The circular economy for organics

Is there a functioning circular economy for organics in Australia? The answer depends on how you define the concept, writes University of Queensland Centre for Recycling of Organic Waste & Nutrients Director, Johannes Biala.

In many sectors, including waste management and resource recovery the concept of ‘sustainability’ has lost meaning and credibility, with the very concept of sustainability sometimes having become a major roadblock to achieving better environmental outcomes.

At some point everything was sustainable, even landfills, yet at the same time, nobody wanted to foot the bill for bringing about real change, or maybe nobody really wanted a system that was truly sustainable, i.e. where meeting our needs does not compromise the ability of future generations to meet their needs.

I reckon that we have to admit that we as a society are miles away from meeting this goal, and the same is true for most of us as individuals.

Consequently, the waste management and resource recovery world replaced the ‘sustainability’ concept with the circular economy model, possibly subconsciously realising that reaching sustainability is mission impossible.

While I wholeheartedly welcome this shift to a more honest and attainable conceptual construct, this is happening too fast for my liking.

We are at grave risk of merely exchanging one buzzword for another without conceptualising and defining what we mean and what we want to achieve.

Admittedly, the circular economy concept is still scandalously ambiguous.

Analysis of 114 different definitions of the circular economy concluded that often they simply equate it with recycling, and only one third of definitions expound a “waste hierarchy”, whereas it ought to entail fundamental systemic change in business and industry operations, which only 40 per cent of the definitions included.

The authors presume that significantly varying circular economy definitions may eventually result in the collapse of the concept.

Wikepedia provides a very simple definition, stating that a circular economy is an economic system aimed at eliminating waste and ensuring the continual use of resources .

The notion of the economic system emphasises that (i) somebody has to pay if the outcomes we want to achieve are to be superior to current low-cost, low benefit options, and (ii) that a functioning economic system requires cooperation of a number of supply chain partners, each of which needs to be able to derive adequate benefits from being involved.

Accordingly, without wanting to provide a full-blown definition, I would describe the circular economy for organics as a self-sustaining organics recycling supply chain driven by demand and economic advantage where additional benefits and costs are shared in an equitable and mutually acceptable way.

Compared to other recovered materials that are much more complex to process and integrate into production and value adding processes, processing of organic residues and production / use of recycled organic products is relatively simple and already wide-spread in Australia.

Hence, if we have any chance of realising the circular economy for recovered resources in the near future, it is the circular economy for organics.

Does this mean that organics recycling in Australia is close to reaching the goal of representing a circular economy?

The answer depends on how you define the circular economy for organics, and what goals you associate with it.

At first glance, the Australian organics recycling sector, which processes about 7.5 Mt of organic residues annually, seems close to having conquered and internalised the circular economy.

However, what systemic changes occurred in this sector since the circular economy arrived on our shores only a few years ago? Probably not many!

Local governments still supply unpasteurised mulch, disregarding the grief weeds and physical contaminants cause to users, i.e. their supply chain partners.

The vast majority (approx. 85 – 90 per cent) of urban derived recycled organic products (not including biosolids) is supplied into the urban amenity market, and this situation has not changed for the past 20 years.

Provided all supply chain partners are happy with current arrangements and their share in the value chain, this could be a successful example of the circular economy for organics, being in existence long before the concept was even born.

However, there is the long-standing ambition and call to supply agricultural and horticultural industries with urban-derived recycled organic products in order to ‘close the loop’.

This is contrasted by the low proportion of urban derived recycled organic products supplied into agricultural markets, which accounted for merely around 10 per cent in 2012 (more recent market information is lacking).

Conversely, agricultural enterprises in many European countries utilise more than half of all generated recycled organic products, amounting to 62 per cent in Germany for example.

Of course there are reasons for these differences, namely higher purchase and higher transport costs in Australia, resulting in a situation where a farmer in Australia has to pay, say $60 – $100 per tonne of compost landed at the farm, while his counterpart in Europe has to pay only $20 – $30 for a similar product.

Does this mean that Australian farmers derive three times more value from compost than their European colleagues?

Probably not, and that is the main reason why the organics recycling supply chain for agricultural markets is slow in growing, despite significant industry efforts and financial support from government agencies.

Pasteurised compost application in a vineyard.

Many agricultural enterprises fail to see adequate benefit in utilising urban derived compost to justify paying current prices, and therefore refuse to join the organics recycling supply chain.

In fact, it can even be argued that, by paying inflated prices that do not reflect the value farmers can derive of compost products, they subsidise urban organics recycling schemes.

How can that be, and how can it be rectified, you might ask.

Well, this is where the circular economy for organics and opportunities for systematic change come into play.

Remember that we are aiming for a self-sustaining organics recycling supply chain driven by demand and economic advantage for all supply chain partners.

Fundamentally, there are two sources for covering costs associated with urban kerbside organics recycling schemes, i.e. gate fees paid by waste generators, and sales revenue paid by product users.

Given that the supply of urban derived recycled organic products into urban amenity markets has been running successfully for the past 20 years, one can assume that the cost recovery balance is about right and that the supply chain is functioning satisfactorily, with all supply chain partners being able to derive adequate benefit.

However, the cost recovery balance has to be shifted for the agricultural supply chain so that waste generators cover more and farmers less of the overall cost burden.

In answering the question if there is already a functioning circular economy for organics in Australia, I would say ‘of sorts’ when it comes to the urban amenity supply chain, and certainly not when considering the agricultural supply chain.

If Australia wants to establish a functioning circular economy for the supply of recycled organic products into agricultural markets that is driven by demand and economic advantage for all supply chain partners, now is the time to establish the framework and structural changes necessary to achieve this goal.

Top picture: Compost application in a macadamia orchard.