Blue Economy FAQ

What's the difference between the Circular Economy and the Blue Economy?

The simplest way to put it is that the Blue Economy includes the Circular Economy but goes beyond it.

Both are about radical resource productivity, zero waste and sustainability. Both incorporate concepts such as systems thinking and design, cradle-to-cradle, closed loop, up-cycling, reuse, recycling, remanufacturing, industrial ecology, renewable energy, share economy. However the Blue Economy goes further to strengthen competitiveness by lowering costs and pursuing a more effective economy of scale. It's a business model that generates more value and multiple benefits (including social and environmental) with locally available resources.

The Blue Economy shifts away from the core business / core competence that force companies to focus on one industry, by considering local economic development as a priority, ensuring that local purchasing power increases and more money circulates regionally. This enables growth without inflation through an increase in local production of goods and services. The Blue Economy also comes with a core set of over 100 pre-screened innovations that have multiple benefits and multiple applications.

Work is typically done through a Blue Economy cluster, working to identify available local resources and relevant innovations - both from the core, multi-application Blue Economy innovations and from other sources. The design approach is inspired by nature, copying ecosystem design frameworks that aim for everyone to be employed and nothing to be wasted. It is guided by 23 explicit principles framed by originator Gunter Pauli.

In addition to it's cascading business models, the Blue Economy supports Global Progress Indicators (GPI) rather than GDP. GPI is a more accurate measure of economic activity whereas GDP makes no attempt to factor in the depletion of natural resources or degradation of the environment.

GDP is a seen as a flawed indicator that ignores income inequality. It doesn't discriminate between beneficial economic activity - such as new infrastructure, investment in education and disease prevention - and negative activity such as the cost of crime, pollution or rebuilding after natural disasters. GDP also entirely ignores a range of fruitful activity such as parenting or volunteering in the community and factors such as happiness and wellbeing.

The Blue Economy has also spent around 20 years examining new energy and building options and provides a 100+ multi-application innovations (all inspired by nature with zero waste). Organisations can draw from this screened set of innovations (not provided by the circular economy) to create jobs - not just provide efficiency.

An example of this is the Vortex Processing Technology - A Multi-Application Blue Economy Innovation

The Vortex Process Technology (VPT) and Industrial Vortex Generators (IVG) change the properties of water. They crystallize lime particles, remove air bubbles, decrease viscosity and increase both electrical conductivity and heat capacity. When used in Cooling Towers and Evaporative Condensers VPT achieves higher efficiency and longer life span because lime-scale deposits no longer builds up around the cooling elements. As chemicals are used to prevent lime scaling, chemicals are not necessary. In combination with UV-light to prevent biological growth, the IVG-CT can achieve a 100% non-chemical operational cooling plant. The "blow down" water can be re-used without treatment a second time before going to the sewage.

By using Vortex Process Technology in Cooling Towers and Evaporative Condensers, we replace something (chemicals) with nothing and generate multiple benefits (energy and chemical-free water). These are key principles of Blue Economy design. We also create additional value by increasing the life of the equipment, reducing environmental impacts, and enabling the water to be used for other purposes. These gains are designed in from the onset.

In regions where water is scarce and energy efficiency is paramount, we are seeing governments such as California and the EU giving incentives for business and industry to use this technology. But even without incentives - it's still a great business case with less than 2 year payback period.

Companies such as Heineken (brewing), Friesland Campina (dairy), Huntsman (chemical manufacturing) and Van Soest Cooling (refrigeration) are saving thousands of dollars a year by using a IVG-CT system in their cooling towers.

In California companies such as Southern California Edison and Southern California Gas not only give incentives for IVG-CTs used in cooling towers, they are also giving incentives to ice rinks and skate parks to use REALice TM - ice produced using Vortex Processing Technology. REALice TM removes air bubbles, decreases the water viscosity and crystallizes out the lime, resulting in higher ice temperatures, less hot water consumption, less energy consumption, less lime scale formation and improved ice quality. All up REALice TM its saving around 80% of energy costs.

There may not be too many ice rinks across the Asia Pacific region, however we make a lot of ice - so it's a great innovation that can be used across multiple industries. VPT is also relevant for mining, the paint and or coating industry, the cement industry, oil production and recovery, for algae control, aeration and waste treatment, process mixing and separation.

VPT can provide pure water for irrigation - increasing yields and shelf life of fruit and vegetables and improve water quality in rivers, ponds and aquaculture. One regional community in Mexico used the Watreco IVG's to improve water quality in aquaculture, and produced 10 times higher yield for their farmers.

Although there were a few examples above, here's a few more examples of companies / organisations and or communities who have successfully applied these concepts.

