The Circular Economy Opportunity for Auckland and how business can realise it
Photo: Chris McLennan THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 1 Auckland could liberate up to $ BILLION8.8 in additional economic activity and reduce carbon emissions by 2,700 ktCO2e in 2030
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 2 Executive summary
Auckland could liberate up to These are the results of a new study carried out by A circular economy de-couples resource use 1 $8.8 billion in additional economic Sapere Research Group working with the Sustainable from economic growth. Lifecycles of materials are Business Network (SBN), in partnership with Auckland maximised, usage optimised and at the end of life all activity and reduce carbon Tourism, Events and Economic Development. materials are reutilised. It is restorative by design and emissions by 2,700 ktCO e in 2030 The work was supported by Fuji Xerox NZ, Inzide underpinned by the use of renewable energy. 2 Commercial, Junk Run, 3R Group and the Ministry for A circular economy goes beyond an improvement by shifting from the current linear the Environment. to the dominant linear economy. It is a viable take, make and waste model to a Modelling analysis across Auckland’s economy replacement for it. Shifting to it would generate huge circular economy. has identified the potential contribution to the city’s economic, environmental and societal benefits. Gross Domestic Product as between $6.3 - $8.8 billion Applying circular economy thinking to Auckland will by 2030. install environmental and economic resilience into the The analysis focuses on food, transport and the built city. It will trigger a new era of business innovation. environment. These three sectors have a significant At the same time it will radically reduce the costs of our input into Auckland’s economy. They have also been economic activity and the material inputs it requires. identified by SBN’s work in New Zealand and research overseas to be the sectors best positioned to make the transition to the circular economy. These sectors tend to include high waste, high cost and heavily polluting activities in the current linear economy model. The carbon reduction opportunity across them
is identified as 2700 ktCO2e in 2030.
1 A circular economy for Auckland - scoping the potential economic benefits, Sapere Research Group, April 2018
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 3 New business models like the shared economy, This report spells out the benefits of taking the lead, For these opportunities to be realised, we must think ‘business as a service’ and renewable technologies and how business can start to do that, by: and work differently across the entire value chain. We are already with us. The challenge now is to follow must adopt new business models. It will not be easy, • connecting entire processes within our economic the world-leading countries and cities reshaping but it is necessary. system through innovation their economic operating systems to prepare them The trajectory is clear and momentum is building, now for where these models are taking us. Because the • establishing procurement processes that favour is the time for Auckland businesses to ‘go circular’. circular economy is inevitable. It is the only viable products and services with a circular economy model with which we can successfully meet the approach needs of a growing population on a planet within our • actively working with non-government planetary boundaries. organisations, government ministries and others to In New Zealand we have the added opportunity to promote the circular economy align and refine circular economy thinking through • targeting investment to accelerate the transition to cooperation and collaboration with the business a circular economy models and worldview of the country’s indigenous people. Doing so successfully would lead to the • sharing and supporting training in the circular development of a holistic economic mindset economy that would also assist to dissolve current cultural • working to inform and influence the government boundaries. policies required to enable the transition
Photo credit: Todd Eyre Photography Ltd
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 4 Contents
Executive summary 3 SECTION TWO A sector focus 31
Foreword 6 Auckland – becoming Food 32 a circular city 16 About this report 7 Opportunities for business 34 What’s already happening 18 Key actions Introduction 8 to catalyse change 35 The benefits – boosting the economy while cutting carbon emissions 24 Transport and Logistics 36 SECTION ONE Opportunities for business 38 Six key levers 25 The circular economy 9 Key actions to catalyse change 40 What’s in it for business? 12 How to make it happen – the enabling factors 26 Circularity at work 14 Construction 41 Think and operate in systems 26 Opportunities for business 42 Closing time for Reset procurement 27 business as usual 15 Key actions to catalyse change 44 Make circularity desirable 28
Fund the transition 29 Conclusion 45 Share knowledge and Acknowledgements 46 develop skills capability 29 Use data 30 Set the rules to enable the transition 30
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 5 Foreword
The way we do business worldwide One of the ways this can be done is by transitioning Globally, countries such as Sweden, Scotland and is putting enormous stress on the Auckland to a circular economy: an economy which Japan are leading the charge on shifting to a circular seeks to de-couple resource use from economic economy, the principles of which are being embraced environmental and societal systems growth, keep resources in use for as long as possible, by some of the world’s biggest brands as well as the upon which our markets and extract the maximum value from them, then recover many local organisations referenced in this report. and regenerate products and materials at the end of Auckland, Tourism, Events and Economic companies are entirely dependent. their use. Development (ATEED) is delighted to partner with SBN From an economic development perspective, to develop an economic insights paper based on this Every year developed economies use between the circular economy represents new business comprehensive report. three and four times the amount of resources that opportunities in growing global markets including are sustainable for the long term. If left unchecked, Circular Economy: A new dynamic for Auckland new business models in transport, waste to value the environmental damage being done to our planet Businesses provides economic perspectives on a opportunities in the food sector and the re-use of threatens to disrupt our global markets and economies. circular economy. construction materials. This report, entitled ‘The Circular Opportunity for Auckland with its innovative, entrepreneurial business The World Economic Forum states that the circular Auckland and how business can realise it’, by the culture has the opportunity to position itself as a economy’s potential for innovation, job creation Sustainable Business Network (SBN) with economic circular economy city for the world. A co-ordinated and economic development is huge with estimates analysis by Sapere Research Group, is the first approach is paramount, with central and local indicating a trillion-dollar opportunity on a world scale. quantification of the potential business benefits of government, communities, businesses and individuals Auckland moving to a circular economy. The new economic analysis outlined in this SBN report working closely to spearhead the impetus for this indicates Auckland could benefit from up to $8.8 essential change. The report looks at the financial and carbon reduction billion worth of additional economic activity a year by benefits Auckland could gain from shifting from the making the shift from the current linear take, make, current linear economy to a circular economy. waste model to a circular economy. Patrick McVeigh, General Manager, Sustainable development is a priority for all Business, Innovation and Skills – For Auckland businesses, pursuing process and product communities, cities and countries. For Auckland, and Auckland Tourism, Events & innovations that reflect circularity will create new forms New Zealand, there is a very real need for all residents Economic Development (ATEED) of value, open up new markets and support sustainable and businesses to make a contribution to becoming a growth by reducing reliance on finite resources. lower carbon economy.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 6 About this report
This report provides an indication It is based on economic modelling by Sapere The report was developed by the Circular Economy of the potential economic and Research Group. It represents the first such analysis in Accelerator, a new team of business innovation a New Zealand context. experts created by SBN. The Circular Economy carbon reduction benefits Accelerator’s aim is to collaborate with New Zealand The report expands on the Sustainable Business businesses, government and other groups to hasten Auckland can realise from Network (SBN)’s previous research into the key the installation of a circular economy in New Zealand. focus areas for enabling the transition to a circular embracing the transition to a To find out more go to circulareconomy.org.nz economy.2 Facilitated workshops and interviews with circular economy. key stakeholders across sectors have been conducted to build on that knowledge and apply it to Auckland.
2 A systems innovation understanding of the current ongoing programme of work status of the Circular Economy in commencing in 2014 involving NZ and the key leverage points multiple stakeholder interviews, and opportunities to accelerate surveys, workshops, events the transition to a more crcular and projects to provide a deep economy.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 7 Introduction
In many ways the worldwide Every year developed economies use between The associated increase in greenhouse gases opportunities for New Zealand three and four times the amount of resources that are generated from industry, agriculture and transport sustainable in the long term.3 If things don’t change, is adversely impacting our climate, health and business have never been greater. we may find ourselves spending more time and effort biosecurity.6 This is pushing costs up across the entire fighting over the remaining resources than putting economy. It is also driving increased regulation and The global population continues them to good use. restrictions on businesses’ licence to operate. to grow. Populations of emerging The way we use resources is incredibly wasteful. Left unchecked, the environmental damage being They are often used only briefly and then discarded. done to our planet threatens to disrupt our global nations are increasingly 1.3 billion tonnes of waste is generated worldwide markets and economies. every year. This is expected to increase to 2.2 billion procuring the goods and services Our current economic model needs a fundamental tonnes per year by 2025.4 Just the financial and redesign. of prosperity. But the current environmental costs of disposal are putting a brake extractive economic model this is on progress. We waste time and money dealing with waste. And by 2050 there could be more plastic by based on has become the major weight in the ocean than fish.5 barrier to further progress. It is putting enormous stress on the environmental and social systems upon which our markets and businesses are entirely dependent.
