THE PRACTICAL CHALLENGES + OPPORTUNITIES OF TRANSFORMATION: OLD INDUSTRY, NEW INDUSTRY + DISRUPTIVE TECHNOLOGIES. Albin Kälin CEO EPEA Switzerland

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1 THE PRACTICAL CHALLENGES + OPPORTUNITIES OF TRANSFORMATION: OLD INDUSTRY, NEW INDUSTRY + DISRUPTIVE TECHNOLOGIES Albin Kälin CEO EPEA Switzerland

2 TODAY: CRADLE TO GRAVE DESIGN PARADIGMA

3 TODAY: LINEAR SYSTEMS AND THEIR DESIGN PROBLEMS Cradle to Cradle Products Innovation Institute

4 ALPHA THEMES DEFINE OUR FUTURE Nutrients Rawmaterials Downcycling Cradle to Cradle provides solutions

5 CONCEPTS OF INDUSTRY TRANSFORMATION: DO THEY FOCUS ON MATERIAL QUALITY IN MULTIPLE LIFECYCLES?

6 CRADLE TO CRADLE DESIGN CLOSING THE LOOP AND DEFINE MATERIAL QUALITY FOR FUTURE LIFECYCLES: BIOLOGICAL & TECHNICAL SYSTEMS Design beyond Productdesign Biological System Technical Systems EPEA Int. Umweltforschung GmbH

GOAL EU COMMISSION WORLDWIDE INDUSTRY PRODUCTION: 7 year goal EU Commission: 16% to 20% Stop deindustrialisation in Europe Closing the loop of materials Circular Economy new technologies new needs as

7 GOAL EU COMMISSION WORLDWIDE INDUSTRY PRODUCTION: 7 year goal EU Commission: 16% to 20% Stop deindustrialisation in Europe Closing the loop of materials Circular Economy new technologies new needs as fundamental drivers for innovation Stop downcycling, generate upcycling Design out toxic materials Implement Circular Economy and Cradle to Cradle Innovations Maintain quality of rawmaterials over multiple lifecycles. Implement cycle concepts in education Create jobs in closing the loop

8 RESOURCE PRICING SCENARIOS IN 2030: A DRIVING FACTOR FOR THE ECONOMY 1. Scenario: Business as usual Growth of global demand Industry dependency on new resources EPEA Switzerland GmbH 2. Scenario: Intermediate Results of resource efficiency initiatives Pressure for global agreement is too small Stessfactors will remain 3. Scenario: «Cradle to Cradle» «Circular Economy» Paradigm change with winners and loosers Impact of global initiatives Turnaround, tipping point will be reached Ecology, business and society will benefit (profit, planet, people)

9 RAWMATERIALS PRICING & CLOSING THE LOOP IN EU WASTE EXPORTS ARE INCREASING Plastics Recycling Prices/Volume Plastics Waste Import/Export Paper&Board Recycling Prices/Volume Paper Waste Import/Export

10 CHEMICAL INDUSTRY: FROM PASSIVE TO ACTIVE PARTICIPATION & PUBLIC ANNOUNCEMENTS OF POSITIVE LISTS e.g: TANATEX CHEMICALS Cradle to Cradle System integrated chemical solutions for cellulosic fibres Bleaching Biopolishing Vat dyeing Postscouring Softening Stabilizer Detergent Enzyme Levelling agent Sequestrant Lubricant Defoamer Postscouring agent Softener Bleaching Vat dyeing Postscouring Softening Stabilizer Detergent Levelling agent Sequestrant Lubricant Defoamer Postscouring agent Softener former: OBA Bleaching Softening Stabilizer Detergent OBA Softener

CHEMICAL INDUSTRY: DEPOLYMERISATION OF POST CONSUMER PRODUCTS e.g.

pet depolymerisation and motivate investors, bottle to bottle

g: Teijin Japan Production in Europe 2012: Polyamide 436 000 t/yr

11 CHEMICAL INDUSTRY: DEPOLYMERISATION OF POST CONSUMER PRODUCTS e.g.: Polyamide 6 - Aquafil / Julon (IT/SL) URGENCY NEED FOR POLYESTER, pet depolymerisation and motivate investors, bottle to bottle recycling is only a partial solution. e.g: Teijin Japan Production in Europe 2012: Polyamide t/yr (10%) Polyester t/yr (2%) Production Worldwide 2013: Polyamide t/yr Polyester t/yr

12 TEXTILE AND APPAREL: 1. INDUSTRIAL REVOLUTION Today: under attack, suffering of bad image Change is possible: lighthouses e.g.: Trigema Change Cradle-to-Cradle Polo-Shirt 100 % Organic Cotton, compostable TRIGEMA has developed together with the environmental institute EPEA the WORLD FIRST COMPOSTABLE polo SHIRT. The Wellness shortsleeved shirt made from ecologically degradable organic cotton is equipped with a nice polo collar, three-button placket and two-color Trigema logo. This great top piqué quality is as gentle to the skin and on nature. The material is easy to clean, durable and fade-resistant. Available in larger sizes up to 4XL.

