Waste Conversion in the Circular Economy

Circling back on sustainability

The concept of a circular economy was first proposed during the 1970s by Dr. Walter Stahel. An architect and graduate of the Swiss Federal Institute of Technology Zürich, Stahel recognized that traditional methods of production were ultimately infeasible. He proposed that companies should extend product life and that this was a natural starting point for a transition towards a more sustainable alternative.

Stahel further refined his ideas in his 1982 paper, "The Product-life Factor," where he also coined the term "closed loop economy." Since then, he has been an unfailing advocate of circularity.

"Cycles, such as of water and nutrients, abound in nature — discards become resources for others," writes Stahel in a 2016 article. "Yet humans continue to make, use, dispose … a 'circular economy' would turn goods that are at the end of their service life into resources for others, closing loops in industrial ecosystems and minimizing waste."

"It would change economic logic because it replaces production with sufficiency," he continues. "Re-use what you can, recycle what cannot be reused, repair what is broken, remanufacture what cannot be repaired. A study of seven European nations found that a shift to a circular economy would reduce each nation's greenhouse gas emissions by up to 70 percent and grow its workforce by about 4 percent."

A circular economy shifts global supply chains to be more akin to natural processes. Rather than being discarded when they're no longer usable, products are either restored to working order or broken down into raw materials. The Ellen Macarthur Foundation sees the circular economy as a solution to climate change and other global challenges by “decoupling economic activity from the consumption of finite resources," thereby reducing both waste and pollution while also regenerating nature.

To be blunt, there can be no net zero without a circular economy. Even the most sustainable supply chain will inevitably produce some waste. And certain processes — such as the burning of natural gas to generate energy — will never be fully waste free.

Besides its environmental implications, the circular economy is also immensely beneficial from a purely economic standpoint. The European Parliament maintains the circular economy could not only reduce overhead and strengthen supply chains but also foster competitiveness, stimulate the job market and save consumers money.

Waste conversion key to circular economy

The concept of a closed-loop system is foundational to the circular economy. Such a system cannot be achieved solely by reducing waste. Even natural processes produce waste, after all — the difference is that in nature, that waste is eventually converted back into something usable.

Similarly, waste conversion technology is essential to the circular supply chain, providing a far more effective means of managing and mitigating waste compared to standard recycling. The petrochemical sector — among the first to embrace waste conversion — has long recognized this. Virtually every major chemical company has either established a strategic partnership with a waste conversion company or begun developing its own in-house technology, according to a 2022 report by the American Chemical Society.

There are multiple advantages to doing so. First, by feeding waste back into the supply chain, a business considerably reduces its carbon footprint. This makes waste conversion invaluable to any carbon offsetting or reduction strategy.

Waste conversion can also considerably reduce operational overhead, replacing costly resources with more cost-effective repurposed materials. Any waste products a company cannot use may be sold to a waste conversion specialist and converted into materials that might be leveraged elsewhere.

These benefits are not exclusive to the chemical industry. They apply to nearly every company involved in production, manufacturing or energy generation. Even mining companies can repurpose the waste generated from resource production, potentially improving their output in the process.

Building businesses from waste

A successful company that provides waste conversion services and solutions will typically leverage one of the following business models.

The first option is processing waste products from client organizations. A business might pay a fee to have the waste conversion company collect and process their waste products. At that point, the company could either deliver the converted materials back to the client or sell them.

Alternatively, the waste conversion company might provide clients with the necessary technology and expertise to manage their own waste conversion. This is Omni Conversion Technologies' business model. Based in Canada, the company offers its Omni200 waste management system to everything from municipalities to manufacturers and renovation companies across the globe.

Another option for waste conversion companies is to either acquire waste products from other organizations or mine them from waste disposal sites. At that point, and through innovative technologies, the company can then transform waste into a range of valuable products.

Canadian firm Emergent Waste Solutions, for instance, uses its disruptive, patent-pending Advanced Thermolysis System to transform municipal solid waste, tires, plastics, biomass and livestock waste into valuable carbon-based commodities, including renewable natural gas, oils and bunker-grade diesel.

In lieu of products, some waste conversion companies might opt to directly generate energy. This is the approach adopted by BC-based Covanta, which diverts municipal waste from landfills to produce electricity for both homes and businesses. According to Covanta, its waste-to-energy facilities currently power roughly one million homes.

Investor takeaway

The circular economy and waste conversion technologies are interconnected — and both are necessary for sustainability. While there are several potential business models a waste conversion company might adopt, they ultimately boil down to the same core idea: waste in, resource out.

This INNSpired article is sponsored by Emergent Waste Solutions. This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Emergent Waste Solutionsin order to help investors learn more about the company. Emergent Waste Solutions is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

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The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Emergent Waste Solutionsand seek advice from a qualified investment advisor.