3 Press Release from Global 5 The New Plastics Economy: Footprint Network, 2014 Rethinking the future of 4 World Bank Urban plastics, Ellen MacArthur Development Series Report, Foundation, 2016 Chapter 3 “Waste Generation” 6 Why climate change matters, Ministry for the Environment
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 8 Section One The circular economy At last, a compelling, prosperous, business model for a low carbon future
A circular economy de-couples resource use from economic growth. Lifecycles of materials are maximised, usage optimised and at the end of life all materials are reutilised. It is restorative by design and underpinned by the use of renewable energy. A circular economy goes beyond an improvement to the dominant linear (‘take-make-waste’) economy. It is a sustainable and viable alternative to it. It represents a system shift to a new global operating system, one that will generate sustainable economic, environmental and societal benefits.
SUSTAINABLEPhoto credit: BUSINESS Chris McLennan NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 9 The ‘butterfly diagram’ Figure 1: Outline of material flows in a circular economy (right) is from the Ellen Photo credit:Ellen MacArthur Foundation MacArthur Foundation, the leading global circular economy advocacy organisation. The graphic illustrates how materials flow through a circular system.
Resource value is maximised across the value chain and leakages in the system are minimised via feedback loops. Technical materials (e.g. manufactured products) are kept separate from biological materials (e.g. food) with the aim of keeping technical materials in continuous high value circulation and out of the biosphere, while biological materials can be used to regenerate nature (e.g. return to soil as compost).
Technical materials are fed back into the system through maintenance, reuse, remanufacture and recycling (which tends to be the lowest value option).
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 10
The circular economy has been estimated to represent a USD$4.5 trillion economic opportunity by 2030.7 It:
• provides an innovation platform for • improves resilience by lessening new services and business models the exposure to interruption and price shocks for virgin materials from • reduces costs by reducing the need overseas supply chains for material inputs into the system • improves environmental outcomes, • optimises the use of assets via sharing including reducing carbon emissions, economy platforms pollution and waste • increases the lifecycles of products via • restores natural capital such as soil repair and remanufacturing services and water quality • develops and expands waste to value • drives better societal outcomes, such opportunities as generating new local employment
Crucially, it does all this and more within a coherent, comprehensive system design framework. This is the only way to ensure these processes are both self-sustaining and interlinked into an all-encompassing approach.
7 The Circular Economy Could Unlock $4.5 trillion of Economic Growth, Accenture Strategy, September 2015
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 11 What’s in it for business?
Circular economy thinking is Airbnb, Bookabach and Yourdrive are all examples of printing process that uses recycled plastic bottles. already enabling some of the the sharing economy, which forms part of the overall Its aim is to reduce waste and 3D printing material circular economy. Airbnb has become the world’s costs to help accelerate community-based digital biggest business success stories, largest accommodation provider,8 without owning any manufacturing. It is currently in the process of setting both here and abroad. property, by enabling underused private spare rooms up and running a pilot project. and houses to be rented out. Bookabach and Yourdrive Air New Zealand has been working with AUT to use the same model for holiday homes and cars. create 3D printed parts for aircraft interiors, providing eBay and Trade Me enable the extension of product significant cost savings.9 lifecycles by facilitating the sale of second hand goods The Internet of Things enables automatic and remote on a mass scale. monitoring of the efficiency of a resource during Circular economy thinking can also drive the use production, use and at the end of its use cycle. This of emerging technologies like 3D printing, which means that all parts of the value chain can become provides an opportunity for distributed, small scale more efficient. Once the time comes for a user to and on-demand manufacturing. For example, discard a product or asset, this can aid in the asset Photo credit: Yourdrive Auckland-based Reforge NZ is developing a new 3D retrieval, so components can be reused.
8 Facebook, Airbnb, Uber, and 9 Air New Zealand to 3D print the unstoppable rise of the its own aircraft interior parts, content non-generators, Press Release, February 2016 Independent, 2015
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 12 Photo credit: Alsco
• New value can be generated from • Products that have been designed at the "For IKEA, becoming circular is a huge material previously seen as waste. outset to have longer lifecycles provide a opportunity to innovate and find new ways to lever with which to disrupt existing markets. • Repair and remanufacturing services have meet people’s needs and dreams at home within the potential to generate increased revenue • Optimised resource use can be facilitated the limits of the planet. By truly understanding as goods are kept in service by organisations retaining ownership of people’s needs, we can design relevant offers for longer. products and selling their use as a service. and meet customers’ needs in new ways. We are just at the beginning, but are starting to test a range of solutions, including exploring
new business models" 10 Engaging Customers in Shaping a Circular Society Håkan Nordkvist, Håkan Nordkvist, Head of 10 Head of Sustainability Innovation, IKEA Group Sustainability Innovation, IKEA Group.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 13 “Once we sell Circularity at work the benefits of the products instead of the products themselves, we begin to design for longevity, LanzaTech, originating from Auckland, is developing The Module Project is an emerging Auckland based Toast Ale in multiple reuse, and eventual gas fermentation technology for industrial waste company looking to disrupt the electronic goods the UK makes gases. The sources include steel and alloy mills, sector. It is developing a wireless speaker, Decibel, brewing beer recycling” municipal solid waste, organic industrial waste and designed to last a lifetime. All components are user from surplus Frans van Houten, Chief Executive agricultural waste. The technology creates high-value upgradeable. bread. Officer and Chairman, 11 chemicals and gases. It has generated more than Royal Philips Adidas is one of the $200m in investment to date. countless companies Wishbone Design Studio uses recycled residential making products out of ocean carpet for its Recycled Edition children’s bikes. plastic waste. Innovations like this have fuelled growth of 25% Caterpillar has established Cat Reman that annually and distribution in more than 40 countries. recovers materials through technology and restores Wishbone Bikes is also disrupting the global toy components to good-as-new condition. market’s ‘throw away’ culture by incorporating aspects like repairability and adaptability, where the bikes are Patagonia encourages customer repairs via its ‘Worn adjustable to match the growth of a child. Wear’ initiative, driving customer loyalty.
provides a fully managed rental service for leases jeans for a monthly fee. After the Alsco Photo source: themoduleproject. MUD Jeans uniforms and repairs, reconditions and reuses them to lease period of one year, customers can switch them maximise their lifecycle. for another pair and continue leasing, return them for Oh Rent Me is an Auckland based company that recycling or upcycling purposes, or keep them. The CHEP manufactures pallets, crates, and containers for allows you to rent designer clothing. lease contract includes free unlimited repair services. businesses and rents them out through its pallet and Yourdrive is enabling spare capacity in the car market container pooling service. to be accessed through private rental, generating Green Spot Technologies is developing flour from revenue for the car owner and the company. apple waste. offers a ‘pay per lux’ lighting service Philips Lighting 11 Why we need a circular Auckland Drum Sustainability Services provides where customers pay for the amount of light (lux) economy, blog by Frans van a national collection, remanufacturing and reuse they need and Philips retains control over the items it Houten, Chief Executive Officer of Philips, published by programme for bulk packaging drums. It collects and produces, enabling better maintenance, reconditioning the World Economic Forum, supplies reconditioned and remanufactured drums. and recovery. January 2014
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 14 Closing time for business as usual
Successful business relies on responding early to emerging trends and needs.
