Nobody can make it alone in the circular economy - How can indicators solve the challenges of the circular economy?

The efficient use and exchange of information are considered fundamental aspects for the prosperity of ecosystems, being them natural or industrial. Consequently, data sharing becomes a requisite for successful circular economy models since, by definition, they require the collaborative interaction of various actors throughout the value chain of materials and products. However, there are significant data gaps that currently prevent the implementation of circular economy in practice.

This problematic becomes particularly timely considering that, to achieve the ambitious global targets on the electrification of transportation, more efficient circular economy strategies are needed. Otherwise, the increased demand of rechargeable batteries powering electric vehicles will result in resource challenges and supply-chain risks. Indeed, as the extraction of primary raw materials grows, the sustainability of automotive supply chains will become ever more challenging.

What are the data sharing barriers in the rechargeable batteries ecosystem? Research made in Aalto University’s School of Chemical Engineering found that companies do gather information relevant for other stakeholders but there are no incentives to openly share data.

Data is considered a valuable asset in general and industrial actors feel a financial risk to openly share information, the research found.  ‘Companies collect and utilize data, but they do it in silos. We found that data considered missing by a specific actor, was often being collected by someone else who does not share it. This is an untapped opportunity’, says Professor Rodrigo Serna from Aalto University. For example, recyclers would like to have detailed data about the contents of a battery. At the same time, manufacturers collect such information down to the components level, but this data is not being shared.

Another relevant finding was that industrial actors lack clarity on which data is relevant to promote circularity. In addition, there is no consensus on which format could data be most efficiently shared to promote circular economy strategies.

On the positive side, the research also found that companies may be willing to implement circularity, as we all want to reduce ecological impact and emissions. However, companies have no means to assess whether their actions are having a positive impact, as the benefits may only become evident at later stages in the value chain.

To address the identified barriers, parametrization was identified as a strategy to promote data exchange between stakeholders. Properly designed parameters could bring a “common language” in which relevant circularity data is codified. This could lower the confidentiality risks for companies, while at the same time providing clarity of purpose for strategies supporting the circular economy.

‘The practical implementation of data sharing is still missing,’ says Serna. ‘While our work focused on the battery materials ecosystem, it is likely that many other industries are facing the same problems. We do not have clear indicators, and we do not exchange data because we don’t know what is relevant to others. This why we consider the topic of parametrization so relevant for the circular economy.’

Research is published in the Journal of Cleaner Production on 10th November 2022.

assistant professor rodrigo serna photo by lasse lecklin

We found that data considered missing by a specific actor, was often being collected by someone else who does not share it.

Rodrigo Serna
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