Circularise: prove your sustainability practices

Our economy is 'linear' meaning that raw materials are used to make a product, and after its use any waste is thrown away. If we keep living this way, future generations will live in a world defined by natural disasters, famine, and poverty. We at Circularise believe that by moving towards the circular economy these outcomes can be prevented. However, in order for that to happen we need cooperation between manufacturers, retailers, suppliers, recyclers and other parties involved. That's the reason why we are developing a blockchain‑based communication protocol to promote value chain transparency without public disclosure of datasets or supply chain partners (first in textile & plastics, later in electronics). This system will allow these parties to increase trust in each other, increase transparency and allow them to communicate data that wasn't accessible before, leading to an uptake of recycling, reusing and repurposing practices on a massive scale.

The plastics industry is one of the most pollutants releasing industries of the world. Surveys show that nearly 25% of all landfill space is consumed by plastic waste. United Nations Climate Change News states that the plastics industry contributes 15% of global greenhouse gas emissions. While, up to 95% of the plastics that are land filled each year could be recycled, the plastics industry is still defined by slow transition to the circular economy practices. In particular, manufacturers are reluctant to produce and use more secondary (recycled) materials due to the higher costs associated with auditing and certifications. These certificates provide auditable proof of origin and/or production and working conditions, however they are extremely costly or sometimes even impossible to obtain due to intransparent supply chains and the necessity to audit all actors. In turn, high prices of certified recycled materials leave manufacturers with significantly lower number of orders from plastic retailers, hindering the shift towards a Circular Economy.

Endusers: Over the past 3 years we have been working with associations representing endusers and run simulations and pilots, internationally. Endusers have expressed their need for fraud-proof certification of the sustainable products in order to make informed decisions about purchasing products. The cheap certification keeps the prize for recycled products below the added 15% identified as by Mc Kinsey as representative of the customers' willingness to pay. 

Manufacturers: Through pilot projects and research with BASF, Domo and Covestro we have identified the need for reliable certification, Manufacturers are aware of the expectations for sustainable practise and therefore welcome the certification system that is communicates the information in a decentralised way while assuring the companies data to remain in only its hands. 

Recyclers: Recyclers are able to market their high-quality recycled plastic as such. This increases their ability and willingness to recycle at a higher quality, which benefits not only them, but also society. 

Workers: The traceability solution does not only provide transparency for recycled content, but it can also easily be used to certify working conditions, fairtrade or social standards. This transparency protects workers rights and protects the society from hazardous materials and contamination. 

Circularise develops a communications protocol to enable the flow of information between all parties in a value chain while using state-of-the-art blockchain and encryption technology to fulfil customers’ needs for privacy and protection of competitive advantages. We have created an innovation that decreases certification costs and therefore makes plastics from recycled material as affordable as necessary for broad market uptake. As a result, plastics with a significant recycled content can be produced without mayor added costs and are therefore offered at market price and to the average customer. Circularise is an innovative, fast and cheap technology that solves the technical problem and creates a business case for producers of recycled material and the respective retailers. It allows the certification of material without the necessity to certify every stakeholder along the supply chain. This is unique as there are no other technical solutions that allow tracking materials with interruptions in the supply chain, while auditing and certifying two instead of 5-10 parties. This avoids the 15% additional costs for certification and makes sustainable material available for mass production. With our technology, retailers can decrease the environmental impact of their products while receiving auditible proof of the recycled content. As a result, producers of recycled material are able to sell more of their material to suppliers of said big retailers. 

Despite the globally connected plastics sector, this new technology especially benefits European companies, as the amount of companies recycling plastic polymers is unproportionally high in Europe. Additionally, research has shown that the production of secondary plastic emits only 15-25% of the greenhouse gas emissions compared to primary material.

Circularise technology is thereby allowing for circular economy business models, lowering greenhouse gas emissions, strengthening European businesses and leading to more sustainable consumption and accountability and commitment by one of the three biggest fashion companies as a trend leader for the entire sector making the Circularise Source Technology a global interdisciplinary standard.

