Inter-linked Value Chains: Transitioning from Linear Value Chains to Circular Economy Strategies

By now you know that in order to ensure food security in the world, we need to move away from the linear system and develop multi-functional and productive systems that lower the number of external inputs, pollution, and waste. In this step, we examine how linear value chains are transitioned to Circular Economy strategies, and how the transition is related to food applications. We also get to know the Fisu network, which is a Finnish network aiming to move towards a Circular Economy.

From linear to circular supply chains

By using Circular Economy principles in supply chain management, it is possible to create environmental benefits. A study by Genovese et al. (2017) found that the integration of Circular Economy principles into sustainable supply chain management leads to enhanced environmental performance. Specifically, the study compared traditional and circular production systems for the production of biodiesel from cooking oil. The comparison was based on diverse sustainability indicators, such as direct, indirect and total lifecycle emissions, waste recovered, use of virgin resources, and carbon maps.

The study took two ways of producing biodiesel into consideration: in the first process, cooking oil made of virgin resources was used in the production, what corresponds to a traditional and linear supply chain structure; and in the second, cooking oil made of recycled resources was used, what corresponds to a circular supply chain structure. With regards to lifecycle emissions, the study revealed that the emissions from the production in a circular supply chain were clearly lower than in the linear supply chain. Circular supply chains make it possible for used products to be reused in the production of new products rather than being disposed of as waste. In the study, for every kilogram of biodiesel produced, 0.964 kg of cooking oil made of virgin resources was used in the linear supply chain. On the contrary, the production with a circular supply chain structure used 0.895 kg of cooking oil made of recycled resources. Thus, compared to linear supply chain, less resources were required to produce the same amount of biodiesel with a circular supply chain.

Circular Economy can also mitigate other detrimental effects of biodiesel production. There is, for instance, direct competition between food and bioenergy production, which can result in higher food prices, land-use problems, and it can threaten the sustainability of food supply chains. For example, about 15 % of global soy oil production in 2010-2011 was used to produce biodiesel. If circular supply chains are used in biodiesel production, it can deal with this challenge and protect virgin resources.

This was an example of a transition from a linear to a Circular Economy in the context of producing biodiesel from food waste. Next, we are examining such transition at the municipality level, as we take a look at a network of Finnish Sustainable Communalities.

The Fisu network

Fisu stands for Finnish Sustainable Communalities and is a network of municipalities that aim to become carbon neutral, waste-free and promote globally sustainable consumption by the year 2050. Municipalities, companies and other local stakeholders build a joint vision and roadmap together, in order to achieve these goals. They strive for new possibilities to work together. They also envisage a future in which the local and regional economies are stronger, create jobs and improve well-being. To transition from linear to circular supply chains, the Fisu network considers five actionable steps for the municipalities. The first step is preparation, which includes writing the member application and nominating the contact person and working group. The second step is an assessment of the current situation, which includes reviewing existing measures and collecting data. In the third step, a working group is organized to compose the roadmap. The fourth step is the implementation by preparing the workbook and designating key projects. In the final step, the working group monitors and updates the workbook, and communicates with different stakeholders.

Fisu network Source: https://www.fisunetwork.fi/en-US/About_Fisu

Wrap Up

Transitioning from linear supply chain towards circular supply chain can result in significant improvement in sustainability, such as reducing carbon emissions and saving resources. For example, circularity can be enhanced by utilizing recycled resources instead of virgin resources in biodiesel production. With Circular Economy, it is also possible to mitigate the competition of resources between food production and biodiesel production, as certain resources are used in both of these processes. One example of moving towards a Circular Economy is the Finnish network of municipalities, which aims to enhance sustainability with diverse actions by the year 2050. These actions include the phases of enhancing sustainability from preparation until monitoring and reporting to stakeholders. In the next step, we are going to examine life cycle thinking and life cycle assessment, two concepts that are closely related to circular supply chains.