Steps from Zero Carbon Supply Chains and Demand of Circular Economy to Circular Business Cases

Abstract

The European Green Deal requires a zero-carbon Europe until 2050. Consequently, all processes conducted, and actions taken need to ensure zero carbon emissions. Beside the areas of energy systems, logistics and living, it certainly also includes industry sectors, industrial processes and their entire supply chains. Zero carbon supply chains mean net zero carbon emission from scope 1, 2 and 3. The key question for future business is therefore how to reduce the carbon emissions of all procured components down to zero, beside all procured and consumed energies (scope 1 and 2). A promising approach is a circular economy, if primary produced materials will not be provided carbon neutral or will increase in price. However, today the development of circular business models often is a chicken and egg problem. It needs a clear business case to invest into changes, adaptions, substitutions or life cycle system adjustments of linear products (take, make, dispose) to turn them into circular products or product systems (avoid, re-use, recycle, recover).  The paper presents approaches to support companies seeking carbon neutral products in a carbon neutral Europe via identifying business cases for circular products. An evaluation matrix is presented allowing the identification of circularity status depending on the selected products or sector perspective. The matrix contains evaluation criteria based on the circularity building blocks by the Ellen MacArthur Foundation. Based on the results, hot spots and weak points are identified and allow entering a six-step-approach for business-case identification. The steps refer to life cycle thinking, quantitative environmental assessment, simulation, creativity methods and end up identifying profitable business cases for circularity. The presented approach combines life cycle assessment, circular economy and the development of business models and is partly developed and applied during the European H2020 project AVANGARD.