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Companies Turn to Circularity, Waste Reduction as Raw Materials Scarcity Increases

Investments in circularity are already yielding tangible benefits. Despite concerns about initial investments, businesses anticipate long-term gains in process efficiency and cost control.

Waste360 Staff

February 1, 2024

2 Min Read
NicoElNino / Alamy Stock Photo

In a recent report titled "Circularity: No Time to Waste," ABB Motion discloses that 91 percent of industrial enterprises are grappling with the repercussions of resource scarcity.

Two-thirds of these businesses are gearing up to escalate their investments in circularity initiatives over the next three years.

"The pressing need to transition to a circular economy has never been clearer," Tarak Mehta, president of ABB Motion, said. "Our current way of life is depleting resources at an unsustainable rate, contributing to emissions and climate change. Embracing circularity is not only essential for safeguarding our environment but also for enhancing business resilience."

The report, based on a global survey conducted by Sapio Research in October 2023, collected insights from 3,304 decision-makers in industries spanning energy, metals, chemicals, oil and gas, marine, mining, and utilities across 12 countries including the US, China, India, UK, Sweden, Germany, and France.

According to the findings, raw materials 37 percent are the scarcest resource, closely trailed by energy (34 percent), labor (32 percent), and electronic components (26 percent).

This scarcity has led to elevated costs for 37 percent of businesses, supply chain disruptions for 27 percent, and production capacity slowdowns for 25 percent.

Although energy is identified as the scarcest resource, 40 percent consider it their primary source of waste, underscoring the critical need for enhanced energy efficiency in the industrial sector to meet Net Zero targets, as emphasized by the International Energy Agency (IEA).

Despite a positive outlook on circularity investments, the survey outlines key hurdles to immediate progress. A lack of consensus on the definition of "circularity" and only 8% viewing it as a company-wide responsibility are identified challenges. However, the latter group demonstrated the most significant improvements across vital circularity metrics, including energy consumption, use of recycled materials, and carbon emissions.

The survey reveals that crucial circular practices remain underutilized. More than half, or 67 percent, of businesses are incorporating recycled materials in their products to some extent; Only a minority of businesses are engaging in partnerships with waste management companies 41 percent, integrating energy-efficient technologies 37 percent and promoting circular principles in their supply chain (32 percent).

Investments in circularity are already yielding tangible benefits. Despite concerns about initial investments, businesses anticipate long-term gains in process efficiency and cost control.

The majority of respondents, or 78 percent, believe that the circular economy fosters innovation and enhances competitiveness. In addition, there is support for increased regulations and reporting requirements (74 percent), as well as a desire for greater government support in adopting circular business practices (77 percent).

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