What is the circular economy and why we need to pay attention

Environmental sustainability is a societal constant; however, the conversation surrounding the planet’s future has recently been boiling over. Economists and environmental experts believe that, based on our lifestyle needs and the way we generate waste, the current economic model is unsustainable. This has added weight to the notion that a circular economy is the only hope for a sustainable future.

It’s becoming clearer that our current lifestyles and business practices are guaranteed to send the quantity and cost of waste skyrocketing. This would see the loss of valuable resources, prevent organisations from generating new jobs and sustainable supply chains, and even stymie entire industries. Organisations are aware of the risk and the need to act, with numerous reports emerging about circular economies and what society needs to change to facilitate them.

NSW Circular’s The circular economy opportunity in NSW and the Australian Circular Economy Hub’s Strategic action plan 2020-23, funded by the Australian government, are only two examples of reports aiming to drive leading waste generating industries, like construction, to adopt sustainable operations that could generate billions for Australia’s GDP.

What is the circular economy?

A circular economy is a regenerative model that fosters economic growth instead of using finite resources. A traditional linear system involves extracting resources to make products that are inevitably discarded and replaced with new products. The circular system, however, keeps resources in use for as long as possible by extracting their maximum value for repurposing.

Traditional economic models create a need to replace and upgrade goods regularly, which generates more waste. Conversely, a circular economy provides methods that recover materials at the end of their life to be used again, forming a continuous cycle of reuse and reinvention.

MET Recycling’s process is a practical example of a circular system in action. After extracting as much reusable construction waste from building and demolition sites as possible, it is later used as material in new construction projects. This reduces the amount of construction waste going to landfill and reduces the need for finite resources to make new building materials.

Despite our awareness of the need for sustainable practices, there is plenty of room for a circular economy to make a difference in Australia. According to NSW Circular’s The circular economy opportunity in NSW, Australians have the second-highest material footprint per capita in the OECD, and NSW alone generates almost three times the global average CO2 emissions per capita. With 20 million tonnes of core waste going to landfill every year, the amount of waste we generate could fill Sydney Harbour by 2040. Australia also only generates US$1.28 of economic output for every kilogram of materials consumed, ranking us the third lowest for material productivity and the lowest for manufacturing self-sufficiency in the OECD.[1]

The circular model not only addresses Australia’s impact on the planet but could also provide ample economic benefit. Repurposing resources from a range of different areas would require new jobs and supply chains, presenting new investment opportunities and significant waste cost savings. According to KPMG’s Potential economic pay-off of a circular economy for Australia report, Australia’s food, transport and built environment sectors alone represent a potential economic benefit of $23 billion in present-value GDP by 2025. It is also estimated that a circular economy would rise to a present value of $210 billion GDP and an additional 17,000 full-time equivalent jobs.[2]

Construction in a circular economy

The construction sector has arguably the greatest growth potential in a circular economy due to its waste generation rates and resource recovery opportunities. According to the Australian Bureau of Statistics, the construction sector generated almost 13 million tonnes of waste in the two years to 2018-19.[3] With NSW’s $107-billion infrastructure pipeline contributing to a record-breaking $300 billion public infrastructure pipeline across the country, the amount of construction waste can only get bigger.[4] However, because construction waste is largely made up of masonry materials like wood, metal and rubble, much of the waste generated by construction can be salvaged, processed and reused in future projects.

With millions of tonnes of waste avoiding landfill through a circular economy, the construction sector would be in a strong position to capitalise on the transport and landfill fees savings and the commercial value of using low-impact materials. It is this example of financial benefits by closing the loop on our current economic model that makes governments and economists stand up and pay attention, and why we should too.

If you want to get the most recycled materials out of a construction or demolition project, contact MET Recycling on 1300 MET 123 or make an online enquiry. We provide affordable and comprehensive services for your construction needs.

[1] NSW Circular 2020, ‘The circular economy opportunity in NSW’, https://www.nswcircular.org/wp-content/uploads/2020/11/the-circular-economy-opportunity-in-NSW.pdf

[2] https://home.kpmg/au/en/home/insights/2020/05/potential-economic-pay-off-circular-economy-australia.html

[3] https://www.abs.gov.au/statistics/environment/environmental-management/waste-account-australia-experimental-estimates/2018-19

[4] https://www.nswcircular.org/key-sectors-that-will-catalyse-the-australian-circular-economy/