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Circular Taiwan for Future Forum

Circular Economy Taiwan Expo 2018

The ECCT’s Low Carbon Initiative (LCI) was a supporting organiser of two forums arranged during the Circular Economy Taiwan Expo 2018, organized by the Taiwan External Trade Development Council (TAITRA) from 19-21 September 2018.

The forum was organised by the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs (MOEA) and co-organised by CommonWealth Magazine and the ECCT’s Low Carbon Initiative (LCI). It was one of three forums held during the Circular Economy Taiwan Expo 2018 from 19-21 September 2018. The forum featured opening remarks by the guests of honour followed by a keynote speech and presentations from representatives of three LCI member companies.

The guests of honour were James Huang (Chi-fang), Chairman, Taiwan External Trade Development Council (TAITRA); Ni Kah-haw, Chief Secretary, Bureau of Foreign Trade (BOFT) and Shih Yen-shiang, Chairman, Sustainable and CE Association. The keynote speaker was Olaf Blaauw, Circular Economy Specialist and Strategic Consultancy. LCI speakers were Jay Mao, General Manager, Michelin Taiwan; Joy Ho, Managing Director, Unilever Taiwan/Hong Kong; Hugo Asplun, Deputy General Manager, IKEA Taiwan and Thanindra Virarusme, Purchasing Office Manager, IKEA Taiwan.

In his opening remarks James Huang said that many global industry giants are already moving towards circular economy models and progress has already been made toward the transition. The circular economy is part of the government’s 5+2 industry development initiative. Developing circular economy business models is especially important for Taiwan given its lack of raw materials. It is the government’s vision for Taiwan to become a hotspot of the circular economy. In his remarks Ni Kah-haw noted that past development in Taiwan had overexploited natural resources and damaged the environment. The government’s goal is to turn waste into resources to reduce the use of natural resources through comprehensive laws and development policies. In his remarks Shih Yen-shiang, Chairman of the Sustainable and CE Association, made the point that the circular economy has to make economic sense.

Keynote presentation

Topic: Current circular economy development in The Netherlands

Speaker: Olaf Blaauw, Circular economy specialist 

The Holland Circular Hotspot is a private public platform in which companies, knowledge institutes and (local) authorities collaborate internationally with the aim of exchanging knowledge and stimulating entrepreneurship in the field of circular economy. The aim is to make the circular economy important before it becomes necessary by creating viable business opportunities. The speaker stressed that if circular models don’t make money they won’t work.

The Holland Circular Hotspot arranges activities in many countries including the US, Japan, Indonesia and Taiwan. It has also signed MOUs with Taiwan to speed up the transition.

It publishes best practices and practical business models explaining in detail how to implement circular solutions. Policy instruments are shared with foreign governments and aimed at finding the appropriate solutions for various countries.

Taiwan is the Holland Circular Hotspot’s first partner in Asia. In June this year the Holland Circular Hotspot and the Taiwan Circular Economy Network (TCEN) signed a Memorandum of Understanding (MOU)  under which they will share, amongst others, tools, insights and best practices in the field of business, government and knowledge. They will also align events and exchange market opportunities.

The circular economy is necessary because constant growth through the linear model is not sustainable. The aim of the circular economy is to eliminate the concept of waste altogether, not just reusing waste materials. According to the speaker, the power to change lies with cities. He said that we need to stop optimising our current failing linear system, which, although well organised and optimised for profitability, is depleting the earth’s scarce resources. What we need is regenerative or restorative economy powered by renewable energy.

How do we get there? Governments must set the stage but individual companies need to take action to integrate their different interests. There are a lot of initiatives moving in the right direction but also a lot of mistakes being made. If done properly, the circular economy costs less money because if you design products properly the value is retained even at the end of a product’s life. This actually lowers costs to consumers and gives a bonus to enterprises.

There are many examples in Taiwan of moves towards circular models. Taipei has taken a bold step on road to circularity for example in adjusting financing for public housing. The Taoyuan aerotropolis was originally just a new development but now authorities are thinking about making it a circular development. In Tainan City the government is looking at circular living in the Shalun area.

According to the speaker collaboration is key. We should not try to outcompete one other. Collaboration will create much better solutions than going it alone. Designs must be value-based not transaction-based. When financing is correctly planned, circular models will always outperform linear ones, he said.

Topic: Circular Now, Bright Future

Speaker: Jay Mao, General Manager, Michelin Taiwan

According to some estimates natural resources could run out by 2035. Michelin is looking at all aspects of tyres, from the use of better materials to production efficiency, use and reuse and recycling. It has done this throughout its history by constantly upgrading its designs and use of materials and its focus remains on reducing, reusing and recycling.

Design innovations are focused on reducing the use of materials and weight of tyres and improving the quality and durability so that they can be used for longer distances and use less fuel. In terms of reuse, tyres from trucks are refurbished for reuse while used tyres can also be ground into powder to be used in cement, rubber and construction materials. The group’s aim is to recycle 75% of tyres by 2035 and 100% of tyres by 2048. At present up to 28%  of materials used in manufacturing are recyclable materials. The target for 2048 is 80%. The company is also looking into alternatives to the synthetic, oil-based materials used in their tyres. The company launched the programme “Bio Butterfly” to investigate the viability of organic materials like straw, beets and wood to lower the environmental impact of their products.