13 TEXTILES: 60% OF MARKET COTTON/POLYESTER > No go in C2C!!!! Loosing quality of resources in closing the loop. Innovation implementation in Europe biodegradable polymer e.g.: Lauffenmühle Germany: Infinito yarns and reworx textiles Take-Make-Use-Regenerate: infinito yarns / reworx textiles are safe for biological systems, offer a climate control function, are suitable for industrial laundering with excellent performance results for easy care, light fastness, high abrasion and pilling resistance. The product is designed and qualified to be used for work wear as well as for other high performance textile products and applications. infinito yarns / reworx textiles are Cradle to Cradle CM certified at gold level: After use and more than 50 cleaning cycles the products will be collected and forwarded to an industrial composting facility where the textiles will safely transform to humus - which then means living space for other organisms: new life is generated.

TEXTILES & APPAREL: CLOSING THE LOOP Take Back Systems for Industrial Composting and Depolymerisation, Include industrial composting of industrial goods in EU-legislation: e.

14 TEXTILES & APPAREL: CLOSING THE LOOP Take Back Systems for Industrial Composting and Depolymerisation, Include industrial composting of industrial goods in EU-legislation: e.g: Lauffenmühle-D: Work Wear, Apparel made from Textiles Work Wear, Apparel made with reworx textiles are Cradle to Cradle CM certified at silver level: After use and more than 50 cleaning cycles the products will be collected and forwarded to an industrial composting facility where the textiles will safely transform to humus - which then means living space for other organisms: new life is generated. Lauffenmuehle textile innovation Cradle to Cradle certified Work Wear, Apparels made from reworx textiles are exclusively produced by licencees of Lauffenmuehle GmbH & Co. KG, Germany, a fully vertically integrated textile manufacturer - with more than 175 years of experience in producing yarns and textiles. Licensees of Work Wear, Apparel made from reworx : Bierbaum-Proenen (BP) Collection BP Bio Cycle

15 INDUSTRY CONSORTIUMS CREATING KNOWLEDGE + BETTER QUALITY e.g.: WOLFORD + TEXTILE CONSORTIUM AUSTRIA, Representing 13 % of the Austrian Textile Industry Austria FFG 7 Call COIN-Programme Cooperations and Networks Cradle to Cradle Competitive Basic Underwear Premium Unterwear for international markets according Cradle to Cradle : 14 consortium members Textile Industry. Projectstart July/August 2014

are the first Cradle to Cradle Certified CM Gold Level! But packaging Silver Level! Innovation is needed.

16 PACKAGING INDUSTRY: WASTING RESOURCES & USING TOXIC CHEMICALS PACKAGING VISION FOR THE FUTURE, WHERE IS IT? e.g.: Cleaning Detergent Frosch: Citrus Shower & Bathcleaner - Germany Pioniers in Europe Frosch Cleaning Detergents are the first Cradle to Cradle Certified CM Gold Level! But packaging Silver Level! Innovation is needed. Founder of Recyclat Initiative in Germany

17 ECOLABELS WITH LOWER STANDARDS ARE LIMITING TRANSFORMATION e.g. Case Study: Green Care Professional - Germany Performance by Design All products are based on innovative formulations providing highest and proven cleaning efficiency, confirmed by the EU Ecolabel certification Added value: Providing highest cleaning performance through perfect ecological product design Outstanding innovative and safe products for use and environment Comprehensive range for cleaning application - C2C Gold Certified

PAPER INDUSTRY: IN A CRISIS AND STILL RESISTING TRANSFORMATION Top NGO Ranking: Paper Industry Van Houtum Netherlands Toilet Paper Satino Black wins WWF Paper Award Van Houtum received the

18 PAPER INDUSTRY: IN A CRISIS AND STILL RESISTING TRANSFORMATION Top NGO Ranking: Paper Industry Van Houtum Netherlands Toilet Paper Satino Black wins WWF Paper Award Van Houtum received the international WWF Environmental Paper Award 2012 on 13 November. We won this award because our Cradle to Cradlecertified hygienic paper, Satino Black, scores highly in the area of environmental performance. A total of 11 companies received the award because they are transparent about their production process or achieve outstanding environmental performance with a specific product. Van Houtum is the only winner from the Netherlands.