New Zealand is relatively small and remote. If New Zealand businesses do not keep pace with the growing global movement towards a circular economy they will simply be left behind. This is likely to be experienced as increasing costs in raw materials, reduced demand from increasingly conscious consumers, and increased barriers to entry for overseas markets.
Knowing this, it is likely that the New Zealand government, like those around the world, will be compelled to make increasing aspects of the circular economy compulsory.
Businesses that act early on this will gain significant advantage.
Photo credit: Todd Eyre
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 15 Section Two Auckland – becoming a circular city
More than one half of the world’s people now live in cities. This is predicted to be 70% by 2050.12 This means cities and the businesses that fuel their growth will be at the heart of the required economic redesign.
Photo credit: Chris McLennan
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 16 A circular city embeds the Auckland, like many leading cities across the world, principles of a circular is at the beginning of its journey towards circularity. The opportunities of a unique The circular economy is the best methodology we Māori (holistic) perspective economy across all its functions. have to secure economic prosperity that can keep It establishes an urban system pace with population growth while operating within Māori have an important and unique world view our planetary boundaries. (te ao Māori) in driving circular thinking and action in that is regenerative and New Zealand. Co-ordinated circular economy action at a restorative by design. The idea Māori have a holistic understanding of our city level is still in its infancy. But Auckland is environment, and see the environment as an of waste is eliminated. Assets well placed to take a lead. It has a well-proven interconnected whole. are kept at their highest levels innovative, entrepreneurial business culture and a highly connected community, including a vibrant Māori express their connection with the environment of utility at all times. Digital and dynamic indigenous culture. We can learn through Kaitiakitanga (environmental guardianship) technologies support processes much from the indigenous notion of stewardship – a way of managing the environment. The Māori (kaitiakitanga) and intergenerational thinking, which world view and Māori values, including tikanga where appropriate. has strong links with restoring systems. (customary practice), whakapapa, manaakitanga (acts of giving and caring for) and kaitiakitanga, Auckland can achieve the benefits outlined in this A circular city generates prosperity and economic as well as their intergenerational approach are all report. It can go further, establishing itself as a resilience while separating value creation from the congruent with Circular Economy thinking. model circular economy city. consumption of finite resources.13 The 21st century Harnessing this thinking and the unique and strong circular economy city is likely to become a global To do this we must embark on an unprecedented indigenous culture we have in NZ will help drive growth model, and a key target market for all kinds level of co-operation and co-ordination, not only New Zealand’s transition towards a circular economy. of goods and services. across business but communities, and central and local government. It is too early to cite cities that have gone entirely circular. But there are a number of cities that are in Auckland generated 1.646 million tonnes of transition. Amsterdam, Helsinki, Vancouver, London domestic and commercial waste in 2016. That’s and Glasgow have all identified opportunities for a more than one tonne for every Aucklander.14 This is move towards a circular economy. likely to increase unless a new approach is taken. 12 Circular Economy in Cities: 13 Cities in the Circular Economy: An Estimates suggest we’ll add 833,000 more people Evolving the model for a Initial Exploration, Ellen MacArthur to Auckland in the coming decades, putting our sustainable urban future, World Foundation, 2017 14 population at 2.3 million by 2043. Economic Forum, 2018 Draft Auckland Council Waste and . Minimisation Plan 2018
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 17 There are many great examples of organisations What’s already already using circular economy thinking and happening ways of operating in New Zealand. There are also examples of established businesses that have adopted inherently circular models from the outset.
Product as a service
CHEP
What they do:
CHEP is a global provider of supply chain products and services for the consumer goods, fresh food, beverage, manufacturing and retail sectors. CHEP’s pooling business model incorporates elements of both the circular and sharing economies. CHEP retains full ownership of equipment. It has been CEMARS certified since 2014. 100% of its timber is supplied from certified sources.
Benefits of a circular approach:
Each time CHEP’s customers choose sharable and reusable options instead of one way packaging, carbon emissions are reduced, waste is avoided and raw materials are saved. See diagram for worldwide savings.
Image credit: CHEP
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 18 [Inzide / Interface carpet tiles, Fuji Xerox, Resene Paints, Envirocon, ADHB Maximising value and lifecycles via product stewardship
Inzide Commercial/ At the end of their usable life, tiles are Envirocon work and transport the waste to sent back to the manufacturing plant, Envirocon, which transforms the waste Interface Carpet Tiles What they do: stripped and remanufactured into new cement into cement ready to use again What they do: carpet tiles. Envirocon is a voluntary product in Interbloc’s modular wall system. stewardship scheme that involves Inzide Commercial supplies In New Zealand this happens via the Benefits of a circular approach: Auckland’s local cement organisations sustainable flooring solutions for Ministry for the Environment accredited and the construction company • The programme aims to divert commercial interiors. Interface Interface ReEntry Programme product Interbloc. 80,000 tonnes of waste concrete carpet tiles incorporate multiple stewardship scheme. and wastewater per year by 2022. circular economy attributes. Designs Envirocon provides a facility for waste Benefits of a circular approach: influenced by the randomness of concrete to be brought to Interbloc • It reduces truck movements by an nature allow for easy installation and • Ease of installation and which uses the waste to build cement estimated 1.4 million km per annum. replacement of individual tiles. The replacement of individual tiles. walls. Cement companies finish the TacTiles technology eliminates the • The ReEntry programme has need for glue to connect the tiles to diverted more than 44,000 cubic the floor. Auckland District Benefits of a circular approach: metres of carpet tiles from landfill (220 tonnes). Health Board • The hospital initiative has resulted What they do: in approximately 9,000 kg of plastic waste diverted from landfill. The Auckland District Health Board is taking a leading role in reducing • Approximately 2,300 kg of medical waste and redirecting non- recyclable plastics and cardboard hazardous plastic waste, aluminium and material is recycled every month as metal waste from landfill to recycling. part of a recycling programme for home patients in partnership with The DHB initially started recycling Baxter Healthcare. plastic tubing, oxygen masks and IV bags. The plastic collected is recycled • The waste recycled as part of in New Zealand to create playground the home patient programme is outdoor matting. This is exported equivalent to about 300 cubic metres Photo Credit: INZIDE Commercial around the world. (uncompacted) of landfill per year.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 19 Fuji Xerox Benefits of a circular approach: Resene What they do: • Fuji Xerox NZ’s MfE accredited Product What they do: Stewardship scheme diverts on average 700 Fuji Xerox New Zealand promotes the reuse and tonnes of waste from landfill annually. The Resene PaintWise programme allows recycling of its products through its Ministry for customers to return paint cans, regardless Environment (MfE) accredited Product Stewardship Its products are designed for easy separation and of whether they are empty or half full, to Scheme. This scheme is a free take-back service disassembly, ensuring where possible machines be recycled. The paint is then donated to offered to all of its customers for machines, used and parts get a second chance at life as refurbished community groups who use the paint to cover parts and consumables, ensuring they are reused and eco machines. graffiti. Paint that cannot be donated is sent to responsibly recycled rather than sent to landfill. • By partnering with Close the Loop, Fuji Xerox NZ's solvent recovery so the ingredients can be used Thanks to the scheme Fuji Xerox NZ has achieved a toner is also given a second life in a product called in other industries. re-use and recycling rate of over 99.5% for returned TonerPave™. Resene has created PaintCrete which uses the equipment, which, when part of a lifecycle recycling TonerPave is a low carbon asphalt that is more recycled paint ingredients in concrete which in programme, helps reduce the carbon footprint of a durable than standard asphalt and helps to reduce turn improves concrete quality. road by up to 23%. the carbon footprint of a road by up to 23% over its Benefits of a circular approach: lifecycle. • Resene has helped recycle 120,000kg of steel and repurpose 140,000 litres of partially used paint since the launch of its PaintWise programme in 2004. • Over 300,000 packs have been collected from Resene ColorShops over the past 14 years.
