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Blog February 2023

Circular Economy trends in the DACH region

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Lara van Rijswijk

Head of Marketing EMEA & ANZ

The linear model of take, make, and dispose is being phased out in the EU, but it’s a question of how fast this can happen. There is only one planet Earth, yet by 2050 the world’s consumption will equal that of three planets, according to the World Bank.

The European Green Deal is designed to speed up the transition to the Circular Economy and its reduce-reuse-recycle strategy. The aim is to create a climate-neutral, resource-efficient and competitive EU economy now, rather than later.

The latest figures put Germany and Austria first and second respectively in recycling municipal waste among the 27 EU member states. Among all 33 European countries, Switzerland ranks sixth.

Yet, the DACH region is producing waste at an alarming rate despite initiatives, for example, of major Swiss companies pledging to only package food in recycled plastic by 2030.

The prize is there for the DACH region, just out of reach

Up to 80% of products’ environmental impacts are determined at the design stage. Eliminating waste is part of the Circular Economy, which impacts the future of recycling. It stands to reason that the less waste generated, the less recycling will be necessary.

However, some plastics will be with us for the unforeseeable future. Take the medical industry, where plastics play a critical role due to their properties. The Healthcare Plastics Recycling Council has already identified certain plastics as valuable feedstock, ideal for advanced recycling.

In fact, advanced recycling will play a bigger role in our lives as the Circular Economy grows. The industry is finding its footing, but as consumer awareness grows, recycled plastics will be in demand. Metal recycling will be just as important as ever, of course. All of this means that recycling will continue to play an important role in creating a sustainable planet.

The prize is there for the DACH region, hanging just out of reach. It’s projected that 18 million jobs will be created worldwide by the Circular Economy (24 million jobs created, minus 6 million jobs lost).   The Circular Economy has already been credited with creating 3.5 million jobs in the EU by 2017. Growth in the DACH region’s waste & recycling industry depends on how soon they can achieve – and exceed – their own government and EU targets.

The Circular Economy will be digital

Enabling a Circular Economy will demand digitalization. Waste & recycling players must therefore work digitally. Digital business ecosystems give companies total visibility into their operations, allowing them to spot significant events in real time.

The data collected from vehicles and other areas of the business provide meaningful insight that inform smarter decisions and the right course of action to take. With digitalization, companies can apply circular business models to their own operations, creating new opportunities to take advantage of the emerging Circular Economy.

This isn’t just about increasing revenue, but creating significant efficiencies that allow you to expand your profit margins and lower operating costs. Already we’ve seen waste & recycling companies in the DACH region transformed by their digital journey. Nowhere is this more evident than in logistics.

Example: In a survey of German waste & recyclers, two thirds feel that dispatching and logistics is difficult without digitalization, with over a quarter believing that it would be impossible. Around half of the respondents feel that weighing and sorting, and customer management and sales would be difficult or impossible to carry out without digitalization.

This is how invaluable digitalization has proven to be in transforming them into more efficient, profitable businesses. They’re also better poised to exploit opportunities as the Circular Economy gains traction.

While the DACH region is ahead of most regions around the world regarding recycling, very few DACH companies in the industry are working 100% digitally. Many have begun and need to progress their journey. Of concern, some have not even started – they’re risking everything by still working manually, but it’s not too late.

The Circular Economy will attract disruptors

Called circular start-ups, they will accelerate the transition to the new economy. They’re already doing so in the Netherlands. They will arrive in the waste & recycling sector, too, and in the DACH region. This doesn’t mean it will be easy for them to compete initially, as start-ups usually lack the capital and economies of scale to take on more established companies.

But innovation always wins out. They will be armed with digital tools and the drive to make the Circular Economy work, attracting municipal contracts and other customers.

How would digitalization work?

This isn’t a science-fiction world. Rather, it’s about giving people the tools to make fantastic efficiency gains that help companies participate in the Circular Economy.

We’ve already mentioned logistics. This involves optimized route planning, which otherwise, is a time-consuming and complex task. Algorithms calculate the most efficient routes that take into account rush hours and traffic events, reducing driving time, mileage, the number of vehicles needed, and CO2 emissions. (AMCS Route Planner even reduces planning time by up to 75%.) Navigation, one of the most frequently used technologies in Germany, guides drivers, reducing their stress.

Telematics monitors engine performance and drivers’ actions, feeding data back to the office in real time. (The German survey revealed that a whopping 68% of participants are already using telematics.) Data can be collected during collections – even before collections. Sensors attached to waste bins communicate the fill level to your office so that collections happen when needed, enabling you to make better use of your resources.

In-cab mobile technologies allow drivers to photograph proof of delivery and the condition of materials collected or delivered. They can store documents on their devices, eliminating the need for paper. These devices enable them to quickly capture digital signatures. The ability to document events as they happen provides companies with rich data. Nor is there any reason for companies to wait for drivers to return to create invoices. That information is sent to the office and invoices are automated, which speeds up payments and ensures a healthy cash flow.

Devices with artificial intelligence can spot contamination in materials and link it back to the waste producer. Customer portals ease the burden on your customer service by reducing call traffic. Customers can request services online – even pay their account balances online – make changes to their account information and more. Portals for your supply chain makes pertinent information visible, helping everyone work more efficiently.

By incorporating a scale into their vehicles, companies can record the weighing note digitally and transfer it to their ERP system. Digitalization reduces weighing to a matter of seconds, which quickens turnaround times.

These are just some examples of digitalization at work.

Modular solutions let you ramp up quickly without risks

Whether a DACH waste and recycling business is still working manually or has already started their digital journey, concerns about cost are natural. First, because digitalization happens on the cloud, there is no upfront heavy investment that comes with on-premise software. No licences to buy. Cloud-based solutions scale with you and updates are automatically made for you when available, without any interruption to work flows.

An excellent way to begin or progress digitalization is by using modular solutions. For instance, AMCS Platform can integrate with any existing software a company is already using. Let’s say a company wants to incorporate route planning. That’s easy. Modular solutions can be quickly ramped up and tested without a significant financial risk. AMCS solutions are specific to the need and can integrate into any existing platform so that a company is up and running quickly. It’s not hard.

Grabbing the prize

The Circular Economy and the opportunities it offers are the prize. It’s up for grabs to whoever can help usher in this new era. Those with digital capabilities are already positioned to win. For help or advice on starting or progressing your digital transformation, we encourage you to get in touch, or request a demo or download the AMCS Platform brochure below.

 

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