Essay eleven: Circular economies and renewable resources
Leather and the circular economy
When we published the original essay eleven in the Nothing to Hide series, in the October-November 2015 issue of World Leather, it was one of the first references there had been in the magazine to the circular economy. It went on to inspire a whole new section devoted to this subject, which, since 2020, has so far generated 88 detailed articles, with many more to come.
Dr Gunter Pauli sees renewable resources everywhere and continually puts his weight behind business ideas that will create jobs without depleting the planet’s resources. His vision has helped tanners articulate their own powerful story of taking leftover material from another industry and using it to create something versatile, durable, renewable and beautiful: leather.
His inventiveness became evident as soon as Dr Gunter Pauli’s university days were over. His first big breakthrough was at Ecover, now a global brand with a wide range of ‘green’ detergents and part of the SC Johnson & Son group. Dr Pauli helped to rescue the brand from financial difficulties in the 1980s and left an eye-catching environmental legacy, including one of the greenest buildings in Belgium, staff bonuses for commuting by bicycle and a workers’ agreement to wear company-provided Patagonia baselayer clothes in winter to keep energy bills down. Green thinking has never really been enough for Dr Pauli and in 1994 he set up Zero Emissions Research and Initiatives (ZERI), a diverse group of thinkers, but also of doers. ZERI is a network of researchers, searching constantly for what the founder calls “very pragmatic solutions to things that we know can be solved now”.
In 2009, he put many of the group’s early solutions into the first edition of a book entitled ‘The Blue Economy’, highlighting innovations that he believed could generate 100 million jobs in ten years. A follow-up edition, ‘The New Blue Economy’, appeared later. He calls it blue because it goes beyond green. He said at the time of the original essay eleven that he had fallen short of his original plan, having generated from the first round of ideas “only” three million jobs (and $4 billion in investments) from 200 projects.
Underpinning all of these is the idea of using as fully as possible, but always in the most sustainable way, the materials and resources we have to hand. For as long as people on earth want to eat meat, the leather industry will have a strong claim to be a fine example of how the circular economy (or the blue economy) can work, taking another industry’s waste material and adding high levels of value to it, while creating good, honest work for thousands of people around the world.
Brainwashing
In December 1997, following the third United Nations Climate Change Conference (COP3), Gunter Pauli was given the task of drawing up a business model that would be in keeping with the Kyoto Protocol, the treaty that came out of COP3 committing governments to reducing greenhouse gas emissions. “When I made my presentation, there were four people in the room, me included,” he says.
“You can change technologies and processes, but what is really required is a change in the business model and no one then was interested in changing the business model. We were brainwashing all these MBAs to think in exactly the same way: core business with core competence, lower marginal costs, high productivity, low labour costs, just-in-time and economies of scale and, of course, great supply chain management. That’s what we’ve all been doing for 30 or 40 years and the result is that we have massive youth unemployment and communities that are dying because everything is globalised.”
Job generation
He says that what is required is a new logic. Companies must add value, so much value that they will “outcompete everyone”, but not on cost. The Blue Economy books highlight 200 projects that have already been implemented and Dr Pauli insists this is only scratching the surface. He feels a truly green economy (“one that is good for the world and good for business”) has struggled to break through in more established economic environments because green products are often too expensive. “What is good for us should be cheap or free,” he insists. “What kind of economy is it if what’s good for us is expensive and what’s bad for us is cheap? This is madness, but this is also why business schools never invite me to give talks to their students, and they’re right not to because I exist to upset their way of doing things.”
The cheapest raw material in the world
Examples of the projects he has been involved in include Novamont. This company, based in Novara in northern Italy, has set itself the mission of developing materials and biochemicals through the integration of chemistry and agriculture, by starting up state-of-the-art biorefineries in agricultural communities. It wants farmers to be able to make the most efficient use possible of all their resources throughout the entire lifecycle, generating social, economic and environmental benefits.