Photo credit: 3R Group
Image credit: Fuji Xerox NZ
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 20 Sharing economy
Yourdrive The Compost Collective Cityhop What they do: What they do: What they do: Yourdrive is a NZ based peer-to-peer car sharing Cityhop is a car sharing service that allows members The Compost Collective is a collaborative platform that enables people to rent privately owned to rent cars by the hour. Membership offers project aimed at increasing the number of cars. Owners generate income from sharing their businesses an alternative option to purchasing a pool Auckland households engaged in composting idle asset and renters gain access to a wide range car. Packages include the call centre, insurance, petrol, and organic waste reduction. The Collective of better value rental vehicles in dispersed locations. on-road costs, fleet team and staff benefits. This saves operates ShareWaste.org.nz, an online Over the last three years, Yourdrive has facilitated companies transport and parking costs, creating platform to connect people who wish more than 4,000 journeys and currently has over 600 efficiencies and eliminating administrative work. to recycle their kitchen scraps with their vehicles listed on the platform. neighbours who are already composting, Benefits of a circular approach: Benefits of a circular approach: worm-farming or keeping chickens. • Reduced car ownership - 59% of Cityhop members In addition, they run composting workshops • Supporting the local economy. Since 2015, Yourdrive have sold a car or delayed the purchase of their throughout the greater Auckland area. has paid out more than half a million dollars to Kiwi next car because of car sharing. Cityhop estimates vehicle owners. Benefits of a circular approach: 1,000 privately-owned vehicles have been removed from the road as a result of the service • Reducing car ownership. A survey of Yourdrive • 14,969 people have renters found that 75% had reduced their vehicle been involved in the • Reduced parking and street ownership after using Yourdrive. collective to date. congestion • Increasing use of other sustainable transport modes. • Reduced carbon emissions The same survey found that 68% of respondents • Cityhop estimates it provides increased their use of active-transport modes such $5,000,000 back to Auckland as walking and cycling after using Yourdrive. annually through the benefits of its car-sharing scheme
Photo credit: Cityhop
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 21 Resource recovery / Waste to value
EcoStock Supplies Junk Run Critical Design NZ Offcut
What they do: What they do: What they do: What they do:
EcoStock Supplies collects food Junk Run sends junk to a better place. Critical Design is a community- Offcut produces hats made from waste from food manufacturers, Whether commercial, construction or based organisation in Mount Roskill, off-cuts of fabric from a clothing food distributors and food residential inorganic waste, it all goes Auckland, constructing high-value manufacturer. This fabric would retailers. The company transforms through the Junk Run collection and furniture out of local waste. It provides traditionally be disposed to landfill. it into high quality sustainable recycle/redistribution system. This low-income students with resources With every hat purchased, Offcut animal feed. Most of this food is results in 70% of all waste collected and instruction on how to design plants a tree via one of its partner in multiple layers of packaging. being diverted from landfill. Every and create. The revenue earned is organisations. The company uses manual and job has real time data collection distributed among its members. Benefits of a circular approach: mechanised means to separate and analysis, enabling the provision Benefits of a circular approach: the packaging and prevent it from of detailed waste reports to help • Reduction of waste to landfill from contaminating the stock feed. companies promote their own • Creating high-value furniture the fabric manufacturing industry. sustainability message and goals. products out of waste. Benefits of a circular approach: • Offcut has produced approximately Benefits of a circular approach: • Diverting recyclables from being 1,500 hats, which equates to about The initiative enables: sent abroad or to landfill. 225kg of fabric diverted from landfill. • 8007 cubic metres of waste diverted • Over 175 New Zealand from landfill in the last 12 months. businesses to divert 30,000 tonnes a year of industrial food • Examples of diversion include waste from landfill. refrigeration panels from an Auckland commercial defit being utilised by a • Over 2,000 tonnes of Waikato mushroom farm and industrial cardboard, plastic, metal and kitchen equipment used as community wood is recycled. Photo credit: facilities. Critical Design
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 22 Helensville Community Resource Rescue Green Gorilla
Recycling Centre What they do: What they do:
What they do: Resource Rescue recovers whiteware from Green Gorilla provides recycling and waste Auckland's Inorganic Recovery Project, either minimisation services, skips and bins, and waste The Helensville Community Recycling Centre is one repairing appliances for reuse, or recovering management solutions for Auckland. The company’s of 12 waste collecting centres that are members of parts to be used in the repair of other focus is to maximise recycling and diversion from Auckland Council’s Resource Recovery Network. appliances. landfill. This helps its customers achieve their own Once sorted, any items that can be reused or sustainability initiatives. upcycled are cleaned and sold at the centre’s shop. Benefits of a circular approach: The centre also hosts sewing nights, where volunteers Green Gorilla’s 2.7ha waste processing facility • 30 tonnes of appliances diverted from landfill use waste fabric to create reusable bags. in Onehunga is dedicated to the recycling and • 870 appliances refurbished/recovered processing of waste material. Initiatives include the Benefits of a circular approach: recycling of waste plasterboard into gypsum for the • •$200,000 generated in revenue • Between July 2017 and February 2018 Helensville agricultural sector, and the chipping of waste timber Community Recycling Centre processed 393,732 into biofuel for Golden Bay Cement as a replacement
kg of waste with 73% diverted from landfill. Photo credit: GreenGorilla for coal. • Approximately 250,000 kg of this waste is recycled Benefits of a circular approach: and 40,000 kg is resold. • The Green Gorilla Waste Processing Facility diverts • Anything that isn’t sold is donated to local charities. approximately 75% of collected construction waste from landfill.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 23 The benefits – Economic analysis indicates the boosting the economy economic potential $ while cutting carbon for Auckland’s transition to a 8.8 emissions circular economy BILLION could be up to an in GDP in 2030. additional
The initial analysis draws on The analysis also indicates that research from overseas and by transitioning to a circular applies it to the Auckland economy. economy the city could reduce This methodology suggests the carbon emissions (embodied and
opportunity ranges from $0.8-$8.8 generated) by around 2,700 ktCO2e billion. Further analysis of specific in 2030 across the food, transport opportunities in Auckland, drawing and the built environment sectors. on local data across just three sectors indicates a range of $6.3 -$8.8 billion benefit to the economy – towards the upper end of the initial estimation.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 24 Six key levers
Previous analysis of the circular economy in New Zealand has been completed by the Sustainable Business Network. This identified six key drivers to overcome the barriers to this transition. They are:
Design for a circular economy existing linear offerings. It is imperative Businesses should invest in co- printing is facilitating local production to rather than retrofit solutions. that increased effort is made to make operating and collaborating with other order, as opposed to mass production longevity, upgrading, repair and reuse a organisations to create the necessary for prospective orders. In addition, It is fundamental that product and preferred choice among buyers. From a infrastructure. 3D printing has the ability to prolong systems design incorporates ‘circular’ business-to-business perspective, ‘end product life cycles with printed spare thinking, and avoids locking in linear Adopt new circular business models. of life’ solutions and a focus on ‘whole of parts. A better understanding of how pathways, from the outset. This means life’ costs as opposed to initial cost need In particular, business models that move organisations can incorporate such that, for example, products need to be to be core parts of procurement policies. the customer away from ownership technology into their businesses is key designed for longevity, incorporating are crucial. In ‘product as a service’ to gaining the scale required to realise the ability to repair, upgrade, reuse As well as actively and creatively business models the manufacturer the benefits. and disassemble so at the end of life promoting the circular economy within retains ownership of the product while precious materials can be harvested their own sectors, businesses should Develop the required enabling policy. in use with the customer. In the sharing and reutilised. support the continuing role for non- economy business model, underutilised Understanding and implementing the government organisations to raise Businesses should look to partner with assets (e.g. cars) are shared, further right policies is crucial to achieving a awareness on issues in the current system thinkers and academic research encouraging customers to rethink the circular economy. The linear economy economic system and promote circular institutions to refine and apply circular need for ‘ownership’. still dominates. Appropriate new rules economy solutions. economy thinking to their sector. will be required to at least level the Harness new technology, including Develop the infrastructure required to playing field and mainstream this Generate demand for circular 3D printing, Internet of Things and support a circular economy. transition. economy solutions. Artificial Intelligence. Even if a product is designed for circular While pioneering organisations are Fast emerging technology is creating economy product stewardship, New gaining early mover advantage, new opportunities to facilitate the shift Zealand’s geographically dispersed and current consumer demand for circular to the circular economy. The internet relatively small population means the solutions is not sufficient to compel has helped to enable the sharing infrastructure for making this possible many organisations to change their economy. The emergence of 3D does not always exist.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 25 How to make Think and operate it happen – the in systems enabling factors
Analysis of the Sustainable A fundamental approach businesses need "Think Business Network’s work to adopt, quickly, is to both think and like a system, to date, together with a operate in ‘systems’, based on an applying act like an workshop and interviews with an understanding of the relationships entrepreneur." stakeholders across Auckland’s between a system’s constituent parts and Rowan Conway, 15 economy, indicate the following the way they work within larger structures. RSA, London thinking and actions are fundamental across sectors We need to redesign how materials flow through A good example of a systems approach in action the city. This can only be done successfully if the is the way Air New Zealand’s catering partner to enable the transition to a whole system is considered. Co-ordination and LSG Sky Chefs and the Ministry for Primary 16 circular economy. collaboration is required. Potential unintended Industries worked together on inflight waste consequences need to be avoided and waste The initiative has enabled 40 Air New Zealand across the system needs to be eliminated, inflight products, that were previously sent to not just moved up or down the value chain. landfill for biosecurity reasons, to be reclassified. A systems approach recognises that no one They can now be reused on future flights if organisation has the power to shift a system, removed from aircraft sealed and untouched. let alone an economy. This approach creates The initiative is expected to be able to reuse 150 the platform and necessity to purposefully tonnes of products a year. collaborate to develop circular solutions.
