What is the relation between carbon management and the circular economy? SKAO and Utrecht University have researched circular economy developments and how the CO2 Performance Ladder can stimulate a circular economy.
CO2 emissions play an important rolein climate change. Reducing carbon emissions is therefore essential to achieve climate goals. Parallel to the reduction of carbon emissions is the circular economy as an upcoming development that contributes to the fight against climate change. A circular economy is briefly described as the elimination of waste in the supply chain by means of prolonging product life cycles, reusing materials and diminishing the use of raw materials by replacing it with sustainable or reusable alternatives. The Foundation for Climate Friendly Procurement and Business (SKAO), owner of the CO2 Performance Ladder, regularly receives questions from its stakeholders concerning the relation between the CO2 management system and circularity. Moreover, organisations certified on the CO2 Performance Ladder make use of circular solutions to reduce their CO2 emissions and adhere to the requirements of the management system, particularly for requirements 4D/5D of the CO2 Performance Ladder. These solutions range from reusing asphalt to producing packaging materials from tomato waste streams, to stimulating organisations to do chain analyses, which lays a foundation for circular thinking.
Earlier research conducted by SKAO and the Technical University of Delft on climate neutral infrastructure points out that circular solutions play an important part in reducing emissions of asphalt, concrete and steel. This is no surprise, because carbon reduction contributes to accelerating the circular economy. However, SKAO wonders whether businesses also hold this notion on the CO2 Performance Ladder and circular economy. How does the CO2 Performance Ladder stimulate the circular economy and how can SKAO optimize circularity through the Ladder?
This was the starting point of the scientific research that a master student of the University of Utrecht has conducted for SKAO as a master thesis. The research consisted of a literature study and interviews with 19 organisations. The organisations are either certified on the CO2 Performance Ladder or make use of the Ladder as a procurement instrument. The interviewed organisations are operational in the sectors of infrastructure, waste management or engineering and are working towards CO2 reduction as well as circularity.
The research results of the literature study and interviews are to be summarized in three subjects, namely:
Both the literature study as well as interviews show that organisations find CO2 management to be more mature in comparison to circularity. Carbon emissions are measurable and businesses have been working on CO2 management for several years by being certified on the CO2 Performance Ladder. Circularity on the other hand contains several theoretical principles and organisations find it challenging to translate these principles to practice. The interviewees of this study concluded in terms of CO2 management, that ‘easy’ measures to cut back carbon emissions, such as purchasing green electricity, have already been applied. In order to stimulate further carbon reduction, businesses must take more challenging steps such as changing the behaviors of their employees or investing in sustainable technology. Examples are business travel measures or investing in electric vehicles. The interviewees found CO2 management important, but were even more enthusiastic about circular economy. The organisations view circular economy as a new and popular development which they would like to be a part of. There were however, a few challenges in implementing circularity, such as flexible product design for future generations.
The interviewees perceive CO2 management and circularity as two different subjects, in which circularity is perceived to be more related to projects while CO2 management is linked to organizational management. In most cases, there are different people and departments working separately on carbon reduction and circularity. A similarity between CO2 management and circular economy is that in both the use of renewable energy and fuels in businesses are of the essence. Business chains contain embedded carbon emissions, therefore attention for measures to reduce these embedded emissions is necessary to achieve climate goals. A difference between CO2 management and circularity according to the interviewees, is that circular measures can result to an increase incarbon emissions in a short term period and reduce carbon emissions in the long term. For example, recycling products leads to more carbon emissions during the process of recycling, but it prevents emissions in the long run. When the focus is on carbon management, recycling can be perceived as disadvantageous. This goes for both ways, because focusing on circular economy can also be disadvantageous for CO2. For example, when large distances are to be travelled to implement the circular solution or when waste materials with a high CO2 impact are being used. Another subject is the measurement of CO2 and circularity. The interviewed organisations measure and manage their CO2 emissions quantitatively, whereas the measuring method for circularity differs greatly between businesses. There were as much organisations that make use of life cycle assessments (LCA) as a tool to measure circularity as organisations that do not measure circularity at all. Challenges for measuring circularity are representative data collection and conflicts between circular indicators, among other things. Organisations mostly engage in storytelling on circular activities to generate awareness and found it unnecessary to measure these activities by means of a quantitative method. However, the interviewed organisations agreed that they would like to be able to monitor both circularity as well as CO2 management in a coherent way.
There is no standard to measure circularity. In literature, most studies refer to CO2 impact as an indicator to measure the impact of circularity. The interviewees were divided on whether CO2 can be seen as an indicator for circularity. On the one hand, it is a solid and simple way to measure the impact of circularity and on the other hand, it is only one of the aspects of the circular economy and does not include other aspects. Focusing on renewable energy and fuel is essential for a circular economy and this can be monitored by means of CO2 impact. On the question of whether the CO2 Performance Ladder stimulates the circular economy, the interviewees did not notice a strong relation. However, the following aspects of the Ladder are seen as stimuli for the circular economy:
Many interviewees perceive the relation between the CO2 Performance Ladder and circularity as indirect. The interviewed organisations found that the CO2 Performance Ladder does not hinder the acceleration towards the circular economy. The CO2 Performance Ladder ensures that sustainability remains a continuous priority within organisations and they perveived that it contributes to general improvement of their day to day work. Therefore, interviewees found that the Ladder makes it easier to act upon circularity as part of the general corporate policies on sustainability.
Based on this scientific research, these are the recommendations for the CO2 Performance Ladder to stimulate the circular economy:
The above text summarizes the most important results of the study. The text below describes what SKAO will do to act upon the research results.
For more information on the CO2 Performance Ladder and the circular economy or to share news and practices in which your organisation showcases both CO2 reduction as well as circularity, please contact us at: firstname.lastname@example.org
Gillian Phair has conducted the research for SKAO and as a result of her work for SKAO, she is now working for Leafteasers. The research report ‘Analysing the stimulation of the circular economy from the CO2 Performance Ladder’ can be downloaded here.