New circular business models for the UK plastics sector

Adeyemi Adelekan^1,*,+, Maria Sharmina¹

¹Tyndall Centre for Climate Change Research, University of Manchester.

*[email protected]

Extended abstract

The increasingly important nature of plastics in modern life calls for innovative approaches to address their negative impacts on the environment and human health (Thomas, 2022; Wang et. al., 2021). While being praised for its low-cost, light weight and adaptability features, plastics cause 4.5% of global greenhouse gas emissions (Cabernard et. al., 2022) and are one of the major components in marine litter that affects biodiversity and human food systems (Gonzalez-Fernandez et. al., 2021). Globally, current established plastic recovery systems and innovative solutions already struggle to cope with the rate of plastic production and waste generation (Bellou et. al., 2021).

For example, in the United Kingdom (UK), out of over 2.2 million tonnes of plastic packaging placed on the market in 2019, less than 50% was declared as recycled with over half of the materials being landfilled or incinerated (Morgan et. al., 2020). One of the proposed ways to address the problem of plastics’ impact on the environment and enable a circular economy (CE) in the UK is through the creation of a harmonised household plastics collection system, that combines digital tagging technologies to enable material sorting accuracy and value retention in mixed waste streams (Burgess et al., 2021). A CE represents a shift away from a linear economic system as it aims to keep materials and energy resources in a loop (Kirchherr et. al., 2017). A unified collection system with improved digital infrastructure in the UK might generate usable recycled plastics that can be fed back into a circular economy (Burgess et al., 2021).

However, realising such a circular system would require collaborations across the plastic supply chain. Previous studies have highlighted how business models can enable or hinder collaborations for sustainability (Oskam et. al., 2021; DiVito et. al., 2020). While digital technologies can enable the development of new business models and collaborations for the circular economy (CE), there is limited knowledge of its application to the plastics sector. In addition, as the circular economy requires both firm level and systems level approaches, there are increasing calls for systems-level studies with emphasis on exploring the application of digital technologies in developing collaborative business models.

Our study employs a multi-step qualitative approach to explore these issues, taking the case study of a consortium consisting of stakeholders across the UK plastic supply chain. The consortium aims to develop collaborative business model for a ’One Bin system’ for managing plastic waste in the UK. The One Bin system aims to improve compliance by collecting all plastics in a bin and using digital technologies to enable the sorting and recycling of plastics in their highest value condition. We have collated data from fifteen plastics sector stakeholders in the UK primarily through interviews, co-design workshops and audio-visual materials and thematically analysed the data using Gioia et. al.’s (2013) framework to structure the results.

Our findings highlight the value retention and data-as-a-service business models that could be enabled by digital technologies in the UK plastics sector. In the value retention business model, digital technologies such as flourescent inks could enable the sortation of food from non-food grade polypropylene (PP) to produce recycled contents that can be used for the production of new food packaging. Likewise, in the data-as-a-service business model, digital technologies such as 2D data matrix and flexible Integrated circuits (RFID chips) that use blockchain technologies and artificial intelligence, could enable unique item-level identification and sortation of plastics leading to the generation of an open dataset with detailed information on material journeys. We find that each of the outputs from these business models (recycled foodgrade PP and open dataset) are sources of value that multiple stakeholders across the UK plastics sector can derive economic, social and environmental value from. Our study details the various ways stakeholders could capture value from those outputs and concludes that a closed loop, digitally-enabled, circular business model is a continuous value creation system, where multiple actors derive value from both the process and the output of value creation.

Our findings also highlight the important but less explored issue of governance of collaborative business models. We contribute to ongoing discourse on experimentation with circular business models (Bocken et. al., 2019; Bocken et. al., 2021a) by arguing that tensions among stakeholders, likely to arise during the design phase, might delay the experimentation and collaborations at the systems level. Our study sheds light on specific tensions arising from incentivising digital technology investments, control of access to system outputs and outsourcing of digital asset management. As a result, we show that while governance might be a way to navigate tensions in establishing CBMs, it is also an arena of tensions that could facilitate or derail such efforts. We highlight the need for a safe space for cost-free or budget-friendly experimentation as a potential means of addressing collaborative tensions that could arise during the design and establishment of collaborative business models for sustainability.

Keywords 

Circular Economy, digital technologies, collaborations, business models, plastics. 

References 

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