Blue Economy Projects - Regionally Focused, Regionally Rewarding

To date the Blue Economy has seen over EUR4 billion in investment and the creation of an estimated 3 million jobs with innovation and technology that is as diverse as it is game changing. They include:

Turning thistles - yes a waste that we spend millions trying to kill with expensive toxic chemicals - into valuable oils (the Sardinia Refinery saw $600m in revenues in it's first year);
Turning coffee waste into a valuable substrate to grow mushrooms and preventing your shoes and sports clothes from becoming smelly; through to
Turning construction and mining waste into stone paper - paper that needs no trees or water in it's manufacturing process and that can be recycled forever. It includes the bonus that the plant can be built at around 40% less than the cost of a traditional paper pulp mill for equivalent volume, and frees up water and land for farming. 

The Stone Paper factory in Benzi City (near Shenyang) started with a production capacity of 120,000T per annum, and is set to increase to 1millionT per annum and increase employment to around 1,000.

Mushrooms grown on coffee waste is the most popular of the Blue Economy innovations with around 1000 growers world wide providing food security and employment in both developed and developing countries.   

One of the better known examples in the region for using coffee waste however is that of Singtex. Each month Taiwan based Singtex collects around 300kg to 400kg of waste coffee from Starbucks and churns them into fabrics, shoe soles, socks, luggage, soaps and a range of other products. Singtex produces sports wear for Nike, North Face, Adidas and Puma. It beats Gortex fabrics in terms of UV protection, faster drying time, odour control and better price point. It also mixes hollow fibre from recycled PET with its recycled S.Cafe fiber for products in it's ecoSY range of insulation materials. Insulation that is breathable, wind and water resistant, compressible, odor controlling and thermally efficient.   

Two Decades of Global Corporate Success for InterfaceFLOR Carpets
Interface Flor (who have been leading sustainability innovators for over 20 years) are also a good example. Led by radical industrialist Ray Anderson up until his deal in 2011, they continue to break new ground.   

Interface have been inspired by bio-mimicry for many years using it to design and install their carpet. Entrophy design for example mimics nature where in a pile of rocks or leaves no two components are exactly the same - so too, no two modules are alike so the carpet tiles themselves can be installed in a random or non-directional layout - which means replacing a single tile easy, cost effective and minimizing waste. This product inspired by the ramdomness of nature, now accounts for 40% of their total sales - and they use TacTiles (small clear adhesives squares - like the paws of gecko) made without VOCs and odors to adhere their carpets - but most importantly they recycle all their waste materials.   

Interface discovered by working with their suppliers - in this case Aquafil Spa, they could recycle nylon 6. Aquafil discovered it was not only possible - it was also profitable. Aquafil pioneered recycling nylon and today Econyl (made up of 50% post industrial waste and 50% post consumer waste ie used carpets and discarded fishing nets) accounts for 30% of Aquafills US sales. It's goal however is to become 100% econyl. This is where it gets really interesting.

In Interface's quest to show how global business could collaborate with local communities on initiatives that are innovative, sustainable and commercially viable, they have now developed a program called NetWorks. Their aim is to create a truly sustainable restorative loop in carpet tile production, by cleaning up our oceans and beaches.   

At the same time, NetWorks helps many of the world's poorest communities who depend on the ocean to support their livelihood. With NetWorks they can establish new financial opportunities by providing income streams for those who collect and help them recycle old finishing nets that currently causes much harm to marine life like seals, turtles and who get caught up in these nets and die.

Few have gone this far, but even Interface will acknowledge there is much more that is needed t o get them to the point of only using recycled materials. But the journey has begun and in my mind it's a great blue economy example of what a multi-national is doing. 

To date, most large companies or organisations find it difficult to adapt to the Blue Economy as they prefer an incremental approach as opposed to a fully transformative approach. That said, many start with technologies inspired by nature with zero waste such as the Vortex Processing Technology and or by using re-manufactured waste in some of their products and progress from there.

How can governments across the Asia Pacific region encourage more application of these concepts among companies?

Education is key. Most people don't know what they don't know - so education is critical - starting with business, government and industry leaders, working our way down to SME's as SMEs are the real innovators. We need in increase awareness on the need, potential and skills for the Blue Economy. Companies have to rethink their business models, adopt systems thinking, redesign their products and processes, and explore reuse, remanufacturing and recycling. Let's not forget our students either.

In China, the Government are making the Blue Economy book free for all schools, universities and libraries, with students all receiving copies of the Blue Economy Fables - written specifically for children to understand these concepts, as without intergenerational understanding, knowledge and wisdom, it will be much harder for our cities, communities and businesses to adapt, prosper and grow sustainably.

Sadly there are only a handful of Blue Economy Experts in the world at present, but I am in the process of establishing the Blue Economy Institute to support Blue Economy education and training, advocacy, R&D and business incubation in the Asia Pacific region. So government support to help us to develop the institute would go a long way to bringing this innovation to the region much quicker.

