Editing IPCC:AR6/WGIII/Chapter-11 (section)

=== 11.3.3 Circular Economy and Industrial Waste ===

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Circular economy (CE) is another effective approach to mitigate industrial GHG emissions and has been widely promoted worldwide since the fourth IPCC assessment report (AR4). From an industrial point of view, CE focuses on closing the loop for materials and energy flows by incorporating policies and strategies for more efficient energy, materials and water consumption, while emitting minimal waste to the environment ( [[#Geng--2013|Geng et al. 2013]] ). Moving away from a linear mode of production (sometimes referred to as an ‘extract-produce-use-discard’ model), CE promotes the design of durable goods that can be easily repaired, with components that can be reused, remanufactured, and recycled ( [[#Wiebe--2019|Wiebe et al. 2019]] ). In particular, since CE promotes reduction, reuse and recycling, a large amount of energy and GHG-intense virgin material processing can be reduced, leading to significant carbon emission reductions. For example, in the case of aluminium, the energy efficiency of primary production is relatively close to best available technology (Figure 11.8), while switching to production using recycled materials requires only about 5% as much energy ( [[#11.4.1.4|Section 11.4.1.4]] ). However, careful evaluation is needed from a lifecycle perspective since some recycling activities may be energy- and emission-intensive, for example, the chemical recycling of plastics ( [[#11.4.1.3|Section 11.4.1.3]] ).

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'''Figure 11.8 | Energy efficiency indicators for basic material production.''' Energy accounting is based on final energy use. Sectoral boundaries for steel are as defined in [[#IEA--2020c|IEA (2020c)]] .Sources: calculated based on [[#UNIDO--2010|UNIDO (2010)]] ; [[#Saygin--2011|Saygin et al. (2011)]] ; [[#Hasanbeigi--2012|Hasanbeigi et al. (2012)]] ; [[#Moya--2013|Moya and Pardo (2013)]] ; [[#Napp--2014|Napp et al. (2014)]] ; [[#WBCSD--2016|WBCSD (2016)]] ; IEA (2017, 2018b); [[#IEA%20and%20WBCSD--2018|IEA and WBCSD (2018)]] ; IEA (2019b, 2020c); [[#Crijns-Graus--2020|Crijns-Graus et al. (2020)]] ; [[#IEA--2020b|IEA (2020b)]] ; [[#International%20Aluminium%20Institute--2020|International Aluminium Institute (2020)]] .

As one systemic approach, CE can be seen as conducted at different levels, namely, at the micro level (within a single company, such as process integration and cleaner production), meso level (between three or more companies, such as industrial symbiosis or eco‐industrial parks) and macro level (cross‐sectoral cooperation, such as urban symbiosis or a regional eco‐industrial network). Each level requires different tools and policies, such as CE-oriented incentive and tax policies (macro level), and eco-design regulations (micro level). This section is focused on industry and a broader discussion of the CE concept is found in Box 12.2 and [[IPCC:Wg3:Chapter:Chapter-5#5.3.4.2|Section 5.3.4.2]] .

'''Micro level:''' More firms have begun to implement the concept of CE, particularly multi-national companies, since they believe that multiple benefits can be obtained from CE efforts, and it has become common across sectors ( [[#D’Amato--2019|D’Amato et al. 2019]] ). Typical CE tools and policies at this level include cleaner production, eco-design, environmental labelling, process synthesis, and green procurement. For instance, leading chemical companies are incorporating CE into their industrial practices, for example, through the design of more recyclable plastics, a differentiated and market-driven portfolio of resins, films and adhesives that deliver a total package that is more sustainable, cost-efficient and capable of meeting new packaging and plastics preferences. Problematically, at the same time the plastics industry is improving recyclability, it has, for example, been expanding into markets without recycling capacity ( [[#Mah--2021|Mah 2021]] ). Similarly, automakers are pursuing strategies to increase the portion of new vehicles that are fully recyclable when they reach the end of life, with increasing ambitions for using recycled material, largely motivated by end-of-life vehicle regulations. This will require networks that are available to collect and sort all the materials in vehicles, and policy incentives to do it ( [[#Wiebe--2019|Wiebe et al. 2019]] ; [[#Soo--2021|Soo et al. 2021]] ).

'''Meso level:''' Industrial parks first appeared in Manchester, UK, at the end of the 19th century and they have been implemented in industrialised countries for maximising energy and material efficiency, which also has merit for CO 2 -emissions reduction, as stated in AR5. Industrial parks reduce the cost of infrastructure and utilities by concentrating industrial activities in planned areas, and are typically founded around large, long-term anchor companies. Complementary industries and services provided by industrial parks can entail diversified effects on the surrounding region and stimulate regional development ( [[#Huang--2019a|Huang et al. 2019a]] ). This is crucial for small and medium enterprises (SMEs) because they often lack access to information and funds for sophisticated technologies.