15 From Design Thinking to 16 Air New Zealand leads the Systems Change: How to way with inflight waste. invest in innovation for Press Release, October social impact, RSA, 2017 2017
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 26 Reset procurement
The way organisations procure It provides the motivation and incentives for suppliers • The quality of the furniture Vero selected during a and manufacturers to design out waste in the product, refurbishment 18 years ago enabled Junk Run to goods and services profoundly or design feedback loops that maximise the value of reallocate 98.4% of it to communities in need rather influences the marketplace. the materials. than landfill when it came to changing it. Sustainable procurement, or smart procurement, • Auckland Council is a procurer of $4 billion worth Procurement criteria need to evolve. They must is the emerging best practice. It reimagines the of goods and services each year. This makes it an enable more circular solutions to be competitive by purpose of procurement as delivering value for the obvious candidate for championing progressive, demonstrating their value. The focus of procurement whole organisation, embedded within society and mature approaches to procurement that progress should be on whole of life costs, rather than just environment. It’s not just about securing goods and us towards a circular economy. initial purchase cost. This would mean solutions with services at minimal cost. It’s about mitigating risks, • Fuji Xerox and Interface products are specifically longer life cycles could compete more effectively with uncovering inefficiencies, contributing to brand and designed for recovery, reuse and, ultimately, to be solutions with less longevity but lower initial costs. messaging, and building collaborations with suppliers recycled at the end of life. to drive innovation. End of life solutions must play a greater role. If the supplier doesn’t provide any end of life solutions, the If properly mandated, procurement teams can customer often bears the cost of disposal. On the contribute to the circular economy in various ways. other hand, putting responsibility for end of life on the They can buy fewer, better and longer lasting supplier puts responsibility where it is most effective. products. They can use services instead of products wherever possible. They can tender and contract on outcomes rather than outputs. They can showcase the organisation’s values through careful choice of suppliers and continuing procurement-led innovations.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 27 Make circularity desirable
Demand for more circular solutions Businesses providing circular solutions should harness Adidas harnessed the global popularity and influence needs to be stimulated. successful communication and marketing techniques of the Real Madrid and Bayern Munich football teams for their circular economy related messages and make to promote its range of sports equipment made from A product may have a long life cycle, circularity desirable. waste plastic in collaboration with Parley. repairability and full supplier- Imagine if the hugely influential Apple brand had Identifying and harnessing the influencers in Auckland provided end-of-life solutions. But embraced circularity as part of its design ethos. It across sport, the arts and media could help make would mean incorporating more modular design circularity desirable. it won’t sell unless its core function elements to facilitate upgrades of elements of an The recently launched ‘Bags Not’ campaign to iPhone, such as the camera, rather than encouraging is at least as good as its linear encourage shoppers not to use plastic bags utilises the replacement of the whole phone (as per the the likes of Dick Frizzell and Jaquie Brown to competitors and its proposition modular Fairphone). The electronic device sector communicate the message. resonates with customers. would have a very different landscape to the one we see now.
Utilising an association with sport is a route that resonates with mass markets. Auckland has recently seen how the Volvo Ocean Race’s visit to Auckland provided a communication platform for the issue of plastic in seas.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 28 Fund the Share knowledge and transition develop skills capability
Investment and funding signals A circular approach is new to many organisations. to business still often favour Couple this with rapid advancements in technology, adherence to the linear economy. and a knowledge and skills gap exists.
We need to level the playing field and access Simple methods of bridging this gap include Innovation and Entrepreneurship. An example targeted investment for circular solutions. platforms for sharing knowledge and case is the Auckland Climathon weekend, involving studies. The Going Circular category of the 2017 Vector.17 Existing ways of doing that include the Waste NZI Sustainable Business Network Awards, Minimisation Fund (national), Waste Levy An open source approach can enable common sponsored by Auckland Council, is an example funds distributed by Auckland Council (Waste knowledge platforms from which businesses of both. In its first year it attracted the highest Minimisation and Innovation Fund), and can innovate. For example, the sharing number of entries of any category in the 15- Callaghan Innovation. In March 2018 the Ministry economy requires new types of insurance year history of the awards. The online platform for the Environment began requesting applicants or leases to accommodate multiple, rather and regular learning and networking events to the Waste Minimisation Fund highlight how than single, users. An open source template of the Circular Economy Accelerator are other their projects accelerate New Zealand towards would mean innovation can occur through examples of ways to bridge the knowledge gap. becoming a circular economy. the user experience, avoiding unnecessary Engaging with programmers will leverage new administration. There is also a major role for impact investing. digital technology. This could take a ‘hackathon’ This where investments are made on the basis Platforms like backofanapkin.co.nz and approach. This is where programmers and other of social and environmental outcomes as well as Simmonds Stewart are used by start-ups and experts tackle specific challenges in limited financial gains. Ensuring this investment sector can provide inspiration for how simple and timescales. This could be facilitated through continues to grow and Auckland entrepreneurs accessible shared templates can be. collaboration with education institutions already can access such investments is crucial. engaging businesses such as Unitec’s Tech Organisations such as Ākina Foundation and the Futures Lab and Auckland University’s Centre for Icehouse have a key role to play in this. 17 Auckland Climathon 2017, Vector, October 2017
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 29 Use data Set the rules to enable the transition
Making data influential and actionable Appropriate national policy can ensure the is central to advancing the circular benefits of a circular economy can be achieved economy in Auckland. sooner rather than later.