Governments can also consider incentives for bigger companies or industries to invest in some of the technologies like the European Union, USA and Canada have. And with a regional focus on food security -it would be good to also assist in the establishment of pilot projects in agriculture and aquaculture

Local and regional governments can also leverage the Blue Economy as a source of innovative regional development for addressing employment and environmental concerns.

How can companies who are interested begin to apply this to their businesses?

Learning as much as they can about the Blue Economy is a good starting point. So get the book, attend a workshop, subscribe to our newsletters, watch the videos, engage a Blue Economy Expert to help identify opportunities are all good starting points.

If you manufacture - get a life cycle analysis of your products to identify what you are working with, then talk to your suppliers like Interface did, to establish how you can recycle materials as a substitute to virgin materials or up-cycle waste. Systemic thinking must guide our supply chains.

Always remember being renewable does not necessarily mean it's sustainable. You need to know exactly what all your raw ingredients are and how much of that raw ingredient you are using is waste. Once you have a clear idea of your waste stream, then look for things you can do with it or change what you use - innovate to use a substitute that is not going to cut down rainforests or pollute our oceans.

The other key shift in Blue Economy thinking for companies is to look beyond their four walls and current products and processes. Their business exists within a local system and substantial opportunities are likely to develop outside "business as usual".

Orange Farm Case Study - Maximising Regional Development by Business
One fruit producer in Africa who found they could not longer compete against the global citrus market because it's prices were too high, turned to the Blue Economy for a solution (after being told by traditional consultants they should cut their staff in half and automate). Lisbon Farm was located next to Africa's oldest national park - Kruger, which is a international tourist destination with 600 lodges for sightseeing the continent's big 5 animals.

After scanning for opportunities, they set about delivering on them one by one. First they took new measures to deliver local fresh juice to all 600 lodges every day - replacing imported fruit juice that had a huge carbon footprint with a superior product with an almost non-existent carbon footprint.   

The farm then created a natural laundry detergent out of the prodigious amount of left over orange peels using a solar powered process enable the extraction of a substance called D-limonese from the peels to make the detergent.

In keeping with a signature characteristics of natural ecosystems, the farm began to diversify further and think beyond "products" by offering laundry services to the 600+ lodges, using the local and natural detergent. Because the laundry water only used extracts from local foods, it could then be reused for irrigation back on the farm.

By continuing to ask the key question, "what would nature do?" - the farm also began reusing its citrus tree prunings, which are rich in amino acids, to farm mushrooms. The mushrooms were sold to the lodges, which removed the cost and impact of otherwise having to fly mushrooms in from China. After harvesting the mushrooms, the substrate left over from growing the mushrooms is now enriched in amino-acids which made an excellent food for chickens - this then saw the introduction of a chicken and egg farm.

Building on the increasingly integrated relationship with the lodges, arrangements were then made to collect their food waste as feed for a new series of pig farms. The Kruger Park region is savannah-like where chicken and pig farms are typically expensive to run, but with waste now being a food source it made it cost-effective. The waste from the pigs was used as a bio gas to supply energy and also to help to regenerate the soil.

This program saw nine new revenue streams generated for the farm and the world market price for citrus has become a moot point. Employment is up by 50 percent. A key success factor in the project was its regional focus, with a primary objective of meeting local need from local resources and leveraging local opportunities. This reduced the farm's dependence on remote, uncontrollable international markets.

Not all eyes could see what would be considered by some as the obvious. The Blue Economy helps provide a filter and focus - a new lens through which to scan for innovation, resulting in a plethora of opportunities and new income streams.

A New Lens for Business Innovation and Regional Development

The approach will be different whether you are a fruit grower, a carpet manufacturer or a hotelier. One thing is for sure - as businesses cluster, they can better share knowledge and resources including waste. In Detroit, they have established what they call a ROC - the Reuse Opportunity Collaboratory (ROC) The Collabatory brings together Detroit industries, institutions, small and medium sized businesses, and entrepreneurs to create closed-loop systems in which one organisation's waste becomes another's raw material.

And don't think you have to do it on your own. Talk to your industry about what they are doing, find out what other sectors are doing - but most importantly, start to think systemically about how you live and run your operations. It's fine to have a circular or blue economy, but it all starts with realizing we are part of one system - the blue planet (as seen from space) so the more we unite in our approach and are inspired by nature, the better chance we have!

For further information contact:

Anne-Maree Huxley
Sustainability Advisor and Blue Economy Expert
Founder and CEO - Models of Success and Sustainability (MOSS)
Founder - [unrecognized beecos tag: {http://www.moss.org.au/The-Blue-Economy- The Blue Economy Institute}]
Ph: +61 (0)3 987 99886 / +61 (0) 419 798 104
Email: amh@moss.org.au Skype: amhmoss



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