Circularise solution is innovative because of the combination of blockchain and tracer technologies, which - unlike through our competitors - allows the direct validatable proof on the basis of a single piece of clothing. This means, that Circularise provides a unique solution that allows a piece of clothing to be traced back without auditing the entire supply chain and be scanned on a product-basis to determine the recycling content through the tracer technology. This leads to enormous economic benefits, because it decreases the time and costs of the certification process. Additionally it opens the currently very small market of intermediary stakeholders in sustainable plasics to new companies, as it removes the necessity of a centralized and selective certification. This leads to the opportunity to sell products with recycled materials at a market price equal (or at least competitive) to virgin material products and thereby allows mass production of recycled materials and the development of a new standard to use recycled content not only in niche products but in the general collections of all major brands, a paradigm shift.

In the last six months the solution that we are developing has been presented to Domo Chemicals, Covestro and BASF who decided to pay for a pilot project. The pilots at the customers premises validated the technology and confirmed its applicability in the operative environment as well as its usability in the plastics sector specifically. The continuous talks with said brand owners indicate that the first cooperation with the scaled technology can potentially cover their entire segment of sustainable accessories and underwear and will consecutively be extended to other segments just after the end of the large scale pilots.

At this point of time, we are also working with the recylcers, e.g. the WEEE-Forum, Plastics associations such as PlasticsEurope and research institutions inside and outside research projects of a total of 8 million Euro, whcih have so far indicated the potential of the solution. 

The market has 20+ potential large customers solely on the retail side, with one of the biggest players already showing its commitment to use CirSource for a number of orders. Based on the existing projections, in 2019-2020 CirSource will be used to process approximately 1000 tonnes of sustainable apparel. The customers waiting for the blockchain-based Circularise technology and a better integration with the chemical tracers cover 25% of the plastics world market. Looking at the predictions on the growth potential of sustainable fashion, the use of the CirSource technology will create a precedent case and allow 40% coverage of the sustainable fashion in Europe within 5 years.

Circularise measures its impact in economic and environmental key performance indicators.   

Circularise is used on 0,025% of the global plastics production at the end of the project Circularise is used on 1% of the global plastics production two years after the project

Circularise has processed a total of 90000 tonnes of polymers at the end of the project

Circularise has processed a total of 3 Million tonnes two years after the project

Circularise is used in 25 countries at the end of the project Circularise is used in 50 countries two years after the project

Circularise has 25 direct clients at the end of the project Circularise has 70 clients two years after the project

Circularise is used in the plastics, electronics and textiles sector at the end of the project Circularise is used in a total of 5 sectors two years after the project

Plastics manufacturers are increasingly confronted with customer’s claims for sustainable material and ethical working conditions. Our current pilot customers and their competitors involved in our consortium for transparency have converted 40% of the recycled plastic worldwide into Circularise-certified plastics. 

Our goal is mass market sustainability through new circular economy practices. In particular we want every person to have an opportunity not to choose between buying a cheap unsustainable garnet or a recycled but more expensive one. Everyone should have access to affordable clothing that doesn't have a negative impact on our environment. 

Technological barriers

1. Blockchain is a new technology where innovations are quickly following each other and the further development is not absolutely clear.  

2. The plastics sector is known for its short production periods which can present a challenge to some stakeholders due to their inability to rapidly react to the market demands and the tight schedules in any interactions with the plastics sector. 

Barriers in moving towards the circular economy

The world has streamlined its linear production systems for decades. These processes rely on virgin raw materials. Globally since the year 2000, the amount of clothing sold has doubled, and the number of times a garment is worn has decreased by 36%. From 1975, the global production of plastics has increased by a staggering 280%. This is a 4-fold increase. The raw materials, such as cotton, are becoming scarce or unsustainable to produce. This is why it is important to intensively develop technologies to utilize recycled materials. 

Technological barriers

1. The Circularise platform is designed to be blockchain-agnostic and it is therefore possible to switch blockchains whenever necessary. The currently selected Devv.io blockchain, for example, already outplays the most common Ethereum blockchain by 4 orders of magnitude in terms of speed and is in fact a lot less energy intensive.

