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Circular economy development in Taiwan

The ECCT's Energy & Environment committee hosted a lunch with guest of honour Charles Huang, Chairman of the Taiwan Circular Economy Network (TCEN) and featuring a presentation by Shadow Chen, CEO of TCEN.

The speaker spoke about some recent circular economy developments in Taiwan and activities undertaken by TCEN, whose mission is to promote the concept of a regenerative and restorative economy and facilitate a roadmap of efficient resource use. After her presentation she answered some questions from the audience, together with the guest of honour.

Taiwan has a high population density and not enough resources to support the population. It imports 98.8% of its fossil fuel, 98% of its metals and 71.8% of its biomass needs. As a matter of security and competitiveness, resources need to be managed more effectively. The objective of the circular economy is to manage resources in the most efficient manner.

Taiwan has 20 years of experience in recycling and its recycling rates are now comparable with those of Europe. However, there are still problems such as pollution, illegal factories and waste. According to Chen, the capacity of Taiwan’s landfills for industrial waste will run out by 2020. This illustrates the urgency of going beyond recycling and adopting a more comprehensive and systematic approach. The circular model is restorative and regenerative by design and aims to keep products, components and materials at their highest utility and value at all times.

The government has acknowledged the importance of the UN’s sustainable development goals and highlighted the circular economy as one of the areas for future industry development in its 5+2 innovative industry plan. However, placing the circular economy as a separate category, as though it is another industry, is a misrepresentation of the concept: the circular economy is not a new industry per se but a concept that needs to be integrated into all industries.

For example, instead of focusing on producing smart machinery (another of the 5+2 industries), new business models should be developed that, instead of providing smart machines, provide smart machinery as a service. While the government has set modest goals for reducing waste and increasing recycling rates, these do not go nearly far enough.

Charles Huang made that point that the linear business model has been used since the industrial revolution and it is difficult to promote circular models, especially among businesses that have been successful using a linear business model.

It will therefore take time for the circular concept to catch on. The biggest challenge will be convincing business to change, something which is difficult given the fact that they have, until now, reaped the profits from the linear model while externalising the costs (waste of resources and pollution) to the environment and the public. Huang made the point that most of these companies would not be profitable if they had to internalise the real costs to the environment and the public (such as the healthcare costs as a result of pollution).

TCEN, founded in 2015, is a leadership initiative in Taiwan that brings together governments, businesses and NGOs to facilitate the transition to the circular economy. It acts as an intermediary between government, academia and industry to bridge gaps in the regulatory system and to link compatible companies together. TCEN is working to promote circular business models through pilot projects.

The government is supporting the development of the green economy by taking action on the four pillars of green growth: legislation and regulation, market incentives, innovation and networking. On 1 June this year, TCEN invited industrial representatives to sign a “green” deal in support of creating a circular economy. As part of this, three industry alliances have been set up in the areas of plastics, electronics and construction aimed at finding opportunities to create circular partnerships, where one company’s waste can be another company’s raw material. Since then other alliances have been set up to address sea waste and the solar energy industry.

An excellent example of a mutually-beneficial circular partnership is the relationship between CPC Corporation (formally China Petroleum) and China Steel whereby China Steel sells excess steam to CPC, for use in its chemical manufacturing process, making use of what would otherwise be wasted energy to generate revenue of NT$2 billion for China Steel.

State-owned Taisugar, Taiwan’s largest agricultural producer in Taiwan, is a circular economy practitioner. It aims to get 100% of its energy needs from renewable sources in five years through a biogas initiative (using manure from pig farms to produce biogas and compost). The company is using sugar cane residue for growing mushrooms and also collecting and making use of discarded oyster shells.

Taisugar is building a circular village comprising 429 households. A circular approach will be adopted for building materials and the village will make use of urban farming, renewable energy, sophisticated water and waste management processes, among other initiatives, in order to be as circular as possible.

TCEN has also been liaising with the Taipei City Government in the design of its social housing project in Nankang, with the aim of using the most suitable building materials, designing for modularity and sustainability and adopting a product-as-a-service model for air-conditioning and furniture. It wants to extend this concept for the renovation of schools in the city.

Huang conceded that there is a long road ahead but that mutually-beneficial collaboration is possible and that it is possible to decouple economic development from the depletion of resources. TCEN’s priority for the way ahead is to find and enable more workable circular collaborations between companies and other stakeholders.