How much value is preserved in the economy when materials have been used for one cycle? In Sweden today, far less than could be the case, according to a new study; the potential value of circular material flows is enormous.

”Public statistics can lead you to believe that material flows in Sweden already are close to circular. But according to the report ”Ett värdebeständigt svenskt materialsystem’ (Retaining value in the Swedish materials system), we still have a long way to go”, says Per Klevnäs, Project Manager at Material Economics.

The new report states that inefficient use of materials is costing Sweden more than 42 billion SEK every year.

A huge value loss

In spite of high recycling ambitions, there is a huge loss of material’s worth in the life cycle of products. Photo: T. Brorson

The project, carried out in 2017, was a joint initiative between The Swedish Recycling Industries’ Association and Swedish industry and recycling companies. The key question it sought to answer was: For each 100 SEK of raw material entering the Swedish economy, how much value is retained after one use cycle?

”We have been able to calculate how astonishing the losses actually are, and to identify measures that could retain more materials value. Using materials for several cycles offers huge business opportunities”, Per Klevnäs says.

The value losses occur when material is lost, and when material quality is degraded. The research shows that plastic loses 92 percent of its material value after one use cycle. The reason is that the collected plastic often is incinerated; it may be contaminated, or different kinds of plastics are joined or mixed together. Steel, aluminium, cement and paper retain 25 percent of their value – in spite of the fact that much of the material could be recycled again without degradation.

”We are not making use of steel from demolished buildings, plastic from discarded packaging, or aluminium from scrapped vehicles. Only the materials examined in the report incur losses equivalent to 1 percent of GDP, or 10 000 SEK per household. We are measuring recycling in tonnes and cubic meters, but increased collection volumes does not translate to economic gain. If we truly aspire to make the economy circular, and to shift our focus from waste to materials production, we have to understand the economic value”.

”When we are talking about the value of materials, both industry and politics pay more attention. It is also important to provide environmental advantage, since a materials system that retains value is a better and more realistic way to substitute virgin materials”, Per Klevnäs says.

Materials are lost, quality deteriorates

The researchers analyzed the value loss for five different materials. The result is both interesting and worrying, but also shows that there is a lot of room for improvement.

Plastics – The report shows that plastic worth 10 billion SEK reaches end of use each year. As much as 84 percent of this plastic is burned or landfilled. 16 percent is recycled to new plastic, but then loses almost half of its original value, because quality deteriorates. Material recycling therefore retains only 8 percent of the total original value of the plastic. Even though more than 80 percent of end-of-use plastics is burned to produce energy, the value of that energy is just 5 percent of the original material value. Incineration also generates substantial emissions of carbon dioxide.

Steel – The researchers found that the steel material flow is well-managed – but nevertheless, a lot of value is lost. End-of-use steel worth 29 billion SEK becomes available each year, but the value of steel scrap processed to new steel is an estimated 9 billion. The difference is partly explained by downgrading of quality and the failure to recover valuable alloying metals.

Aluminium – A lot of aluminum is lost instead of being used again. About 30 percent is lost through lack of collection, process losses in recycling, and incineration as waste. Downgrading causes additional losses, especially when initially pure aluminium is mixed and alloyed, or handled in ways that result in large additional upgrading costs. The report states: “Overall, these losses paint a picture far from the common perception of aluminium as a material that entails a one-time investment in energy-intensive production, but can then be circulated and benefit the economy countless times.”

Other materials – Extensive value losses also occur within a variety of other material categories and product groups. For example, the researchers calculate a value loss for paper of 5.9 billion SEK per year. The reasons are mainly physical losses, lost fibre quality, and contamination. In the construction sector, very little demolition material is recycled except for metals, while losses during construction can amount to 15-20 percent of the total materials used. Global figures for textiles indicate that 13 percent of all textiles are recycled, but to low-value applications rather than to new textiles, and with significant loss of value as a result. There are many more examples from other material categories. Overall, the picture of large losses of value is a rule rather than an exception.

Challenges and opportunities

”A lot of metal is recycled, but there are challenges. For steel, a change is required to address the problems caused by the addition of copper to the steel stock. Swedish steel scrap contains 0.22 percent copper on average, which is close
to levels that would make it unsuitable for the production of important categories of steel. Currently, copper contamination is handled through downgrading to structural steel (which is more resistant to higher copper content) and through export to markets where scrap can be diluted with virgin steel. However, downgrading and dilution are
not long-term solutions, particularly as the share of secondary steel is set to increase globally. Copper cannot be removed once added”, Per Klevnäs says.

”There are similar issues for other materials, for a number of reasons. Companies generally lack the incentives today to design products so that materials can be retained. A ‘linear’ approach to product design explain much of today’s loss of value. Product designers and company managers learned their craft in a linear economy, and have acquired few tools for thinking in circular terms. The good thing is that it is fairly easy to find ways to preserve more material value by adopting a circular mindset; even minor changes in how products are designed, produced and handled can make major contributions”.

”We believe that a better material system is an exciting industrial innovation agenda for Sweden. Many companies are already evaluating systematically how their operations and production are affecting the society and the environment. One important step will be to look closer at what happens to materials when the products have been discarded; we are going to need better product design and recycling systems. This is a huge business opportunity and a challenge for industry and politics alike. A lot of today’s lost material value can be recovered”, Per Klevnäs says.

The article was published in May 2018.