Date: 9 – 10 October 2015
Venue: Aula Magna Sofia University, Tsar Osvoboditel blvd 15, 1000 Sofia, Bulgaria
organized by

First of all, I would like to thank Prof. Chobanov and the Club of Sofia for inviting me to speak at this conference. It is a great honour to be able to exchange ideas with you and present you my view of the potential of a sustainable economy.

I already had the opportunity to give you an insight into the world of Blue Economy in 2011. I would like to do this again and present you the newest developments and solutions of this economic approach.

From Recycling to Blue Economy

To discover the dimension of the potential at hand, we have to remind ourselves of our role in the history of this planet. We are the blink of an eye of evolution, and in this blink of an eye have managed to manouver humanity to the brink of our own extinction. The earth revolves on, whether humans play a part in the future lies in our own hands and actions, and in our way of doing business.

Let us have a look what a vision for our society and businesses could be. Nature is a great support in this. For in nature, there is no waste, there is only abundance as all resources are used.

The tree which loses its leaves in the fall does not glue them back on come springtime. They serve as food for worms and mushrooms, thus turned into nutrients in the soil for the green and fruits of the next spring. All organisms create a symbiosis, a cycle in which everyone benefits. On top of this, ecosystems constantly increase their efficiency. Ever more and ever more complex organisms and interactions are supported.

Human economic activities are different. Our traditional products generate waste. Endless amounts of waste which are not used. Your cup of coffee leaves 99.8% of waste behind, only 0.2% end up in your cup. The rest is lost on the path from the coffee plantation through harvest of the beans, separation from the pulpa, roasting down to the last large waste position, coffee grounds. Most of the waste remains unused. The coffee grounds are at best composted, whereby the caffeine content presents a serious challenge to worms and other organisms; at worst, the coffee grounds end up in landfills and add to the generation of methane in the atmosphere.

Even if you can’t imagine this from a small cup of coffee, we are not talking about small amounts. The global trade volume of coffee as one of the largest commodities in the world is roughly 8 million tonnes per year. In coffee grounds, this is even more, due to the high water content.

But there are alternatives – more on that later.

Since the 1980ies, the popular antidote has been recycling. Recycling means collecting waste, cleaning and purifying it, and then basically turning it into the original product again. Glass remnants become new glass, used paper becomes recycled paper. Once in a while, the diligently collected plastic waste don’t become yoghurt cups but park benches.

Collecting the residues is generally right and without alternative. However, conventional recycling processes are expensive and in themselves resource intensive. Just cleaning the collected waste often requires large amounts of water and energy. Add the fact that recycled products are often inferior – recycled paper for example does not reach the quality of a fresh pulp paper product.

A sensible, at least complementary alternative appears to be upcycling. Upcycling means to combine waste into new products and designs, often from another industry. Old tyres become shoe soles, fishing nets become carpets, can tabs are turned into bags and even clothing, the same is true for textile scraps which are processed into stylish clothes by designers.

This extends the duration of usage of materials, but it does not solve the problem at the end of life and how to dispose of these materials safely.

Interestingly, recycling was often not worthwhile to begin with, but rather a politically motivated and prescribed process. To this day, it is political regulation that has created business models which are economically not viable. Consumers are asked to pay more for recycled products of often inferior quality. → Recherche: wo lohnt sich Recycling?

In cases where certain resources are scarce on our planet and raw material prices are rising, recycling becomes an economic alternative. Political prescriptions for environmental reasons attempt to look ahead and protect important resources, thus placing recycling several years ahead of such market developments.

Upcycling usually originates in creative processes. Often the products created are few in number and available to a small niche of customers who enjoy the creative result. In developing countries, the perspective is different. If access to new shoes is limited or barred due to prices, shoes from old tyres are a financially sensible alternative – especially compared to having no shoes at all. One of the most sustainable companies in the carpet industry, Interface Flor, uses old fishing nets as a component in their production, thus creating an industrial example for upcycling.

The consequent next step after upcycling is to use all resources at the end of a product’s life cycle to create new products. This implies that during the process of production, the reusability at a later point in time is part of the design of a product. This creates a closed cycle, which has lead to the term Circular Economy.

One example is the insulation of car doors, which contains 10-15% hemp. The doors are constructed in a way that the insulation can be removed when the car is scrapped and used for further life cycles in new cars. Circular Economy has become a political demand and must now turn into a business principle. The consequence is that everything used in a product can be used further. No change however results for the up to 90% of waste created during the production process itself.

A second green perspective is focused on production. How sustainable, environmentally friendly and fair is the product produced? This is where environmental policies, social standards and many voluntary quality criteria come into play. The aim is to improve production processes to achieve more sustainability. In general, certain social and ecological costs are avoided: workers are paid fairly, pollutants don’t enter the environment, etc. Economists would say, that externalised costs are being internalised. Usually, this leads to more fair and sustainable products, but also to higher prices only a limited amount of consumers can afford.