Businesses need accurate data around material flows and losses A fundamental fiscal measure that is circular products, would also be very of value to incentivise and enable investment in the circular often first cited by businesses is an influential. The European Commission, economy. How much of a particular material is being wasted, increase in the Waste Levy. An analysis for example, is considering changes when is it happening and what is its value? of the effect of possible changes to the in tax laws to allow lower or zero VAT waste disposal levy last year indicated [GST] rates for products with recycled An open source platform that collects waste data from that increasing the levy from $10 per content. This is intended to boost the organisations would be a starting point for making better tonne to $140 per tonne could deliver demand for recycled materials. collective decisions around waste. This could then be used to up to $500m in net benefits to the help map material flows through the city. A comprehensive analysis across economy each year and create up to sectors to determine priority areas and There are several companies here in NZ exploring the use of the 9,000 jobs.18 the sector specific issues would be Internet of Things, combined with artificial intelligence and/or Banning or severely restricting the most required. Blockchain technology. The Cacophony Project in Akaroa has built troublesome materials, like micro beads a prototype for identifying and killing predators to assist with the or single use plastics, could help to Department of Conservation’s national target to become Pest Free focus innovation on circular economy by 2050. solutions. Compulsory product Litterati is a platform that turns crowd-sourced Instagram photos of stewardship for certain sectors could litter into GPS data points, identifying problem items and locations have a similar effect. 18 A Wasted Opportunity: Using to help influence companies to eliminate them. the waste disposal levy to Other fiscal measures, such as a create economic & change in the GST structure for environmental advantage for Aotearoa, Eunomia, 2017
SUSTAINABLE BUSINESS NETWORK THE CIRCULARTHE ECONOMYCIRCULAR OPPORTUNITY FOR AUCKLAND | 30 A sector focus Three key sectors have been selected for high level analysis based on their significance to Auckland and ripeness for transitioning to a circular economy. 1. Food 2. Transport 3. Construction and logistics
Photo credit: Todd Eyre Photography Ltd
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 31 Food
The Food and Beverage sector constitutes approximately 4% of Auckland’s GDP.19
Food waste in the city represents a significant proportion of the organic waste, representing around 19% of total waste to landfill by weight in 2016 – 137,000 tonnes from domestic waste and 168,000 tonnes from commercial sources. It is the largest contributor to greenhouse gas emissions of all waste materials sent to landfill.20
One third of food produced for human consumption is lost or wasted globally, which amounts to about 1.3 billion tons per year.21
Food is lost or wasted throughout the supply chain, from initial agricultural production down to final household consumption. This represents an inefficient use of land, water, energy and other inputs as well as unnecessarily increasing costs and greenhouse gas emissions.
It presents an enormous opportunity for transitioning to a Photo credit: Todd Eyre circular economy.
19 Overview of Food and 21 Key facts on food loss and Beverage Sector of Auckland, waste you should know! ATEED Food and Agriculture 20Draft Auckland Waste Organization of the Management and United Nations Minimisation Plan, Auckland Council, 2018
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 32 Current status
There are already some • Commercial organic collection services, such • Proactive community-based action is being as the one offered by We Compost and the facilitated by the likes of The Compost Collective. noteworthy waste solutions extension of domestic food waste collections • Biogas from Auckland’s waste water is being by Auckland Council are returning nutrients to happening in Auckland. used to power the Mangere and Rosedale the soil. treatment plants. The plants aim to be electricity Designing out food loss and waste is continually a • Significant proportions of commercial food neutral by 2025.22 constant concern for growers, manufacturers and waste are being processed into animal feed • Green Spot Technologies converts fruit and retailers. But there is limited evidence of co-ordinated by companies like EcoStock, or rendered into vegetable by-products into high value-added collaborative approaches across the value chain to tackle tallow and other products. the systemic barriers to a circular economy in food. food products. • The commercialisation of ‘ugly fruit’ (fresh • Greater amounts of non-sellable edible food This would go beyond cutting waste in one organisation produce still fine to consume but with waste, previously being sent to landfill, are by just passing it up or down the value chain, into a visual defects) is a welcome addition to our being distributed by the burgeoning food rescue circular economy approach to the sector as a whole. supermarket shelves. sector with Kiwi Harvest being the key charity • Reducing post-consumer waste is being organisation in Auckland. Of course the growth addressed by the Love Food Hate Waste of the sector further illustrates the waste issues campaign. within the food system. • Household food waste collection services are being rolled out by Auckland Council.
22 Watercare plans to run treatment plants on biogas, Bernard Orsman, NZ Herald, February 2016
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 33 Opportunities for business
A systemic cross value Anaerobic digestion Photo credit: EcoStock chain approach This is a series of biological processes in which microorganisms break down biodegradable material in Courtauld 2025 is a UK-based voluntary agreement the absence of oxygen. Anaerobic digestion (AD) food to make food and drink production and consumption waste plants have the potential to produce energy more sustainable.23 It is an example of what could through biogas and fertiliser, and to operate at greater be instigated in Auckland. At its heart is a 10-year scale and scope than windrow composting facilities. commitment to identify priorities, develop solutions and implement changes at scale. Such an approach Windrow facilities are long rows of raw organic matter would simultaneously address demand management, turned mechanically and manually. specification, shelf life and customer behaviour. AD plants can process a wider range of food waste like meat, which cannot be composted or used as feedstock. EcoStock has conducted a successful AD Hospitality sector plant pilot in conjunction with Scion in Auckland. A focus on Auckland’s hospitality sector could prove fertile ground for circular economy gains. The business case for reducing food waste in hotels, for example, is compelling. On average hotels across 15 countries saved $7 for every $1 invested with 70% getting their money back in a year.24
23 The Courtauld Commitment 24 The Business Case For 2025, The Waste and Reducing Food Loss And Resources Action Waste: Hotels, Wrap, March Programme (WRAP) 2017
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 34 Food packaging Packaging is a major feature of the food and beverage Key actions sector. It provides major opportunities to reduce to catalyse change food loss and waste. However, the current use of plastic packaging creates waste and environmental 1. Systems approach for the food damage. Initiatives exist to increase the recyclability sector involving the whole value chain of packaging and reduce the use of single use plastic bags. But they only scratch the surface of what has become a major global issue. 2. Investigation of benefits of The global packaging supply chain and regulators Anaerobic Digestion plants need to work to change this system. A new approach is required to rethink the entire manner in which materials Implementing the global New Plastics are used within our economy. 3. Economy initiative in New Zealand to The New Plastics Economy administered by the Ellen MacArthur Foundation (EMF) includes a plastics begin systemically tackling the protocol, commitments from global brands and a issues associated with plastic systems approach to achieving those commitments. Working with EMF will be an opportunity for Auckland packaging and New Zealand to deliver substantive change on this across the Asia Pacific region.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 35 Transport and Logistics
Auckland’s transport and logistics sector contributes $4,031m to Auckland’s GDP, approximately 5%25 But the transport system is high carbon, inefficient and unhealthy, similar to many large and growing cities worldwide.
