Episode 4: "The consulting point of view on how industries are embedding circular economy in their operations to grasp its economic and environmental benefits”.

 Interview partner: AFRY – Riccardo Traverso, Senior Principal, Sustainability Consulting

1.     Could you please tell our readers how AFRY is supporting the shift towards a circular economy approach?

 As an Energy and Sustainability consulting leader, AFRY has developed a strong positioning towards circular economy. In fact, the interdisciplinarity and internationality of its +20,000 employees has allowed AFRY to develop a unique support to clients in terms of circularity, establishing a consulting holistic approach to reduce resource consumption globally that is focused on four main pillars: the circulation of renewable and recycled material; the maximization of the utilization of materials by promoting resource efficiency, sharing and service concepts; the value preservation by enabling reuse, remanufacturing and recycling of products and components; the prevention of resource shortages.

AFRY todays supports companies towards a circular economy approach through a comprehensive integration of consulting services to boost circularity and integrate it within their strategy. In particular by:

1.     conducting studies and screenings related to circular economy in specific business areas and performing assessments of sustainability performance of circular solutions (e.g. Life Cycle Assessment – LCA)

2.     providing strategic advice, development of business models, definition of circular economy governance models and policies, transformation of value chain and logistics to enable a circular economy

3.     designing products and services, analyzing materials through eco-design principles

4.     focusing on resource and material efficiency and utilization, waste management and utilization

AFRY has many years of experience developing industrial workflows and processes, especially in segments such as process industry, energy, water and waste management, and each project is accompanied by integrated competencies specialized in circular economy as well as by a sector-specific expertise in order to develop tangible improvement measures.[DG1]

2. According to your experience, what is the impact that circularity is having on the energy sector’s players strategies in Europe and Africa?

Nowadays circularity is key for the energy sector, whose players are trying to comply with it to contribute to the energy transition and net zero. Energy players are occupying a central role in the energy transition for the European and international scenario whereregulators and international bodies are including clean energy as a key enabler of circularity – which is promoted for example by the EU Green Deal and its Circular Economy Action Plan (CEAP) and required as an objective of the EU Taxonomy.

Then, according to the most recent market trends, energy players are shifting towards circular business models to gain competitive advantages and resilience and reach carbon neutrality, focusing for example on the generation of renewable energy, with a massive deployment of wind, hydro, solar, and geothermal power technologies to decarbonise the sector; a more efficient use of scarce materials and batteries by recycling and reusing them; the reduction of waste through its use for energy generation; the creation of circular supply chains and partnerships, the strengthening of energy recovery and bioenergy development.

3.It is reasonable to say that more and more companies are embedding circularity into their businesses/sustainability reports. What is the point of view of a consulting firm like AFRY on this shift? Does it make economic sense for companies in the energy sector?

 In order to boost the adoption of circular economy investments and practices, it is fundamental to establish a strategic and economic link between circularity and business. AFRY believes that this link is present, as circularity creates value and allows costs savings for energy players. Thanks to our projects, we have experienced how circularity – if correctly implemented in the strategy – allows energy companies to save energy and resources, get financial benefits, increase their competitiveness by applying future-proof business models, ensure legal compliance with current and future regulations and boost customer loyalty through repeated customer contact, as most important benefits.

 4.     What are the main takeaways from your recent experience in advisory services on circularity for companies of the RE value chain?

RE value chain assumes a key position within the circularity concept, as it can provide strategic resource efficiency solutions, decoupling economic activity from the consumption of finite resources.

In order for RE to be a genuinely clean energy source, solar, wind, and battery technology must be manufactured, used, and decommissioned in a responsible, secure, and sustainable manner. According to AFRY’s recent experience, this will require the entire supply chain and product lifecycle to adopt circularity principles that can be summarised in the following takeaways:

1.Design, procurement, and supply stages can be adapted with circular inflow and outflow solutions with the utilization of renewable and recycled material input and resource efficiency to avoid extraction of fossil and finite resources, and reduce the amounts of resources used

2. Manufacturing, distribution and operations can maximize utilization of resources by enabling sharing and service concepts to extend manufacturers responsibility and avoid the manufacturing of new products. At the same time, these three stages of the value chain must leverage on longevity solutions: the value preservation by repairing, maintaining, and reusing of products (internally or externally) and remanufacturing of components

Therefore, we strongly believe that RE value chain is fully impacted by circularity, which requires players to adopt newer solutions over their business models.

5.     Are there successful stories In Europe that could be replicated in Africa?

AFRY is constantly involved in projects towards the energy transition and circularity. Most of these projects have been developed in Europe, where players’ needs for decarbonisation are at the highest but could be replicated in Africa, considering the enormous potential of the African continent in terms of RE. In particular, AFRY has conducted both successful circularity market studies – to understand key enablers of circularity – and strategic assessments – to implement circularity into business models.

For example, we recently conducted a strategic circular economy assessment on the energy sector in Finland, clarifying the role of the energy sector as part of a wider circular economy society and to highlight the key barriers and challenges to the realization of the circular economy from the perspective of energy sector. Transition to circular economy requires close cooperation between sectors and, above all, a common understanding and vision of the necessity of the circular economy as a basis for society. To this extent, our study identified system-level optimization, new technologies, capabilities and operational models, ownership and business models, partnerships and cooperation, and utilization of data as key areas of enabling the circular economy within the energy sector.

This kind activities shall be prioritized and replicated in Africa, in order to better assess market potential for circularity prior to investments.

Furthermore, strategic projects on circularity can be further replicated in Africa to improve international and local players circularity. For example, a European energy player was recently willing to understand all the options available to manage wind blades at end-of-life, with a focus on novel and circular models. AFRY analysed volumes of wind blades that are expected to be dismantled in the next years in most relevant geographies (Italy, Germany and Spain), as well as the client-specific situation. Different approaches to wind blades end of life management (re-use and repurposing, sale on secondary market, recycling & recovery etc.) were presented, assessing also grade of maturity, scalability, future potential and sustainability. The project has provided the client a detailed overview of the wind blade second life, giving all the main elements to define a future internal strategy to tackle the problem. Thanks to our solutions, the Client has been able to boost its awareness towards circularity, spreading its compliance with EU regulations (e.g. EU Taxonomy, CSRD/ ESRS, EU Green Deal/Circular Economy Action Plan) and strategically integrating between strategic corporate and sustainability objectives, with Circular Economy as a strategic positioning tool.

Considering the importance of RES players in the African Continent, strategic market assessments on circularity prior to investments, as well as strategic projects on material circularity could be successfully replicated.