It seems hard to imagine that we can base an economy which is resource-friendly and eco-friendly on Recycling and Upcycling. The more expensive products of the green economy alone also don’t seem to achieve the necessary change in how we deal with resources – they use them better, but demand a voluntary contribution from consumers to chose these less harmful products.

Both approaches rely either on regulation or voluntary choice. During the decades that both have been in place, our ecological challenges and the exploitation of resources have grown. So the change in awareness necessary for consequent consumption and regulations has not taken place, and we cannot force the mindsets to change. The question is: is there an economic alternative? An alternative, which offers economic reasons to apply a more planet-friendly behaviour?

Free market economies thrive on innovations. Consumers are attracted by new or cheaper variations. If the market offers products with no or lower environmental impact, at a competitive price, this would lead to the necessary change at a large scale.

This does not require a voluntary or forced change of behaviour, but merely the decision to buy a better product at the same or at a lower price. The main argument is product quality and not the allegedly imminent end of the world.

Is there a possibility to fill this third option with life? Business so far is focused on producing each product as efficiently as possible and has achieved major improvements regarding the input of raw materials, effective production, logistics, etc. The result is still that resource-friendly products are more expensive. The advantages of conventional production which transfer the environmental and social cost to other countries cannot be outperformed. The calculation remains the same: if others bare the cost, consumers don’t have to pay (at least not now).

And if we imitate nature? Think in ecosystems? Then every waste is considered a resource. It becomes an input to a new project or product. And everything which originates from this process is used further. Following this train of thought, we no longer throw away 90% of our materials, we use them. In other words, we intensify the usage of existing resources, we make more from what we have. At the same time, perspectives change. The focus is no longer the individual product which is produced, but many very different products which result from the same raw materials.

Cascading value chains

These products and their combination become competitive from a systemic perspective. Not every possible usage of a waste product is profitable using today’s technologies. We have to chose and connect those technologies and applications that result in a cascading economic value chain.

Let me give you three examples:

1. Mushrooms on coffee grounds

We already spoke about the 16 million tonnes of wasted coffee grounds we produce every year. What I did not mention: coffee grounds contain fibers, which are ideal for the growth of gourmet mushrooms. More than a dozen young companies in the EU and North America now collect coffee grounds, grow delicious, protein-rich food, and then use the waste as compost – the caffeine has been decomposed by the fungus.

2. Closed Loop Farming

When designing entire systems, we discover opportunities which were previously disregarded. Take farming. Today, monocultures are treated with fertilizer and pesticides and still result in soil degradation. Dairy farms produce millions of tonnes of harmful manure, then spread them on the fields again, releasing greenhouse gases into the atmosphere and poisoning the ground water. Instead, we can run biogas plants on 100% manure, creating energy (both heat and electricity), fertilizer and fish. Why three products? The excess heat is first used to dry the digestate and thus turn it into compact fertilizer. The then remaining heat enables the production of warm-water fish in aquaculture even in Scandinavia, reducing the load on ocean fisheries. We can even go further and grow algae in the waste water from the fish, thus cleaning the water – and then feeding the cows with the protein-rich algae drink. This is already done today – future innovations may include first generating bioplastic from manure (currently at prototype phase), fully plant- and insect-based fish feeds, and much more. And we thought it was a problematic waste!

This shows an evolutionary principle: a new perspective opens up opportunities. This results in cost avoidance, since some resources (in our example heat energy) are for free and other costs such as disposal cease to exist.

3. A High-Tech example: Biorefinery

The oil industry has set the example with their refineries, which created entire industries and hundreds of products in cosmetics, food and of course transport based on crude oil. The same path must be taken with organic materials that do not compete with food. Bio-refineries can turn organic waste into a vast range of products and at the necessary scale replace oil-based materials. To begin with, biorefineries are specialised technologies to make better use of organic waste in cascades. This requires systemic thinking, as many interacting processes need to be considered. The same is already happening in the chemical industry today, which is why most prototypes of bio-refineries built to date are run by experts in chemistry.

Experts from different fields and areas work together in one company, serving dozens of markets and cooperating to achieve the optimal output.

I am coming the my closing words.

The three approaches I presented, Recycling, Green Economy and Blue Economy, do not exclude one another. They are part of an evolutionary process toward a smarter handling of our resources. When at first we realize that resources are finite (feineit), saving and longer usage are the first reactions. At the same time, Green economy focuses on externalised costs and delivers more fair and environmentally friendly products, but requires a conscious consumer with the necessary cash to pay a higher price.

Multi-level, cascading value chains follow the example of ecosystems and ideally make use of every input. The potential is amazing: if we manage to eliminate waste, we can intensify the production of food and goods in line with the growing world population while protecting our planet. The paradox is that this intensification is the key to avoid environmental costs at a previously unknown extent. The logic is so simple we need to say it again: if we throw away 90% of the 100% raw material input, and then use this waste completely, we can increase production ninefold – without further exploiting natural resources.