Novamont refers to its biorefineries as “third generation”, which means they are dedicated to the generation of high-added-value products from biomass. One of these facilities is at Porto Torres in the north of Sardinia. It is on the site of a former petrochemical plant that was processing two million tonnes of petroleum per year to produce 700,000 tonnes of chemicals. “That’s not resource-efficient,” Dr Pauli, one-time chairman of Novamont, says. “Instead, we decided to use thistles. There are 360,000 tonnes of thistles in Sardinia alone because the European Union has been paying farmers there not to farm and what you get when you don’t farm is weeds, including thistles. The thistle is the cheapest raw material in the world: you don’t have to plant it, you don’t have to use pesticides; the only thing you have to do is harvest it. Shale gas will never compete with us. Petroleum is a joke for us.”
Novamont’s thistles are yielding lubricants, natural herbicides that have a commercial value, but also polymers. Waste from the thistle-refining operations is 20% of volume, but, unlike the waste output from most chemical factories, it can all go into animal feed. The company has now taken over six former petrochemical plants in different parts of Italy; it is raising the investment it needs to transform them all into third-generation biorefineries that will bring benefits to all, while employing people at unionised European chemicals industry rates. Its costs are a tenth of those of other industrial biotechnology companies.
What can happen in a circular economy
Coffee is another passion: not drinking it so much but rather using the waste to farm mushrooms. ZERI has helped set up 3,000 farms producing mushrooms in coffee waste. The network’s founder says he thinks this is a failure. “We should have 500,000 of these farms,” he insists. “Nestlé produces millions of tonnes of waste from its instant coffee production. That would make millions of tonnes of mushrooms.” Nestlé could generate 600,000 jobs from this, he continues.
He is an admirer of Singtex, a Taiwanese technical textiles manufacturer that launched S-Café in 2009, a yarn that includes recycled coffee grounds, which the company says imbues textiles spun from the yarn with odour-control, quick-drying and UV protection functionality. ZERI projects that S.Café has inspired include coffee-enhanced nylon 6 for carpets to make rooms odour-free, because the coffee absorbs bad odours. It’s also going into polyurethane in refrigerators to make refrigerators that absorb odours and into paint to make paint that scatters UV. Adidas, Puma and Patagonia are big brands that have switched on to the possibilities here, he says, of putting coffee-enhanced yarns into their clothing and possibly footwear. Automotive companies can do something similar with their car interiors, he believes.
These are all examples of what can happen in a circular economy. ZERI continues its work on plenty of others.
Change the world
Dr Pauli admires many of the products that the leather industry contributes to, calling bags, for example, humankind’s greatest invention ever. Not because bags now constitute an industry worth billions, but because having bags fashioned from animal hides in which to store food enabled our early ancestors to collect and transport (hands free) 15 times more food than it is possible to eat in one day.
He likes silk, too, and wants to push global production to one million tonnes per year from current levels that are closer, he claims, to 100,000 tonnes (up-to-date figures are hard to come by but during the United Nations Year of Natural Fibres in 2009, it said global production levels had been at 100,000 tonnes in 2000 but had risen to 150,000 in 2006). “This has nothing to do with Hermès or fashion,” he points out. He admires silk’s renewability and natural antimicrobial properties and bemoans its substitution by synthetic materials derived from petrochemicals.
“We need artisans,” he says. “Sometimes people say there is no demand any more for what artisans can do, but let’s generate demand. It is just a question of communicating. Let’s regenerate a culture of artisans using natural materials. Consumers can be transformed into agents for change.”
Much of what Dr Pauli said at the time of the original essay foretold what the European Commission laid out in a 24-page document to explain a set of policy initiatives it is calling The European Green Deal, which has the aim of “resetting” the organisation’s commitment to tackling climate and environment-related challenges. The document, published at the end of 2019, describes such an undertaking as “this generation’s defining task”.