19 BUILDING INDUSTRY: THE SECOND LARGEST & WASTING RESOURCES Need for innovations in materials and processing (glues, foams etc.) A vision for the future: Cradle to Cradle in buildings & within facility management e.g.: Search Field Hochtief Development Schweiz - Switzerland DNA OF A BUILDING (Raw Materials Bank, Value Agreement on Raw Materials) Inventory of all built in raw materials and products Include cyclability in planning Assure preservation of raw material quality Modular construction for a good separability of materials (planning building use renovation decommissioning next life in new building) Presentation of the economic consideration and advantages for investors

THE ROLE OF CEMENT 2050: LOW CARBON ECONOMY Vision for the future: Cement for the living environment and next generations and what about: Flying ash with hazardous chemicals input in new cement?

Phase out instead of monitoring Material health as priority Policy recommendations Develop appropriate indicators to measure resource efficiency based on the entire life cycle so that the most

20 THE ROLE OF CEMENT 2050: LOW CARBON ECONOMY Vision for the future: Cement for the living environment and next generations and what about: Flying ash with hazardous chemicals input in new cement? Lower environmental standards? Phase out instead of monitoring Material health as priority Policy recommendations Develop appropriate indicators to measure resource efficiency based on the entire life cycle so that the most environmentally and economically optimal use of recycled C&DW can always be identified and implemented. Revise local building codes to encourage increased levels of recycled content for different applications. The success of these codes would be linked to effective systems for materials testing and certification. Encourage development of building techniques that will allow easy sorting of construction and demolition waste. [1] Source: Sustainable benefits of concrete structures, European Concrete Platform

WOOD INDUSTRY: TREATING WOOD WITH CHEMICALS FOR CLOSED LOOP CONCEPTS e.g.: Bauwerk Parquet: Wood Parquet for Generations Parquet for Generations Bauwerk parquet is designed to last.

Bauwerk acts in a fair and socially responsible manner, both within the company and in public.

21 WOOD INDUSTRY: TREATING WOOD WITH CHEMICALS FOR CLOSED LOOP CONCEPTS e.g.: Bauwerk Parquet: Wood Parquet for Generations Parquet for Generations Bauwerk parquet is designed to last. It should never become a waste product or consume unnecessary or environmentally harmful energy. Raw materials are preserved and the resource water is treated with consideration. Bauwerk acts in a fair and socially responsible manner, both within the company and in public. EPEA Switzerland is assisting Bauwerk in its implementation of the cradle to cradle vision and supporting the company during the certification process by the cradle to cradle product innovation institute. Raw materials are analysed as to their composition and environmental impact and traced back to their origin. During the certification process for Bauwerk s new silente technology, both the suppliers and Bauwerk s manufacturing facilities were subjected to close scrutiny.

EU-27 TREATMENT OF HAZARDOUS + NOTIFED WASTE SHIPPED OUT OF EU MEMBER STATES TO OTHER EU MEMBER STATES OR OUT OF THE EU 2001 TO 2011 Notified waste exports + 230% 2001-2011 The EU waste average

22 EU-27 TREATMENT OF HAZARDOUS + NOTIFED WASTE SHIPPED OUT OF EU MEMBER STATES TO OTHER EU MEMBER STATES OR OUT OF THE EU 2001 TO 2011 Notified waste exports + 230% The EU waste average increased from 22 kg in 2007 to 29 kg in Closing the loop of materials and maintaining the qualities of resources can create jobs in local employment opportunities and will save money as waste disposal will get more expensive in the future

EXPORT OF E-WASTE: ELECTRONIC GOODS AS TECHNICAL NURIENT e.

inspectorate SENS, SWICO Recycling, SLRS 2011 indicates the complexity of todays

50% metals, 25% plastics mostly thermal recycled.

23 EXPORT OF E-WASTE: ELECTRONIC GOODS AS TECHNICAL NURIENT e.g: Search Field SENS - SWITZERLAND The table from the report of the technical inspectorate SENS, SWICO Recycling, SLRS 2011 indicates the complexity of todays system. 75% materials of electronics and electronical goods are reused. 50% metals, 25% plastics mostly thermal recycled. However 25% of waste remains and offers a potential. The Cradle to Cradle approach improves the quality of the rawmaterials in the closed loop and has the goal to eliminate waste.

