of products and materials back into the supply chain. Advanced data analytics and machine learning can optimize the reverse supply chains by predicting demand for recycled materials and managing the collection and transportation of used products and materials. Blockchain provides a tamper-proof ledger that can be used to track the origin and journey of products and materials. 

This ensures transparency and traceability in supply chains, which is crucial for verifying the sustainability and authenticity of recycled or reused materials. Technology enables real-time tracking of products and materials, allowing stakeholders to monitor their life cycle and environmental impact. Tools like 3D modeling and simulation enable designers to create products that are easier to disassemble, repair, and recycle, aligning with circular design principles. Artificial intelligence is helping to identify opportunities for material substitution, product modularity, and waste reduction during the design phase.

Circular Business Models 1

Mahima: Circular design principles are crucial in product development. Can you elaborate on how advanced design software and simulations can aid in the creation of products that are easier to repair, remanufacture, and recycle?

Shalini G. Bhalla: Circular design (CD) leads to creation of products that are sustainable, resource-efficient, and environmentally friendly. These principles are rooted in the concept of a circular economy, which aims to minimize waste, maximize resource use, and reduce the environmental impact of products throughout their life cycle. CD focuses on using fewer resources, including raw materials, energy, and water, during the production of products and encourages the use of renewable and sustainable materials to reduce dependence on finite resources. It emphasizes creating products that are durable, robust, and built to last. This reduces the need for frequent replacements and extends the product’s life cycle. Designing for longevity ensures that products remain functional and desirable for a more extended period, reducing overall resource consumption. Circular products are often designed with modular components that can be easily replaced or repaired. This approach makes maintenance and upgrades simpler and more cost-effective.

In India, Ikea, the Swedish furniture giant, has been implementing circular design principles. They have introduced products like the “Better Air Now” collection, which features rugs and curtains made from air-purifying textiles. The materials used in these products are sourced sustainably, and the products are designed for longevity and recyclability. Ikea India is also actively exploring ways to take back and refurbish furniture to extend its life, reducing waste and promoting circularity in the furniture industry.

Patagonia, an outdoor clothing company in the USA, is a notable example of circular design and sustainability. They promote the idea of buying high-quality, durable clothing that lasts. Their ‘Worn Wear program’ encourages customers to trade in their used Patagonia items for store credit. Patagonia then refurbishes and repairs these items, ensuring they remain in use for as long as possible. This approach reduces the need for new product manufacturing and minimizes waste.

LEGO, the Danish toy company, is committed to reducing its environmental footprint. They have introduced sustainable bricks made from plant-based materials, such as sugarcane. These bricks are designed to be just as durable and compatible with existing LEGO sets. LEGO is actively working towards ensuring that all its products and packaging are made from sustainable materials by 2030, reflecting a strong commitment to circular design.

Mahima: The concept of a circular economy often involves partnerships and collaboration across various industries. How can technology companies effectively collaborate with traditional industries to drive the circular economy agenda forward? 

Shalini G. Bhalla: Effective collaboration between technology companies and traditional industries can result in transformative changes that drive the circular economy agenda forward. It allows for the integration of innovative technologies and processes into established industrial sectors, leading to reduced waste, lower environmental impact, and enhanced sustainability across the board. Technology can enable understanding of the specific challenges and needs of industry to identify pain points related to resource use, waste generation, and sustainability. They could then develop customized solutions that may involve IoT (Internet of Things) devices, data analytics, automation, and software platforms tailored to the industry’s operations. 

Effective collaboration relies on data sharing and integration. Technology would enable us to collect, analyze, and leverage data to optimize resource use, track circular performance, and make informed decisions that would further help in improving energy efficiency and transitioning to renewable energy sources. This can include implementing smart grids, energy management systems, and renewable energy solutions within industrial operations. Helping industry workers adapt to new technologies and circular practices so that the workforce is equipped to embrace sustainability-driven changes can also be driven to large masses through technology. Industry can benefit from fresh ideas and emerging technologies that startups bring to the table, fostering innovation.

Mahima: How does the concept of servitization, where companies offer services instead of just products, play a role in the circular economy, and how can technology support this transition?

Shalini G. Bhalla: Servitization, supported by technology, is gradually promoting resource efficiency, waste reduction, and sustainable product design. As companies shift from selling products to offering services, they are better positioned to create and maintain products that align with circular economy principles while meeting customer needs. Technology is the catalyst that enables this transition by providing the tools and data needed to manage products as services effectively.

In a servitization model, popularly known as Product as a Service (PAAS), customers pay for the functionality or utility of a product rather than owning it outright. This approach encourages manufacturers to design durable and long-lasting products since they remain responsible for the product’s maintenance and performance over time, leading to product longevity. 