Road transport is the largest Vehicle ownership per capita in contributor to Auckland’s carbon NZ is the highest in the OECD footprint at 36% (2016).26 In 2017 and rising. There are now the economic productivity loss approximately 770 vehicles per impact of congestion in Auckland 1,000 people28 and there are high was estimated at $1.3 billion. Air levels of driver-only vehicle use, pollution from motor vehicle use accounting for about 77% of peak was estimated to contribute to 126 hour trips in Auckland.29 premature deaths in Auckland in 2006, with an overall social cost of Photo credit: Todd Eyre $446 million.27
25 Industry Insights: Transport, Logistics, 27 Benefits from Auckland Road and Distribution, Westpac Institutional Decongestion, NZIER, July 2017 Bank, 2015 28 2013 Census QuickStats about transport 26 Auckland’s Greenhouse Gas Inventory to and communications, StatsNZ, 2013 2015, Shanju Xie, October 2017 29 Facts & Figures about automobile use in New Zealand, NZTA
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 36 Global research has indicated that a typical European Infrastructure The New Zealand vehicle fleet car is parked for 92% of the time,30 a figure that is likely Currently major transport infrastructure assets The average life of our private vehicle fleet has to be similar in New Zealand. Regarding freight, New are generally designed with a whole-of-life increased over recent years and is now 14 years.33 Zealand logistics company Freighthub estimates that cost focus, and so built for long life. There is This is positive from an asset use optimisation on average nine out of every 20 trucks are running inevitably some trade-off between upfront perspective, but there are negative implications empty in NZ (i.e. 55% capacity).31 cost and the need for ongoing maintenance. for fuel efficiency, carbon reduction, and local air The Auckland transport and logistics sector is well Action is underway to address the high rates pollution. Typically there are high rates of recycling positioned for a transition to a circular economy of construction and demolition waste from of our vehicles at end of life. transport projects (including road building and From a transport perspective, there has been some New transport technologies and business models maintenance). meaningful progress in Auckland over the last decade, are already emerging in Auckland, including electric especially since unification created the Super City. The last decade has seen significant progress vehicles of all kinds, shared use car and bicycle But it has started from a very low base. The city has in public and active transport infrastructure. schemes, and artificially intelligent fleet traffic a vision of an integrated and low carbon transport The Northern Busway, rail electrification and management. system, and a clear strategy, but progress is slower separated cycle-ways are all good examples. than needed, especially given population growth. The City Rail Link and other planned There are good examples of progress to increased developments will continue to improve the circularity, but there are constraints in investment and situation. But these networks are incomplete, limitations in policy settings and incentives. and very significant ongoing investment is needed to accelerate the shift away from However, the recent draft Government Policy private car use. This will only be economical Statement on Land Transport, and the latest Auckland in areas with sufficient population density to Transport Alignment Project package provide the enable public transport to be provided cost- opportunity for a step change.32 effectively. 30 Driving and parking 32 Government Policy Statement patterns of European car on Land Transport, Ministry of drivers - a mobility survey, Transport, April 2018 Joint Research Centre, 2012 33 Monthly Electric and Hybrid 31 Future Freight Scenarios Light Vehicle Tables, Ministry Study, Ministry of Transport, of Transport, April 2018 November 2014
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 37 Opportunities for business
A circular economy transport system maximises use of assets; uses renewable, low carbon energy; and has an end-of-life system that prioritises re-use or recycling of transport assets.
A 2017 OECD report34 into the opportunities for shared For Auckland this means: The rapid development of new technologies and mobility in Auckland estimated that carbon emissions innovative business models like mobility-as-a-service • moving away from high levels of vehicle and congestion would be halved if all private car trips provides great opportunity for a shift to a circular- ownership35 and sole occupancy vehicle use36 were replaced with shared modes. It also noted the based transport system. opportunity offered by a strategic approach using • shifting to public transport, active transport, and New materials and energy technologies are making a shared transport services on ‘first mile, last mile’ shared use of private vehicles positive difference to Auckland’s transport system. journey segments, connected with rapid transit nodes. • reducing the need for transport, for example The shift to electrification of transport is underway, through the use of ICT, and higher-density and with modest uptake rates for electric vehicles,37 centralised land-use developments including light vehicles and e-bikes. There is also increasing provision of charging infrastructure. • ensuring that transport systems are powered by renewable energy, primarily through electric vehicles and supporting infrastructure
34 Shared Mobility Simulations 36 Data and Spreadsheets for Auckland, International - Household Travel Survey, Transport Forum, November Ministry of Transport, 2017 2003-14 35 Monthly Electric and Hybrid 37 Monthly electric and hybrid Light Vehicle Tables, Ministry light vehicle registrations, of Transport, April 2018 Ministry of Transport, April 2018
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 38 • New lightweight materials are increasingly used • Car share pioneers like CityHop,39 peer-to-peer These examples offer promise. But uncertainties in vehicle components, improving material use car rental platforms like Yourdrive and bike and challenges remain across the areas of policy, efficiency and in-use fuel efficiency. share companies like NextBike and Onzo are all infrastructure, technology, and consumer acceptance. appearing on Auckland’s streets, although scale is These include overcoming an embedded mindset • Integrated digital ticketing like AT Hop, with modest. of private vehicle ownership and many decades of associated reduced fares, is facilitating public inadequate investment in public transport. transport uptake. • The TNX freight matching platform technology used by Coda Group40 is an example of how The Sapere report suggests emissions from the road • The new RideMate app, in Auckland,38 freight vehicles can be better utilised. transport sector can be reduced by 40% by 2030, a collaboration between NZTA, Auckland Council allowing for rebound effects. This assumes a range and Auckland Transport, offers users real-time • Waste Management has opened New Zealand’s of circular economy opportunities are implemented, information on different journey options. first workshop dedicated to converting diesel including car and ride sharing, material evolution, trucks into electric vehicles.41 • Traffic flow optimisation technology is contributing electric vehicles, systems integration and autonomous to more efficient use of the road network. vehicles. • Ride share apps like Smart Travel and Chariot o ffer potential to better utilise private vehicles. But, so far, ride share uptake is low, illustrated by the limited use of T2/T3 lanes by light vehicles and the persistently high rates of sole occupancy vehicle use.
38 Mobility as a Service (MaaS) 41 New Zealand’s first truck – the new revolution, NZTA conversion workshop opens 39 Car sharing, City of Sydney in Auckland, Waste 40 TNX brings fresh technology Management, 2017 to the New Zealand supply chain, Coda Group, August 2017
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 39 Key actions to catalyse change
A systemic shift to a ‘circular-based’ Re-think your transport system will require deep fleet management: collaboration between the public Replace some vehicle needs with and private sectors. shared vehicle and/or mobility as a service, fleet bicycles or e-bikes; provide alternative Central and local government will have the key benefits to allocated vehicles; accelerate role. It is they who must provide an enabling policy environment and lead investment in and development electrification of the residual vehicle fleet; and use of infrastructure. Businesses can directly and indirectly biofuels during the transition. support the development of required policies and infrastructure. They also have a key role as producers. Encourage sustainable commuting by providing It is they who will develop ‘circular-based’ transport solutions to exploit new opportunities. They can also alternative benefits to free or subsidised parking. play a key role by prioritising the procurement of transport services in line with the circular economy. Support freight and delivery operators introducing services with low carbon features.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 40 Construction
Auckland’s construction sector represents $4,194m, 5% of Auckland’s GDP. 42 Construction and demolition waste also represents Auckland’s largest single waste stream, at around 40% of total weight going to landfill.43 This doesn’t include the greater quantities of rubble and concrete that go to cleanfill (uncontaminated sites where natural materials are deposited) and managed fill sites.
This is coupled with the ongoing the bespoke nature of builds, evidence that more coordination growth of the sector due to particularly in housing. There are is happening across parts of the consistent population growth. This also a large number of small firms system to achieve more circular means there is an obvious need and contractors involved. outcomes. Increasing use of and opportunity for the sector to ‘integrated fit outs’ for commercial That said, there are some ‘end of move towards greater circularity. buildings, allowing tenants to life’ solutions. Green Gorilla has its influence the fit out at the design However, circular economy own construction waste materials stage, rather than retrofitting into principles at a systemic level recycling facility. Diversion services a pre-designed and constructed have yet to gain traction across are offered by the likes of Junk Run space, being an example. the sector. Instead the focus and Trow Group, re-distributing is on initial price and speed materials to communities instead of construction, alongside of into landfill. There is also some Photo Credit: Gareth Cooke/Subzero Images
42 Auckland Growth Monitor, 43 Draft Auckland Waste Auckland Tourism, Events, Management and and Economic Development, Minimisation Plan 2018 October 2017
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 41 Opportunities for business
There is a need to change the Material selection is crucial and designer Prefabricated housing specifications should include the supplier providing fundamental way that we design Manufacturing homes off-site places the building end of life solutions. Reuse opportunities need to be a process within a centralised system rather than and build in Auckland. factor in selecting materials. spread across building sites. This can reduce waste, From a client perspective, the key elements are incentivise greater standardisation and enable Buildings need to be designed and built through a understanding and recognising the benefits of a efficiencies that reduce overall costs.45 3D printing circular lens to not only minimise waste and associated circular approach and ‘resetting procurement’ so it may also offer opportunities in this area.46 Those costs but to maximise value over the whole life cycle takes a whole of life view on investment. opportunities need to be balanced against the risk of of the building. low quality prefabricated homes being disposed of Increasingly we are seeing signs that such disruption From a designer perspective this will require advising and replaced on relative short life cycles. to the construction sector is coming. But there remains the client on the benefits of a circular approach, a need to increase incentives for minimising waste in considering the life cycle of buildings, the different the sector, and provide a more supportive platform Problematic materials ‘layers’ of the building and aligning appropriate circular for greater circular innovation. A significant increase Timber used in construction is required to be design strategies. It will mean incorporating ease of in the waste levy and a requirement for waste plans chemically treated in New Zealand. This means maintenance and upgrades, as well as allowing for to be submitted and monitored as part of the building secondary use for off-cuts and deconstructed timber flexibility and deconstruction.44 consents process are two ways in which that could be is severely limited. A different approach to ensuring rapidly achieved. durability of timber could unlock significant value and enable a reduction in landfill from the sector.