24 ELECTRONIC GOODS: TODAY S RESOURCES CYCLE Contract Revision Retail Consumer e-recycling.ch Import Agent Materialflow Collection Point Manufacturer Component Suppliers SENS Platform Recycler Recycler II Contract Characteristics Controling Rawmaterial Mining Destruction

ELECTRONIC GOODS: CRADLE TO CRADLE RESOURCES BUSINESS CASE

ch Import Agent Design- + Processmodification Manufacturer

Processmodificaton Materialflow SENS Platform Collection Point

25 ELECTRONIC GOODS: CRADLE TO CRADLE RESOURCES BUSINESS CASE Education Contract Revision Retail Consumer e-recycling.ch Import Agent Design- + Processmodification Manufacturer Component Suppliers Rawmaterial Processing Design- + Processmodificaton Materialflow SENS Platform Collection Point Prozessmodification Recycler I C2C Recycler II Contract Characteristics Controling Rawmaterial Mining Destruction

26 AUTOMOTIVE INDUSTRY: RECYCLING > DOWNCYCLING e.g: Change regulations from quantity to quality, transformation of industry FORD - MODEL U FOR CHANGE START STOPPED 2006

27 CLOSING THE LOOP WITH CARBON COMPOSITES? Closing the loop of Carbon composites is downcycling Chemistry resolves toxic concerns about carbon fibres Solutions? Need of Innovation and transformation of industry

28 INTEGRATING CONSUMERS INTO TAKE BACK SYSTEMS WITH DEFINED RESOURCES QUALITY e.g.: Business Case Office Chairs Stoll Giroflex AG, Switerland «Swiss Quality»

29 EDUCATION: ENABLE THE NEXT GENERATION TO TRANSFORM INDUSTRY e.g.: Academic to include Circular Economy and Cradle to Cradle What is it? Philosophy Approach Design support Environmental impact Cradle to Cradle Innovation framework, Business concept (Circular Economy), but maintaining the quality of raw materials It is possible to design products with a positive impact on people, the environment and economic profit (the three P s) Eco-effectiveness: developing a product with positive qualities. The process is part of the ultimate goal. Use the 3 guiding principles to establish a clear direction: waste = food, renewable energy, Respect diversity Maximization of positive effects on people, their environment and the future availability of high quality raw materials. Life Cycle Assessment (LCA) Method for measuring the environmental impact of products over the entire lifecycle All products pollute, they all require extraction of raw materials and there is always some form of waste left over Eco-efficiency: doing more with less. Improving the ratio between economic value and environmental impact. The aim is to measure the result, not the process Use hot spots to set priorities for improvements. LCA is used as a measuring instrument in eco-design, whereby hot spots (life cycle elements with the biggest negative environmental impact) are identified so that designers can set priorities for improvements. Ecological footprint Develop a positive beneficial footprint. Measure the footprint and let designers decide how to handle with it. EPEA Switzerland GmbH

30 QUESTIONS REMAIN FOR TRANSFORMING INDUSTRY TOWARDS A CIRCULAR ECONOMY Is GDP the right measure in a circular economy approach? Change of Business Models Stock exchange, who will remain on DAX, Dow Jones etc? Impact power of legislation, e.g. reach, toxic materials, waste permissions, industrial composting for industrial goods Integrate in education LCA scientific debate closing the loop in view of C2C Consumer behaviour changes > ownership and leasing, renting Product / Service (do not forget the products) Change from waste management to resource management Infrastructure needed to close the loop Industry + chemical industry need to invest to close the loop

31 DESIGN FOR A CIRCULAR ECONOMY MUST CONSIDER DISRUPTIVE TECHNOLOGIES Beyond industrial design and recycling Focus on real consumer needs > disruptive technologies Infrastructure challenges are local employment opportunities, e.g. remanufacture, repair, reuse, take back, recycle > creating jobs Keep resources in Europe and invest in technology of resource processing e.g.: reinforced plastics, electronics, fibres Incentive tax models for ecofriendly products Quick win circular economy? The future will tell, but there is no other way out

EPEA SWITZERLAND GMBH Seestrasse 119 CH-8806 Bäch / SZ www.epeaswitzerland.com Albin Kälin, CEO kaelin@epeaswitzerland.

32 EPEA SWITZERLAND GMBH Seestrasse 119 CH-8806 Bäch / SZ Albin Kälin, CEO kaelin@epeaswitzerland.com Mobile: Cradle to Cradle Products Innovation Institute: Cradle to Cradle is a registered trademark of McDonough Braungart Design Chemistry LLC (MBDC). Cradle to Cradle Certified is a certification mark licensed exclusively for the Cradle to Cradle Products Innovation Institute (C2CPII).

Cradle to Cradle Innovations - Rethinking the way we make things An innovation, system and business path towards a circular economy

Cradle to Cradle Innovations - Rethinking the way we make things An innovation, system and business path towards a circular economy Albin Kälin 1, Marko Krajner 1, Roman Kunič 1,2 1 EPEA Switzerland GmbH,