Typical CE tools and policies at this level include sustainable supply chains and industrial symbiosis. A common platform for sharing information and enhancing communication among industrial stakeholders through the application of information and telecommunication technologies is helpful for facilitating the creation of industrial symbiosis. The main benefit of industrial symbiosis is the overall reduction of both virgin materials and final wastes, as well as reduced/avoided transportation costs from by-product exchanges among tenant companies, which can specifically help small- and medium-sized enterprises to improve their growth and competitiveness. From a climate perspective, this indicates significant industrial emission mitigation since the extraction, processing of virgin materials and the final disposal of industrial wastes are more energy intensive. Also, careful site selection of such parks can facilitate the use of renewable energy. Due to these advantages, eco-industrial parks have been actively promoted, especially in East Asian countries, such as China, Japan and the Republic of Korea (South Korea), where national indicators and governance exist ( [[#Geng--2019|Geng et al. 2019]] ). For instance, the successful implementation of industrial symbiosis at Dalian Economic and Technological Development Zone has achieved significant co-benefits, including GHG-emission reduction, economic and social benefits, and improved ecosystem functions ( [[#Liu--2018|Liu et al. 2018]] ). Another case at Ulsan industrial park, South Korea, estimated that 60,522 tonnes of CO 2 were avoided annually through industrial symbiosis between two companies ( [[#Kim--2018b|Kim et al. 2018b]] ). The case of China shows the great potential of implementing these measures, estimating 111 million tonnes of CO 2 equivalent will be reduced in 213 national-level industrial parks in 2030 compared with 2015 ( [[#Guo--2018|Guo et al. 2018]] ). As such, South Korea’s national eco-industrial park project has reduced over 4.7 million tonnes of CO 2 equivalent through their industrial symbiosis efforts ( [[#Park--2019|Park et al. 2019]] ). Meso-level CE solutions have been identified as essential for industrial decarbonisation ( [[#11.4.3|Section 11.4.3]] ). Moreover, waste prevention as the top of the so-called ‘waste hierarchy’ can be promoted on the meso level for specific materials or product systems. For instance, the European Environment Agency published a report on plastic waste prevention approaches in all 28 EU-member states ( [[#Wilts--2019|Wilts and Bakas 2019]] ). However, challenges exist for industrial symbiosis activities, such as inter-firm contractual uncertainties, the lack of synergy infrastructure, and the regulations that hamper reuse and recycling. Therefore, necessary legal reforms are needed to address these implementation barriers.

'''Macro level:''' The macro level uses both micro- and meso-level tools within a broader policy strategy, addressing the specific challenge of CE as a cross-cutting policy ( [[#Wilts--2016|Wilts et al. 2016]] ). More synergy opportunities exist beyond the boundary of one industrial park. This indicates the necessity of scaling up industrial symbiosis to urban symbiosis. Urban symbiosis is defined as the use of by-products (waste) from cities as alternative raw materials for energy sources for industrial operations ( [[#Sun--2017|Sun et al. 2017]] ). It is based on synergistic opportunity arising from geographic proximity through the transfer of physical sources (waste materials) for environmental and economic benefits. Japan is the first country to promote urban symbiosis. For instance, the Kawasaki urban symbiosis efforts can save over 114,000 tonnes of CO 2 emissions annually ( [[#Ohnishi--2017|Ohnishi et al. 2017]] ). Another simulation study indicates that Shanghai (the largest Chinese city) has the potential to save up to 16.8 MtCO 2 through recycling all the available wastes ( [[#Dong--2018|Dong et al. 2018]] ). As such, the simulation of urban-energy-symbiosis networks in Ulsan, South Korea, indicates that 243,396 tCO 2 –1 yr –1 emission and USD48 million yr –1 fuel cost can be saved ( [[#Kim--2018a|Kim et al. 2018a]] ). Moreover, [[#Wiebe--2019|Wiebe et al. (2019)]] estimate that the adoption of the CE can lead to a significantly lower global material extraction compared to a baseline. Their global results range from a decrease of about 27% in metal extraction to 8% in fossil fuel extraction and use, 8% in forestry products, and about 7% in non-metallic minerals, indicating significant climate change benefits. A macro-perspective calculation on the circulation of iron in Japan’s future society shows that CO 2 emissions from the steel sector can be reduced by 56% as per the following assumptions: the amount recovered from social stock is the same as the amount of inflow, and all scrap was used domestically, and the export of steel products is halved ( [[#LCS--2018|LCS 2018]] ). A key challenge is to go beyond ensuring proper waste management to setting metrics, targets and incentives to preserve the incorporated value in specific waste streams. Estimations for Germany have shown that despite recycling rates of 64% for all solid-waste streams, these activities only lead to a resource-use reduction of only 18% ( [[#Steger--2019|Steger et al. 2019]] ). In general, the identification of the most appropriate CE method for different countries requires understanding and information exchange on background conditions, local policies and myriad other factors influencing material flows from the local up to the global level (Tapia Carlos et al. 2019). Also, an information platform should be created at the national level so that all the stakeholders can share their CE technologies and expertise, information (such as materials/energy/water consumption data), and identify the potential synergy opportunities.

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