2. After CirSource is scaled all transactions on the blockchain can be automated and unwanted delays will be mitigated.  Due to close cooperation with our customers throughout the pilot preparation and tests with the tracer technology, we could profit from the sector-specific expertise and adapt the system to the needs which we identified until now.

Barriers in moving towards the circular economy

However, technologies as such are not enough. Reorganization should happen at mental, structural, regulatory and economic levels. Our involvement in educational projects in the framework of Horizon2020 and EIT RawMaterial as well as local cooperation with public institutions addresses some of these issues already. The more rapid shift towards a circular economy in plastics, however, will come from the financial incentives provided by this project.

Latin American countries and the Caribbean are often characterised by political systems that are still in transformation processes and there present little continuity in innovation policy and support for companies R&D. These activities are however necessary for companies to change to a circular business model. Our solution makes it possible to make this change to a more sustainable business practice as it makes sustainable businesses profitable. The shift does not require expensive investments and is therefore applicable to any company and political situation. 

Full-time staff: 6

Part-time staff: 2

Mesbah Sabur (Co-founder)

Mesbah got his MSc. in Industrial Design Engineering from Delft University of Technology. His primary focus for this project is on management, design and front-end development.

Jordi de Vos (Co-founder)

Active in the blockchain scene since 2014 he knows all the ins-and-outs of the market and he uses his knowledge to ensure that we do not end up in one of the common blockchain/crypto pitfalls. His primary focus in this project is on corporate development, customer acquisition and strategy.

Teresa Oberhauser (Project Lead) 

She gathered experience on the international level very early working at UNESCO headquarters in Paris, an international NGO in Brussels, the German Federal Ministry of Economic Development and the leading political think tank German Institute for International and Security Affairs Berlin. 

Igor Konstantinov (Growth Manager) 

Igor combines his degrees in industrial engineering and strategic management with seven years of experience in digital marketing and brand development, as well as outreach and stakeholder management at Europol’s European Cybercrime Centre. 

Brian Smits (Technical Account Manager)

With over 8 years of experience in finance, recruitment and sales, Brian is merging all this experience in his role of Technical Account Manager at Circularise. His primary focus is on sales and customer acquisition.

Sharvan Debi-Tewari (Developer)

Sharvan is a developer with expertise in cloud computing, mobile app development, web development, Python and React. Sharvan is working directly with Arvind and Mesbah on the advancement of Circularise solution.

X - Confidential

The here described Circularise business model has been developed based on the sector specific payment norms. It consists of multiple parts found below:

• The minimum expenditure of EUR X a month 

The minimum expenditure for using the system is X a month, which is equal to 1 small shipping container filled with textile products (8000kg). Anything above this threshold is calculated based on the weight of the materials that go through the system and charged to a company on a monthly basis.

• The onboarding fee of EUR X

All Circularise products require a EUR X onboarding fee, in order to set up the service for the company and create the necessary links to the company’s software to allow automated interaction, hire more people for a specific project, conduct workshops with the clients, etc. 

• Pay per kilo EUR X/Kg 

Payment by weight system charges EUR X per kilogram of certified material. The cost of processing an order is the cost of a single transaction. This cost will go further down with the economies of scale. The customer is being charged directly, but experience has shown that the certification costs are fully paid by the user of the service, the retailer or brand owner. Despite the added fee for Circularise Source, as intermediary stakeholders don’t require costly auditing processes and registrations as official GRS partners anymore, the cost price for the retailer and thereby also the market price decreases.

At this point of time, we are working with the Summit Company to launch this solution with its customers. Aside from working with Summit Company Circularise will invest in acquiring more customers. This is currently being approached from different angles:

• Through trade shows and conferences in the plastics sector. 

• In addition, several of the companies that we are formulating concrete cooperation requests within different sectors are specialised on recycled plastics. This cooperation enables Circularise to acquire customers not only in the field of high-tech plastics but in the field of recycled plastic-based fabrics.
• On the other hand, we are already talking to companies in the furniture, textile and automotive industries. Both industries require plastics and present a great opportunity for expansion.