Some companies are incentivized to recover and recycle materials at the end of a product’s life. This promotes responsible disposal and minimizes waste. Philips, the Dutch multinational company, for example, has embraced circular design principles in its lighting solutions. They offer “Light as a Service,” where they retain ownership of the lighting equipment and take care of maintenance and upgrades. This shift to a service-based model encourages product durability and recycling, reducing the environmental impact of lighting solutions.

circular economy

Mahima: Can you provide an example or two of organisations that have successfully adopted circular business models by leveraging digital technology, so that the readers understand the key takeaways from your experiences?

Shalini G. Bhalla: Nestlé India, a leading food and beverage company, has embraced a circular business model in its operations. One notable initiative is their “MAGGI Wrappers Return Program.” In collaboration with a digital platform called “TerraCycle,” Nestlé encourages consumers to return used MAGGI noodles wrappers through designated collection points.TerraCycle provides a digital platform where consumers can locate collection points and participate in the program. They can track their contributions and earn points, which can be redeemed for donations to charities or schools. Nestlé collects the used wrappers and sends them to recycling facilities, where they are transformed into new products. This initiative not only reduces waste but also promotes consumer engagement and rewards through digital technology.

Bounce, an Indian mobility solutions provider, operates a fleet of electric scooters and bicycles available for rent in several Indian cities. It relies on Internet of Things (IoT) technology to track the location, redistribute its vehicles to high-demand areas, reducing idle time and optimizing resource use while maintening its vehicles. Through a user-friendly mobile app, customers can locate and unlock available vehicles for rent. By offering shared electric mobility, Bounce encourages people to use these vehicles instead of owning their own. This reduces the environmental impact associated with manufacturing and disposing of individual vehicles. 

Mahima: Lastly, what do you see as the most exciting and promising technological advancements on the horizon that could further accelerate the transition to a circular economy in the coming years?

Shalini G. Bhalla: The role of technology will become even more pivotal when Digital Product Passports (DPPs) and Carbon Border Adjustment Mechanisms (CBAM) are implemented in full swing. These tools are essential for achieving sustainability goals, ensuring transparency, and reducing the carbon footprint of products and supply chains. DPPs require a wealth of data about a product’s entire life cycle, from raw material extraction to disposal. Technology would be instrumental in collecting, managing, and securely storing this data. IoT sensors, RFID tags, and blockchain can help capture real-time information about a product’s journey. Advanced carbon tracking and accounting software, combined with data from sensors and supply chains, would be needed to provide accurate and real-time carbon emission data for products.

Carbon Border Adjustment Mechanism (CBAM) is the EU’s landmark tool to fight carbon leakage and one of the central pillars of the EU’s ambitious Fit for 55 Agenda. It requires accurate tracking of emissions associated with imported products. Technology would allow monitoring and reporting of emissions at various stages of production and transportation, ensuring compliance with CBAM requirements. Automated systems can calculate and verify carbon-related tariffs, making the process efficient and transparent.

About Shalini Goyal Bhalla: Shalini Goyal Bhalla, Founder and MD of the International Council for Circular Economy (ICCE), a prominent Indian think tank, advocates global adoption of circular economy practices. As ICCE’s Managing Director, she forges partnerships with governments, businesses, and NGOs to advance the circular economy agenda nationally and globally. She authored India’s first book on the subject and edited the first Journal on Circular Economy, promoting research, innovation, and policy. Recognized as a global thought leader, her recent paper was published by the Economic Advisory Council to the Prime Minister and the G20 compendium. The Finnish Government invited her to lead Global South discussions at the World Circular Economy forum, uniting 18 countries.

Image Courtesy: Circular Economy by Freepick, Second Circular Economy Image


The opinions expressed within this interview are the personal opinions of the protagonist/protagonists. The facts & statistics, the work profile details shared by the protagonist/ protagonists do not reflect the views of TechThirsty or the Journalist. Neither TechThirsty nor the Journalist hold any responsibility or liability for the same.

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Mahima Sharma
Mahima Sharma
A regular columnist at TechThirsty and other reputed webzines, Mahima is a Senior Journalist based in Delhi NCR in TV, Print & Online Journalism since 2005. In her span of work she has been associated with CNN-News18, ANI - Asian News International (A collaboration with Reuters), Hindustan Times and other top media houses. In March 2022, she was selected as an Entrepreneurship Education Mentor at Women Will - An Entrepreneurship Program by Google in Collaboration with SHEROES. She has several awards and national recognitions to her name.

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