Category Archives: Circular Economy

Collaboration, Innovation and Sharing: Turning Circular Supply Chain Vision into Reality

By Todd Hoff, VP Marketing and Customer Solutions, CHEP North America

When many of us were young, our parents taught us to share because it is polite and a nice thing to do. Today, as the world faces significant population growth and the environmental challenges that follow, the concept of sharing is a key building block in the long-term strategy to build a better world.

Experts say that the global population is expected to grow from 7.5 billion today to nearly 10 billion by 2050, adding more than two billion consumers to the global economy that will need access to safe, affordable and nutritious food and personal care products.

For decades, the fast-moving consumer goods industry has kept pace with growing population and consumer demands thanks to the development of innovative agricultural, manufacturing and supply chain practices. In recent years, academics, industry leaders, economic and sustainability thought leaders and efficiency experts have been collaborating to develop equally innovative plans for successfully meeting the challenges of the future.

That is where the concept of sharing comes in. Moving beyond the concept of reduce, reuse and recycle, stakeholders in the global economy have developed a vision of a Circular Economy, powered by a Circular Supply Chain that produces zero waste and zero carbon emissions. The fundamental building block of a Circular Supply Chain is shared and reusable assets.

At CHEP, our business model is based on shared and reusable assets. We move consumer goods throughout the world on more than 300 million reusable pallets, containers and crates that are used over-and-over again by our customers. We are committed to the vision of a Circular Supply Chain and bringing it to life through ongoing collaboration with our customers, thought leaders and stakeholders around the globe.

On February 8th, CHEP partnered with the Wharton School’s Initiative for Global Environmental Leadership at the University of Pennsylvania for a thought leadership event entitled,  Connecting the Dots: Sustainability Through a Circular Economy. CHEP teamed up with visionary stakeholders – a major packaging manufacturer; a multinational food, snack and beverage corporation; a grocery retailer and a leading consumer research company. They each discussed their sustainability efforts and collaboration in helping to turn the vision of a Circular Supply Chain into reality.

A recent study by McKinsey & Company shows that the consumer goods supply chain is fertile ground for both efficiency and sustainable savings presently and over the long-term. That is intriguing, because our focus at CHEP is collaborating with our customers to optimize and improve the sustainability of the supply chain.

Through our end-to-end supply chain solutions, we help our customers save money, become more efficient and more sustainable. For instance in the past 12 months, when it comes to sustainability, we have helped customers keep 1.4 million trees on the planet and eliminate 2.3 million tonnes of CO2 from the atmosphere, equivalent to taking more than 485,000 passenger vehicles off US roads. We’ve also removed 1.3 million tonnes of waste from landfills, eliminated 3 million empty truck miles and avoided more than 3,000 tonnes of food from being damaged during transport.

In collaborating with our customers, CHEP and its parent company, Brambles, have been recognized by the leading Circular Economy foundation and a major grocery retailer as a key component of the Circular Supply Chain because of our shared and reusable business model.

We are excited about developing an efficient and sustainable global supply chain that benefits people and the planet for generations to come. We are equally proud to partner with our customers and leading stakeholders to achieve a Circular Economy and a Circular Supply Chain, through sharing our experiences at Connecting the Dots.

Visit www.chep.com for more information or follow us on Twitter @CHEPna and LinkedIn. Please also check out our YouTube channel.

Applying Circular Economy Principles to Agriculture

By Neelam Ferrari

If you are reading this article, it is likely that you are aware of the benefits of reducing food waste and utilizing resources efficiently, towards feeding a growing global population.  When it comes to agriculture, this is even more important as farmers need to be aware of costs around water, fertilizer, labor and other items.  Once a plant is harvested, much of that plant is not needed for its primary purpose, which is consumption.  For example, take a look at corn.  A corn plant on the typical US farm grows anywhere between 6 and 12 feet high, and the roots can add another 6 feet.  Also consider that on a typical corn plant there are only 1-2 ears of corn per stalk.  So for two ears to be harvested, there is a lot of extra biomass that goes along with it, which is not edible.  Instead of discarding this excess material as waste, it makes good environmental sense and good business sense to find some value for this material.  This is a great opportunity for the circular economy (CE).