Topic: The role of Unilever in the circular economy

Speaker: Joy Ho, Managing Director, Unilever Taiwan/Hong Kong

Unilever has 400 brands that are sold in 190 countries. The company has been in Taiwan for 30 years. The company’s first product was soap to improve hygiene. Today, there are still large parts of the world where people do not have access to clean water and food.

In terms of Unilever’s solutions to ensure sustainability and to decouple growth from the impact on the environment, the company’s main goals are: to improve public health by creating products that use less water for cleaning, provide healthier balanced and nutritious food products (with enough nutrition, less sodium, sugar and fat) while minimising the damage to the environment by using fewer resources, reducing waste and turning waste into resources and addressing unemployment by helping people to make a living, in particular, help women to make a living and increase their status in family and society. The company’s goals are aligned with the United Nations Sustainable Development Goals.

According to the speaker, in 2017, the company had reached 80% of goals that were set.

The first is to do with waste reduction by reusing materials for roads, wallpaper and furniture and reducing the amount of packaging used. By 2025 the company’s target is to make its packaging 100% recyclable and use recyclable materials to make 25% of its packaging materials. Other initiatives include making biodegradable tea bags made from corn and reducing food waste by using green tomatoes to make ketchup, which has resulted in a 10% reduction in the volume of tomatoes previously discarded as food waste.

In addition the company is asking its suppliers to have 100% sustainable procurement and use sustainable farming methods. Instant soup packages and vegetables used are free of chemicals (by using biofertilizers).

There a lot of benefits to the circular economy for companies like Unilever. It lowers the risks of quality problems, is good for soil quality, lowers costs and increases trust in the brand, all of which result in higher growth.

Topic: Making Ikea it a circular business

Speakers: Hugo Asplun, Deputy General Manager, Ikea Taiwan and Thanindra Virarusme, Head, Ikea Taiwan Purchasing 

This year Ikea celebrates its 75th anniversary. The company still maintains its basic goal of providing good quality furniture for an affordable price. However, the issue of sustainability has been taken seriously at the company for decades. As far back as 1976 Ikea founder, Ingvar Kamprad, described the waste of resources as a “disease of mankind”.

These days Ikea is going much further than before towards making its operations circular. While Ikea has been incredibly successful to date, the next 75 years will not be the same. The company realises that it needs to change for the mobile era and become circular. By working with the right partners, things can be done differently. Ikea has set a goal to be climate positive by 2030. The change enabler is becoming circular. Besides making its own operations circular, the company is also promoting circular consumption. Every product should have an expected lifespan and 100% of products must have circularity while 50% of products must be made from recyclable materials.

Like previous speakers, they made the case that circularity is profitable. In addition to reducing costs, circularity reduces risks and strengthens the brand. The speaker gave an example of Ikea sofa. Under the traditional business model, the relationship between Ikea and the customer ends when the sofa enters the home. However, there is an opportunity to prolong relationship and increase the sofa’s value. If it gets dirty or damaged, it can be repaired. If the customer wants to move to a smaller or larger home, they might want to change their sofa to one of a more suitable size. They may also want to change the colour or style. Ikea can help customers with all of the above options. They could also help customers to sell the sofa or offer lease options for limited periods. When the sofa reaches the end of its life, Ikea can refurbish it or reuse the parts to make other products. Ikea is already doing this in Belgium. In Taiwan the company has started a “take back” service for matrasses in Taiwan and looking for partners in Taiwan to expand this type of business.

Ikea is also a leader in addressing exploitation of labour, especially in the form of brokerage fees imposed on workers, which often results in debt bondage. Since 2014 Ikea has insisted that workers throughout the supply chain pay zero fees.

To reduce the use of resources, Ikea’s designers are working on designs that have the least impact on the environment by using, wherever possible, recycled materials. For example, they are making high quality cabinet doors from wood chips and recycled plastic. In Taiwan, many products are made from biodegradable or recycled materials and bagasse. The company is already selling its bioplastic bags made from sugar cane.

Circular Economy Forum: The difficulties and solutions to enter foreign eco markets

Date: 21 September 2018

This forum provided solutions and guidance for Taiwan's SMEs to enter foreign eco-markets. Speakers from TÜV Rheinland, the Environmental Protection Administration (EPA) introduced certifications, purchasing legislation, and CE regulations for the EU, Australia, and the UK.

Topic: Trends in global environmental protection – Taking EU environmental protection directives as examples

Speaker: Carl Chang, TÜV Rheinland Taiwan

The environmental protection labelling of green electronic products has been mandatory rather than voluntary since the EU’s RoHS Directive went into effect in July 2006. However, the trend toward green products did not stop here. The REACH regulations secure consumers’ right to know about hazardous substances in products. The EU will also limit the use of four plasticizers with the upgraded RoHS to be released in July 2019. RoHS is being adopted by an increasing number of countries around the world as a mandatory requirement. The fashion, fabric, and shoe industries, among others, are beginning to mandate zero emissions of chemicals from their products. That is, the eco-protection concept of source control is now being practiced from the product design stage.

The global green product wave has been having an impact on traditional supply chains for many products over the last 10 years. Taiwan, a key player in global supply chains, has no way to get around the new normal. It is necessary therefore to learn about relevant international requirements and to build up communication channels and mutual trust throughout the supply chain and ride the crest of the wave in the green product revolution.