What is the Circular Economy and Why is it Important?

This article was written for LightLines, the journal for the Society of Light and Lighting and appears in the May/June 2020 issue.

The typical way that we think about the things that we use assumes that we keep something for as long its helpful to us, after which we throw it away. How it gets thrown away rarely enters the consciousness of the user/disposer.  What that has meant across the generations is that we have continued to extract materials from the planet rather than consider what happens when those materials run out.

The Circular Economy takes a wider view. Just because one person has finished with a product does not mean that there is no value left in the product. When we’ve ‘finished with’ a motor car, we understand that there could be a lot of residual value left in it and, rather than scrap it, we sell it on at a lower cost. That is the beginning of the Circular Economy process . . . though nowhere near the end of it.

As products age, some components wear out and need to be replaced, and if there’s one aspect of the Circular Economy that has already had an influence on product design it’s the idea that goods should be repairable. As long as the product in its entirety can continue to be of service, it will have a useful life. Its what happens at the very end of active life where the true Circular Economy can be seen.

The climate crisis has brought materials exploitation into sharp relief. The growth of the recycling industry as an answer to re-purposing spent materials was a great step forward – provided no one looked at the energy that was required in that re-purposing. For example; aluminium is one of the most re-used metals on the planet. Its reckoned that 75% of the aluminium that has ever been processed is still in use. Unfortunately, there is an energy cost that comes with that. An exhausted aluminium component goes for recycling; that involved smelting the metal to create a stock billet that can be sold and re-used – and that takes energy. When the aluminium billet is then smelted (again) to create another component, that takes yet more energy. But what if the original component still contained residual value? Isn’t there a way that the component can find it’s way back into the production stream directly?

That new attitude to used components is at the heart of The Circular Economy.

Why has it become important in the lighting industry?

Historically, we have always had a version of the Circular Economy within the lighting industry. The replaceable parts were the light source (let’s call it a ‘lamp’) along with any associated electronic circuitry. The luminaire body lasted for as long as it was needed – and that could be any number of iterations as the lamps were changed many times during its active life. Its why many of us have lighting fixtures in our homes that may be decades old.

The LED changed that view.It didn’t help that a lot of the new companies that entered the marketplace in the early years of the 21st century had little or no awareness of the fixture+lamp tradition. So it was that we have seen a generation of LED luminaires where the LED engine (let’s call it an engine for convenience, though it may just be an chip array on a PCB) was cemented into the luminaire body, which then doubled as the heatsink. And, because this is only an end-of-life issue, not many people worried about what would happen further down the track when the LED started to fail.

We are now further down the track and things need to change.

But its not a straightforward journey. There are questions about how deep a Circular Economy approach needs to go. Is this really just about being able to change exhausted components (LED engines and drivers) and not worry about the luminaire housing, or should we take a more principled approach that says that the entire luminaire should be capable of disassembly and that every component should become available for re-use?

The European Commission (remember them?) is currently exploring ways of supporting components re-use and it is looking to develop a set of standards that will define the principles, concepts and terminology that we can all use to ‘normalise’ Circular Economy processes.

In truth, there is no shortcut to this process. Trying to convince us that a luminaire body doesn’t need to be a part of the Circular Economy is another way of kicking the issue down the road – again. Most material use goes into the luminaire housing (by weight/mass). It’s in the housing where the core of the problem lies, so we can’t ignore it. Athough it’s not the only problem.

A currently unresolved problem is potentially more crucial to our future – or, at least, to the future of the LED. Whereas a luminaire housing is made up chiefly of aluminium and/or steel (though the industry is seeing more use of plastics, which is not a good idea), the LED engine and the driver are full of tiny amounts of rare earths and precious metals. There is currently no commercial (aka profitable) way – and in some instances no technical way – to recover those minerals and you might say that the most valuable part of the LED luminaire still ends up in landfill. That is crazy, but its where we are at the moment, and the situation can only become more problematic. At the moment we’re not seeing a lot of LED luminaires at their end of life – but watch this space.

How might we see the industry respond to The Circular Economy.

Happily, we’re already seeing some great responses by manufacturers. New ranges were expected to be launched at Frankfurt Light+Building this year (now let’s see what September brings) that demonstrate how The Circular Economy can be applied to commercial product. Other companies have realised that they’ve been working on Circular Economy principles for years and have found, at last, a reason to shout about it. As I say, this is by no means a new approach to product design; its more a case of refocusing on good design practice.

What’s not yet been resolved is how The Circular Economy operates in practice. Its one thing making a luminaire that can be disassembled, its another thing to create an economic model where such dis- and re-assembly can work. Most manufacturers are taking the approach that they will be the ones who retain control of their products, possibly via an upturn in the acceptability by clients of Light as a Service (LaaS). This is a reasonable attitude to take if we think in terms of large-scale projects where thousands of products are installed in a building, but it’s not the real picture. I have nothing to support these percentages, but let’s just assume that the total output of a lighting company might split 80:20 between lots of small-scale projects (80%) and a small number of large-scale projects (20%). If the manufacturers is only paying attention to the headline projects, then 80% of its output risk being ignored – and that is hardly a Circular economy model.

Using motor car servicing as a model we can see another way. Small, privately-owned garages are licensed to work on particular motor brands, and they effectively take the pressure off the manufacturers themselves. This is one way to envisage a future that contains the majority of a lighting manufacturers output. But we have to create a used-luminaire model alongside – and that’s going to take some effort.

At least we have a short amount of time before this becomes a pressing issue. Circular Economy fixtures are only just coming on-stream. It’ll be a number of years before the majority of those fixtures will require some kind of refurbishment. That’s the amount of time that the industry has to get a servicing sector in place.


The background to the Circular Economy

The modern concept for the Circular Economy came out of ‘Cradle to Cradle’ (2002) and ‘The Upcycle’ (2013), the influential books by William McDonough and Richard Braungart. They insisted that the linear cradle-to-grave approach was no longer fit for purpose and proposed a system of product design that ensured that materials remained ’in play’ rather than being lost to landfill.

The Cradle-to-Cradle philosophy influenced Ellen MacArthur, who saw the impact on the world’s oceans as a long-distance yachtswoman. She launched the Ellen MacArthur Foundation in 2010, dedicated to developing a Circular Economy.

MacArthur was invited to speak at the World Economic Forum in Davos in 2012.That led to  the WEF’s Platform for Accelerating the Circular Economy (PACE), launched in 2017 to develop financial models for Circular economy projects.

Those of us of a certain age will be aware that the Circular Economy is by no means a new idea, having grown up in houses where ‘best clothes’ turned into ‘work clothes’ before being turned into rags and dustcloths, and the garden shed was full of glass jars containing rusty nails and screws that would come in useful ‘one of these days’.

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