The World Economic Forum recently wrote an article stating that farmers produce more than enough food for the global population, so people really should not go hungry.  This is a perfect justification for CE applications, which blend technology with business in an attempt to use everything in an industrial process.  Moreover, the waste of one industry can be the fuel for another, so that all of the component fit together like a puzzle.  Connecting these pieces of this puzzle can be a challenge, but as technological advances in fields like biotechnology and material science become more widespread, more industries are learning of the benefits.  So in the example above, does the remaining biomass from a corn stalk have no value?  It is probably the opposite.  Even though the stalk can not be eaten, it does have value as it can be burned for fuel, or ground and reused as an organic fertilizer.  Also, there is still nutritional value, so the remaining biomass can be blended into feedstock for other livestock.  By reusing the stalk, growers can also sell to other industries, instead of just discarding or burning as trash.

In addition to finding new uses for what was once ‘wasted’ can applying CE principles lead to new ways to grow crops so that waste is not generated in the first place?  This could be where we look more closely at the innovative work taking place at the MIT Media Lab’s OpenAG Initiative.  OpenAG has built a prototype food computer where the goal is to create specific climates that are compatible with commercial crops in order to optimize phenotypic characteristics.  For example, if growers wanted a particular type of tomato with a targeted color, taste, and texture, a “climate recipe” can be created and shared resulting in the desired tomato.  By optimizing food production in this manner we can also save water, energy, and money.  This will be a topic explored in future posts.

The CE holds tremendous promise for the agriculture sector and we really can now start to think seriously about making significant changes in the global food production system.

Going Local: The Impact of Renewable Energy on Circular Economy

By Sirui Ma

Moving toward circular economy, rethinking and redesigning the production and recycling cycle is crucial to diminishing externalities. In order to “close the loop”, a variety of efforts are concerned, including materials used in production, easiness to dismantle disposed products, etc. Among all efforts that contribute to a “closed loop”, introducing renewable energy to the production process is one of the most essential. The significance of renewable energy is not limited to the concept “renewable”, which is often related with less carbon emission. One other advantage of renewable energy is its peculiar characteristics: LOCAL.

Why Renewable Energy?

Carbon emission is one of the major barriers to “close the loop” since a large percentage of manufacturers are still heavily relying on burning fossil fuels such as coal and refined oil products. In the perspective of reducing carbon output into the environment, introducing renewable energy input in the production line has gained its importance more than ever before. According to EIA statistics, 1364 million metric tons of carbon dioxide was produced by coal power plants in 2015, accounting for 71 percent of carbon emission by the national electric power sector. Given the huge quantity of carbon emission by coal burning, it is intuitive to imagine how renewable energy can reduce carbon emission at an extraordinary scale.

From Global to Local

However, in the process of replacing traditional energy with renewable energy, several properties of renewable energy need to be addressed: energy density, energy storage and transportation, as well as the match-up of energy suppliers and end-users.

While it is hard to generalize the characteristics of all renewable energy, different type of renewable energy has different advantages and limits. Among all renewable energy, hydroelectric power is one of the most stable energy types with a relatively high energy density. Wind power is strong but relatively unstable due to variation of wind speed and direction. Solar power has a smaller density but overall a stable output. Based on limits and advantages of different types of renewable energy, it is essential to characterize the type of energy demand of a specific type of production and find the most appropriate renewable energy to serve a local industry. The process of determining the energy source(s) for a factory should thus be added into the “rethinking” procedure of circular economy agenda.

In rethinking and redesigning of the industry, it is also momentous to understand the characteristics in the production and transportation of renewable energy. Fossil fuel, which stores energy in a condensed form, often needs a series of energy “dilution” steps before it can be used in daily life, in the form of electricity. Renewable energy, on the other hand, is in a relatively loose form with energy density of equal or less than 1 kW/m2 in its original state. Although the energy density cannot be compared with fossil fuels, the level of energy may be used directly by households without extra steps of “dilution”. Avoiding the “dilution” process can significantly increase the efficiency of energy use. What’s more, because of global scattering of fossil fuel reserves, the energy often experiences a “long haul” before reaching users. A huge energy loss is induced in the transportation process. In the case of renewable energy, “long haul” is definitely not an ideal choice. Based on the fact that long distance transportation is both technically difficult and costly, the use of renewable energy should be concentrated on the local economy.

Circular Economy is not just about reducing the environmental externalities of an industry. In fact, reducing energy loss is also vital in the idea of “closing the loop”. By relying more on renewable energy, an appropriate match between renewable energy and end-user demand can significantly improve the efficiency of energy use. In a well-designed circular economy structure, raw materials and energy resources are all from local suppliers. Appropriate match-ups between energy suppliers and end-users should be designed beforehand. For existing manufacturers, retrofitting the energy and raw material supply based on current circumstances is also promising and cost-effective. Overall, a more efficient management system is required to approach the goal of localizing circular economy, either designing or retrofitting.