Waste not, want notJune 2015
As head of circular economy at Veolia, Forbes McDougall is at the heart of the UK’s efforts to transition to an economy that puts a greater value on waste. Here, he explains what that means in practice – and why companies must start building longer-term relationships with their resource management suppliers. Tom Idle reports
Later this year, an enormous 14,000-tonne oil rig currently situated in the middle of the North Sea will be dismantled. However, it’s various components – from steel and iron, to cranes and electrical items – will not be sent for scrap or thrown into landfill. The large majority will be recycled, re-sold, re-used or re-furbished. In fact, the company charged with leading the recycling effort, Veolia, has set a goal to recycle some 99.7% of the oil platform structure.
“There’s so many components on the oil rig: winches, water pumps, cement pumps, lifting equipment, hydraulics, generators, engines, drilling equipment, compressors, tanks and all sorts of pipes and valves,” says an excited Forbes McDougall. As Veolia’s head of circular economy for UK and Ireland, Forbes is charged with helping to set out a strategic plan for maximising the value of all assets in the business.
Oil-rig decommissioning is a relatively new market for Veolia. But with 600 similar platforms in the North Sea coming to the end of their life within the next decade, it’s a £1 billion a year market Veolia is keen to develop expertise in. And it’s a good example of how the business continues to transition – from the waste and treatment business it was ten years ago, to the resources management organisation it is today.
McDougall couldn’t be happier. An environmental engineer by training, he has spent a career focused on how organisations can manage their waste better. Before recently joining Veolia, he spent 17 years at Procter & Gamble, the last seven of which were spent inside the group’s purchasing team from where he wrote the consumer goods giant’s zero-waste to landfill policy. His team’s efforts to ‘find worth in waste’ created $1 billion in value to the business.
Today, his job title echoes that trendiest of sustainable business buzzwords: the circular economy – something McDougall says is “coming of age”. “If we keep growing as we are and humans keep consuming at the same rate, we are going to run out of stuff. We must move from a linear model to a circular one to keep valuable, non-renewable materials within our sphere of influence,” he says.
“It’s a natural extension of getting value from recyclables; and as an industry, we’re getting pretty good at that having stepped up to the plate during the last ten years. But to get even more value, we now have to go after materials that were previously just disposed of. Now, it’s about tackling the really difficult stuff.”
Part of the solution, says McDougall, lies in companies adopting alternative resource management models that move away from dealing with multiple suppliers for multi sites, to single suppliers across sites to get economies of scale. And they need to have a strategy other than trying to squeeze suppliers purely on cost. “It’s also about having longer-term relationships that allows those suppliers to invest in innovation, or partnerships to help enable those investments to be made.
“You need this stuff to get over the final hurdle. Everybody can do the low-hanging fruit; that’s relatively easy. But when you are trying to go from 70% to 100% diversion from landfill, it gets really challenging.”
So, what are the likes of Veolia doing to enable this circular economy to be realised? What does it look like in practice? McDougall has lots of ready-made case studies up his sleeve. And he’s proud of them. He describes a new project of closing the loop on old plastic bags called Bag2Bag where they turn old unusable bags into new bags giving them a second lease of life. Paper that is too contaminated to be recycled would not have had an outlet in the past. However, now the company has found a solution to dry it and turn it into insulation for homes or biodegrable pots.
And it’s working closely with Dairy Crest where Veolia were commissioned to find a solution that would reduce their carbon emissions and make their factory more energy efficient. As part of this process they needed 100,000 tonnes of steam for the pasteurising and drying of the cheese process. Veolia installed a biomass steam plant fuelled by wood pellets produced from life-expired wood that had been thrown away by the construction and manufacturing companies. As a result Dairy Crest reduced their emissions on site by 60%.
No wonder McDougall is proud. “Five to ten years ago, the waste guys turned up in their fluorescent jackets and took the waste away. Now look at what is possible!”
Yes, it’s a perfect example of circularity in action and it’s a series of processes that are “eminently re-applicable across the food and drink sector”. So, why aren’t more companies going down this route –especially given corporate pressure to cut energy, waste and water bills? McDougall has an answer. “It’s difficult.” The other challenge is cost; as Forbes acknowledges, developing circular processes and investing in new technologies is expensive, especially with most companies demanding a return on investment within five years.
Studies by the likes of the Ellen McArthur Foundation (which suggests a shift towards a circular economy could generate $500 million in material cost savings within five years) are all well and good, says McDougall, but they “tend to miss out what needs to happen in the short or medium-term”. He hopes that case study examples, such as the dairy innovation, will help to scale up action as the “value becomes more apparent”.
“Circularity is complex. Talking about it is easy. But getting projects up and running, with the economics stacking up and the engineering right – that’s the difficult bit.
“It’s going to be a long road and we will need many different actors – not least consumers – to buy into it,” he adds. “But the future looks bright.”
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