It wants the European Union (EU) to continue to be a prosperous body and for its economy to grow, but it wants this growth to become “decoupled” from the use of new resources. Renewable resources and the reuse of resources already in circulation will be fine, as long as they can be produced or recovered in sustainable ways.
This is what the future looks like: using what we can grow and recover to make the products we use to live, keeping things for a long time, repairing them when we need to, passing them on for someone else to use when we no longer want them and, eventually, taking the product back and recovering the materials it was made from and giving these a second, third, fourth, or even fiftieth life. Materials must go round in circles; as little as possible must go to waste.
Global questions
These are global questions, of course, which the European Commission acknowledges. It says in the document that the EU will “use its influence, expertise and financial resources” to convince companies and governments around the world to join it on a sustainable path. As “the world’s largest single market”, the EU believes it can set standards that will apply across global value chains.
The European Commission believes a move to a circular economy is an essential part of its plan. It says it could take 25 years to transform supply chains from the linear model of make-sell-use-throw away and instead make them circular, with manufacturers taking by-products from each other to keep adding value, with little or nothing going to waste. But it insists that action needs to take place now so that, by the target date of 2050, we can have sustainable ways of making and consuming things.
In the document, the European Commission says it wants to support and accelerate industry’s transition to the circular economy and the Green Deal contains a new circular economy action plan. Part of this will be to take action to stimulate markets, inside and outside the EU, for circular products, encouraging the companies that make these products to create new, green jobs, which is also the main motivation for Dr Pauli’s Blue Economy initiatives. It will support the circular design of all products and will prioritise reducing and reusing materials ahead of recycling them.
This circular economy action plan will also include measures to encourage consumers to choose reusable, durable and repairable products, handing a competitive advantage to companies whose products or materials meet that description. It says new business models based on renting and sharing goods will play a role “as long as they are truly sustainable and affordable”. The Commission says it will tackle false green claims, vowing that companies engaging in green-washing will end up red-faced, named and shamed.
Public authorities, including the EU institutions, are to lead by example and ensure that their procurement is green. Legislation and guidance on green public purchasing will follow. Billions of euros are at stake here. Companies that verifiably meet the green criteria will be the ones winning the contracts.
The value of waste
It has much to say about waste, making it clear that if waste cannot be avoided, “its economic value must be recovered and its impact on the environment and on climate change avoided or minimised”. Here, too, there will be new legislation, including targets and measures for tackling waste generation. In parallel, the Green Deal document makes clear that “companies should benefit from a robust and integrated single market for secondary raw materials and by-products”.
It will be obvious to readers of this magazine that, in leather, the European Commission already has in front of its nose a clear example of a production sector that can already meet all of its circular economy requirements. Leather and the circular economy are a perfect match. And yet, the December 2019 document explaining The European Green Deal makes no mention of leather.
We can say on the one hand that this is disappointing but it comes as no surprise, in truth. It was for this reason that World Leather decided to begin the 2020s with its new Leather and the Circular Economy section. This provides a platform for tanners, leather chemical companies and finished product manufacturers to share opinions and experiences on this subject. For millennia, skilled people have been taking a by-product from meat production and, rather than let it go to waste, have turned it into a material whose versatility, durability, naturalness, sensuality, renewability and beauty knows no parallel. To use leather in shoes, furniture, automotive, aviation and other forms of transport, interior design, handbags or apparel is to choose a raw material that might otherwise have gone to waste. It is a material that you can repair and recover for reuse at the end of a product’s useful life, preventing waste (once more) and avoiding the need to extract new resources for the products we buy. It is the circular economy material par excellence and it is time more people realised that.
Our Leather and the Circular Economy section includes two types of articles: some covering the thought leadership on the circular economy that people across the leather industry are demonstrating, others covering case studies from companies that make or use leather to showcase their circular stories. The aim is to keep publicising examples of the leather industry’s circular economy credentials.
For as long as people on earth want to eat meat, the leather industry will be a fine example of how the circular economy can work.
