WED Special: Circular Economy is a necessity, says Neelanjan Banerjee

On the eve of World Environment Day (WED), Neelanjan Banerjee, VC and MD, LANXESS India, says circular economy demands new solutions from many players, and openness to technology and creativity are required from all decision-makers.
WED Special: Circular Economy is a necessity, says Neelanjan Banerjee
Circular Economy is more than just recycling – for any organization, it means a strategic decision and goes hand in hand with new business models.

There are several benefits of Circular Economy. In many cases, the recycled material costs less than mining and processing primary raw materials which means, industry can retain ownership of scarce resources if it develops its own material cycles. Most important is that, circular management will help reduce carbon dioxide emissions. Considering the industry is now coming under substantial external pressure to act in a climate-friendly way. However, many companies are also self-motivated to bring about a positive change in the traditional processes.

The underlying principle of such models is the offering of services instead of products, such as the sale of flight hours by a jet engine manufacturer, or chemical leasing, where the manufacturer sells use of the chemical and gets the spent chemicals back – as well as responsibility for environmentally sound processing or disposal. 

In the business-to-business sector of the industry, the material flows are relatively clear and the properties of the materials can be guaranteed more effectively, in which end consumers dispose off a whole variety of packaging materials with lots of residue. In addition, there are long-standing supplier relationships in the industry, many of them based on mutual trust, that foster exchange between the players. However, these players have to contend with the problem of missing information on availability and quality certification regarding reuse and processing. 

In the plastics sector, it must be noted that recycling can have side-effects such as the generation or concentration of pollutants. Furthermore, the processes used should be environmentally and economically sound. Chemical recycling, through which hitherto non-recyclable plastics become the starting material for new plastics, is an interesting option, but still a long way off.

Digitalization can play a significant role in the creation and promotion of recycling systems in the industry. It can help solve the big problem of information deficit by providing data on quality, quantity, material flows, and lifecycle of products, and making specific processes for batches verifiable. Sensors and artificial intelligence can help to attain cleaner material flows. New business models can be realized via online marketplaces.

It is important for the industry as well as the government to adopt a systemic standpoint. The current challenges and the opportunities presented by the circular economy, preservation of resources, climate protection, and digitalization are interrelated. Assessing their interaction is just as important as identifying partial solutions, as their true value can often only be examined against the bigger picture. Sustainability has to be established on the strategic agenda in companies and in politics, and they should not be afraid to act boldly.

Circular economy demands new solutions from many players. Openness to technology and creativity are required from all decision-makers.

For example, in chemical recycling, material is broken down into its chemical building blocks. Methods such as pyrolysis (thermal decomposition), hydrogenation (addition of hydrogen to other chemical elements) or depolymerization (breakdown of macromolecules into their constituent parts) are suitable for plastic. These building blocks have the same quality as the original building blocks. Chemical recycling can process waste that is too complex or too contaminated for mechanical recycling. Whether the methods themselves are environmentally efficient must be checked on a case-by-case basis.

Mechanical recycling generally refers to mechanical or physical steps such as sorting, washing, melting, and filtering. After this, the material returns to the material cycle: Plastic bottles can be turned back into bottles. Or beads are turned into noise barriers. This down-cycling is not always desirable. Chemical recycling can help to prevent it. At the same time the concept of Reuse needs to be understood well. It is not only bottles that are reusable. Industrial products such as machines can be leased or bought second-hand as well. 

The use of biotechnology to create a viable Bio-Economy is important. CO2 can be used as a raw material in a host of biotechnological pathways. Micro-organisms are used to absorb CO2 into biomass or convert it into reusable materials. As with the chemical use of CO2, the sustainability of these processes must be examined. In particular, photosynthesis of plants can be used to absorb CO2 into biomass such as algae.

CO2 can also be used as a raw material for plastics, fuels, and construction materials among others. Whether as a combustion product or a process gas, CO2 is a carbon source that industry must use more effectively in order to reduce its dependence on oil. Carbon is the number one element for organic chemistry in particular. Furthermore, in conjunction with energy efficiency measures, CO2 use helps to reduce emissions.

Renewable energies are a key element for sustainable development in general. They are another essential component of the circular economy. In other words, it is often hard for circular processes driven by fossil fuels to fulfill all their sustainability potential. Conversely, it also makes little sense to channel renewable energies into utterly damaging products or processes. In addition, companies are focusing on making their product lifecycle as environmentally friendly as possible.

The transition to a circular economy cannot be the prerogative of a few players or the leading players in the industry. Hence the ‘new-world-order’ to achieve true Circular Economy would be for companies to enter into strategic alliances and devise new solutions with partners, especially in the field of chemical recycling.

About the author:
Neelanjan Banerjee is the Vice Chairman & Managing Director of LANXESS India Private Limited - a part of German specialty chemicals company LANXESS AG. He is currently also responsible for the operations of the business unit Advanced Industrial Intermediates (AII)in India which is the largest among the 10 business units of LANXESS in India. Banerjee is a member of the global management team of the business unit AII and is a standing attendee of all global management meetings in Germany. Banerjee is also a member of the Corporate Social Responsibility (CSR) committee of LANXESS India and plays an active role in all CSR projects undertaken by the organization across the country.

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