44 Top Tips for Embedding 45 Why Prefab? PREFABNZ Circular Economy Principles 46 This House Can Be 3D in the Construction Industry, Printed for $4,000, Adele The Green Construction Peters, March 2018 Board
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 42 New ecolabels for Product stewardship Housing construction construction waste services A number of Ministry for the Environment A ‘Designing Out Waste’ study found that in the accredited Product Stewardship schemes construction of an average Auckland house selling A lack of transparency about what happens to operate within the construction sector. for $828,000, $100,000 of the budget is wasted. waste has been cited as a barrier to greater This includes $31,000 of materials, as well as labour diversion from landfill. The New Zealand • 260,000 tonnes of waste concrete is inefficiencies like repeating incorrect work. An Ecolabelling Trust is researching and developing generated in New Zealand each year. average of 2,000kg of timber waste and 700kg of a specification for best practice construction and Envirocon enables wet waste concrete plasterboard waste occurs in a typical house build. demolition waste services. to be turned into a modular wall system, Typically 10% of ordered building materials are unused Interbloc. The intention is to build on work already done in and disposed of as waste. this area. Criteria are being developed to meet the • Resene’s Paintwise scheme provides This is driven by: requirements of Green Star and other third party unwanted paint and paint packaging verifications. An ecolabel will provide confidence recovery services and education to • lack of awareness of waste in good construction and demolition waste minimise the impact of paint wastes • lack of responsibility management practice and encourage innovation in on the environment. the sector. • lack of consideration for waste minimisation • The Interface Re-entry programme in the design converts old carpet to new carpet. • over-ordering • methods of work resulting in offcuts • mistakes
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 43 Key actions to catalyse change
Getting the most from Short term building deconstruction 1. Provide an incentive for diverting construction waste from landfill via a The Sustainable Business Network and AUT 1. Provide space to sort, both onsite and offsite significant increase in the Waste Levy recently produced Activating Deconstruction at centralised facilities. and Reuse - reducing deconstruction and 2. Establish product stewardship schemes for 2. Stipulate waste plans as part of the demolition waste. materials. consent process
This report outlines six key opportunities for 3. Make waste management plans compulsory 3. Increase the specification for the enabling greater levels of deconstruction rather and monitor for compliance. percentage of recycled materials that than demolition and for extracting greater value can be used in road building from buildings at the end of their life. This is 4. Build in time to allow for deconstruction and based on effectively utilising the upper parts of associated activities. the waste management hierarchy - reduce, reuse 5. Increase the Waste Levy to make waste Longer term and recycle. Develop a network of outlets to diversion from landfill activities more competitive. 1. Incorporate circular economy principles distribute materials in building design and processes
2. Move to more off-site, standardised construction methods Civil construction 3. Address key current waste streams, Civil construction provides a more immediate identify the causes of the problem and ‘end of pipe’ solution for some demolition instigate appropriate plans to resolve waste streams, most obviously increasing the e.g. the chemical treatment of timber amount of recycled concrete that can be used in roading.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 44 Conclusion This report is an important step down a path that Auckland is already on.
New Zealand’s biggest city must make the journey to a circular economy as soon as possible if it is to continue as a competitive business hub. That voyage is inevitable; all that is yet to be seen is the pace at which we make it.
Thankfully, the benefits of making this transition are as clear and obvious as the fact that it will occur. And New Zealand has the competitive advantage of a vibrant indigenous business culture to inform and inspire this transition.
The benefits are mounting up, but so are the costs of not proceeding.
There is already a lot of good work happening in this area. But what Auckland needs now to accelerate its move into a circular economy is a systemic, whole economy approach to coordinate, stimulate and, if necessary, regulate this work.
Businesses not already on or considering the transition need to start now.
Deeper study and analysis will be necessary. But the $8.8 billion opportunity identified in this report can be realised. Businesses that move first and fastest are those most likely to gain a greater share of the prize.
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 45 Acknowledgements Thank you to the partners and contributors of this report.
Content Dr Jeff Seadon, Senior Research Fellow, Charles Widdicombe, Chief Financial Juhi Shareef, Corporate Sustainability Built Environment Engineering, AUT Officer, Eco Stock Manager, Fuji Xerox NZ A team from the Sustainable Business University Network/Circular Economy Accelerator, Dana Patterson, Senior Analyst, Ministry Julie Dickinson, Senior Waste Planning comprising: Eve Charles, Planning Manager – for the Environment Specialist, Auckland Council Business, Innovation and Skills, ATEED Main author and project manager: Daniel Faris, CEO, Locus Research Katja Lietz, GM, Masterplanning and Placemaking, HLC James Griffin John Mauro, Chief Sustainability Officer, David Banfield, CEO, Methven Auckland Council Louise Baker, Market Sector Lead – Contributors: Phil Jones, Emma Dominic Salmon, Business Smart Mobility & Advisory Services, Brosnahan, Sam McGlennon, Andy Juhi Shareef, Corporate Sustainability Development Manager, 3R Group Kenworthy, Fiona Stephenson, Rachel Manager, Fuji Xerox NZ OPUS Dr Jeff Seadon, Senior Research Brown with assistance from Peter Parul Sood, Waste Planning Manager, Louise Nash, Founder, Circularity Francissen and Melissa Tomashek Fellow, Built Environment Engineering, Auckland Council Auckland University of Technology Nick Morrison, Director, Go Well Funding Partner Consulting Contributors via workshops Emily Preston, Venture Manager, Ākina Auckland Tourism, Events and and interviews Foundation Paul Evans, CEO, WasteMINZ Economic Development (ATEED) Adele Rose, CEO, 3R Group Eve Charles, Planning Manager – Peter Stewart, Director, Supply Chain, Funding Support Partners Alexandra Clement Jones, Sustainability Business, Innovation and Skills, ATEED CHEP Fuji Xerox NZ, 3R Group, Inzide and Resilience Advisor, Auckland Genevieve Smith, Associate – Robb Donzé, Director, Inzide Commercial, Junk Run, Council Environmental, Beca Commercial Ministry for the Environment Andrew Prest, Managing Director, Hamish Bunn, Group Manager Sam Archer, Director of Market Steering Committee Andrew Prest & Associates Integrated Network Planning & Transformation, New Zealand Green Adele Rose, CEO, 3R Group Andrew Walters, Director, Global Action Sustainability Strategy Division, Building Council Plan Oceania Auckland Transport Claire Mortimer, Principal Policy Advisor, Office of the Chief Executive Andy Crowe, Managing Director, Jeff Vickers, Technical Director, at Ministry of Business, Innovation and Critical Design thinkstepJenny Marshall, Project Lead, Love Food Hate Waste Employment Carl Chenery, Environmental and Sustainability Advisor, Auckland Josh Borthwick, Head of Ads, Trade Me Transport
SUSTAINABLE BUSINESS NETWORK THE CIRCULAR ECONOMY OPPORTUNITY FOR AUCKLAND | 46 Disclaimer This report has been produced by a team at the Circular Economy Accelerator (part of the Sustainable Business Network) by building on existing work analysing contributions from stakeholders listed in the acknowledgements. Their participation does not necessarily equate to endorsement of the report’s contents or conclusions.
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