The global economy stands at a critical crossroad today with an unprecedented volatility and supply-chain interruptions in critical and strategic materials leading to $4.7 trillion loss in global economic growth by 2030, which could rise to $25 trillion by 2050. This trend being unsustainable would deplete and degrade Earth’s fragile ecosystem. This would require four Earths to the material requirements of 2050. Alas, we have only one Earth. Thus, sustainable development and resource circularity are inescapable necessities today.
As the UN notes a Circular Economy (CE) is an economic construct in which waste and pollution do not exist by design, products and material are kept in use and natural systems are constantly regenerated. CE fundamentally entails reorienting consumption through resource circularity by reusing and recycling waste and end of life products to create products, co-products and by-products of economic value.
Components of a CE are centered on the ‘6Rs’ of reduce, reuse, recycle, recover, redesign and re-manufacture. Resource circularity is the key technology innovation that would reignite life in end of life products. The circular economy is structured to improve resource circularity and natural resource efficiency.
Several countries have recognised the centrality of circular economy as the new paradigm for sustainable development. They have not only embraced the concept of circular economy in their daily life but have also brought in strict regulations to ensure the compliance to promote more recycling, reuse and refurbishing. China promulgated the circular economy promotion law in 2009 and the European Union announced closing the loop and action plan for the circular economy in 2015 and more recently a monetary framework for circular economy in 2018.
The Ellen Mc Arthur Foundation has prepared an impassioned case for India to adopt circular economy paradigm in its development model. One of the key findings was that adopting circular economic development path in India could create annual value of Rs 14 lakh crores (i.e. $218 billion) in 2030 and Rs 40 lakh crores i.e. $624 billion in 2050 compared with the current development scenario.
NITI Aayog’s own study on the potential of reforms to promote circularity through material recycling also reveals similar astonishing numbers. An annual incremental increase of 5% in achieving resource circularity through recycling alone of major commodities such as ferrous and nonferrous metal, construction and demolition waste, e-waste, paper, plastic and gas alone to generate 1.3 to 1.4 crore jobs, several lakhs of entrepreneurs, infuse about Rs 10 lakh crores and reintroduce upwards of 770 MMT of material into the economy apart from massive saving in energy and water use, huge reductions in CGH emissions and release of several hectare of landfills for more productive pursuits over 5 to 7 year time horizon.
India has possibly the 3rd largest repository of e-waste at about 2.1 MMT but the processing capability is about 450,000 MT. Imports of ferrous scrap is about 6 MMT and by the year 2020, domestic scrap generation of non-ferrous metals is expected to touch 6.5 million tonnes, whereas demand would be about 7.9 million tonnes, creating a deficit of 1.4 million tonnes. About 65% of the total paper production amounting to about 11 MMT comes from recycled paper. Whilst about 90% of PET plastics is recycled, but other plastics such as HDPE, LDPE, PP amounting to about 4 MMT etc are littered which ruin our environment. About 600 MMT of construction and demolition waste is generated but processing capability is less than 1%.
We in India currently discard about 275 thousand tyres per day of which less than 40% is recycled legally. If the End-of-Life Vehicle policy is implemented with dated emission standards, about 22 million vehicles will be off road by 2021. Of this 80% will be two wheelers, 14% cars and about 3% each will be three wheelers and commercial vehicles. These End of Life vehicles present a huge business opportunity for growth, wealth creation and jobs. But at the same time the informal sector remains a social and environmental challenge due to inadequate implementation of pollution and occupational health guidelines.
Therefore, my view is that the role of NGOs in raising awareness and developing the circular economy as a national agenda cannot be overemphasized. Their initiative must be firmly supported since they truly operate at the grass root level and can be useful agents of change. Similarly, the academia must include circular economy studies in mainstream formal education and vocational programs. We need to formalize and bring vocational programs to improve skill requirements of circular economy. Similarly, the R&D institutions must discover new methods and processes to improve material circularity.
NITI Aayog has published a strategy paper on resource efficiency and more recently drafted the first ever comprehensive National Material Recycling Policy that would address various facets of circular economy in a holistic and overarching manner. The policy is linked to the development of a robust eco-system of recycling industries. Appropriate administrative and legislative instruments may be required to implement the policy.
Applications of Industry 4.0 technologies and practices such as sustainable supply chain management, smart production systems, web technologies, reverse logistics and additive manufacturing, all of them can be integrated with circular economy practices to establish a business model that reuses and recycles End of Life products, material and scrap. These new and smart technologies can be the foundation of the nation’s Zero Defect and Zero Effect manufacturing agenda.
The industry is beginning to embrace the idea that today’s wastes are tomorrow’s feedstocks and that an economy that circulates its resources continuously leads to cleaner environments, cost saving, waste prevention, job creation, innovation, inventors and entrepreneurs and a new breed of business start-ups. I would urge industry to study the prospects that circular economy offers and develop sound business models for resource circularity of materials.
It is time for India to explore the possibility of enacting an empowering legislation for promotion of the circular economy to achieve the objective of sustainable, stable and secure progress of the nation and prosperity of its peoples.
(The author is CEO, NITI Aayog, Government of India)(
(Excerpts from the keynote address during the 3rd Edition of Circular Economy Symposium 2019 on 17 June 2019, New Delhi)
