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Tag Archives: Chain of Custody

Waste of a Word

There is much more to the word we know as ‘waste’ and that means viewing resource recovery through a lens that creates value.

At a recent conference I was speaking on how to track whether recyclables are really recycled when I got a great question: “When is something a waste, and when is it recycling?”

It is just a word, but that word waste is inextricably but unfortunately linked to recycling. Waste management is presented as almost interchangeable with government recycling policy and regulation, and to the pursuit of the grand aspirations of reduced disposal to landfill and a more circular economy.

But what is commonly called ‘waste’ is not waste, it is a ‘product’.

Effective and sustainable resource recovery and recycling is fundamentally about value generation. If it is cheaper to throw something away than it is to recover and recycle it, then by definition our economy and therefore community is saying it does not value that material.

Changing that value equation is not easy. In 1991 the Industry Commission upon reference from then Treasurer the Hon PJ Keating pointed out what many may say is obvious when it stated that “…recycling is an alternative to waste disposal…” i.e. recycling is not waste.

The Commission also made the finding that ‘’Governments cannot be expected to determine efficiently how much recycling of each product should occur now or in the future. But, by changing arrangements in some areas, governments can contribute to more efficient recycling”.

So, it was recognised 27 years ago that generating greater value through resource recovery should not be through a narrow lens of “waste” or simplistic targets.

What does this mean when talking about how to track recyclables? Only that having proper processes in place to track where materials collected for recycling actually go is an economic and risk management tool.

Firstly, tracking and reporting downstream activities means the purchaser knows whether they are getting the service they paid for. It is incumbent on the purchaser of recycling to demand such information, and the recycling service provider to furnish it.

And secondly, downstream assessment and knowing where recyclables go and what happens to them informs the market, and an informed market is an efficient market.

Knowing the fate of recyclables is at times a complex activity and needs a close eye on confidentiality and privacy issues, but ultimately is part of generating more value through recycling.

Download a copy of the presentation here. It was delivered at the WA Waste and Recycle Conference 2018 in Perth, WA on 6 September 2018.

This article was authored by Nicholas Harford, Managing Director of Equilibrium consultants.

Know the fate of your recyclables

Not knowing where your waste is going can lead to reputational and regulatory risks. Equilibrium explains how its networks are helping the waste industry keep track of the downstream supply chain.

In 2011-12 Australia exported 4.4 million tonnes of waste valued at $2.4 million or 0.8 per cent of Australia’s total exports, according to the Australian Bureau of Statistics.

During that year the value of Australia’s waste exports tripled to $696 million, when compared to 2000-1 levels. While recent national figures are in short supply, the National Waste Report 2016 shows 26 per cent of Victoria’s recyclables was exported overseas in 2014-15, indicating exports still remains a key part of Australia’s waste management strategy.

Keeping track of where this waste ends up can be a challenge, much less ascertaining whether the materials were subject to environmentally sound management.

The Organisation for Economic Co-operation and Development provides a working definition of environmentally sound management as follows:

“A scheme for ensuring that wastes and used and scrap materials are managed in a manner that will save natural resources and protect human health and the environment against adverse effects that may result from such wastes and materials”.

According to Nicholas Harford, Managing Director of Equilibrium, without transparency in the downstream supply chain, recyclers leave themselves exposed to reputational and regulatory risks. The core issue is: if you’re collecting and on-selling or shipping material for recycling, do you know how it is it being recycled?

Equilibrium’s information sheet on downstream assurance services provides further detail on the process.

“Reputational risk occurs when a material that you have collected and said will be recycled is inappropriately or illegally disposed of. In the waste industry, we are all familiar with concerns about e-waste going to third world or developing nations where it’s inappropriately handled, sometimes burnt with no pollution control and at great risk to human health,” Nicholas says.

“No company wants to end up in a situation where its reputation is on the line, whether you work in council, operate a materials recovery facility or a recycling company. If you’re in local government and in collect kerbside collection, you want to be confident that the household effort is being supported by environmentally sound management.”

Nicholas explains the regulatory risk occurs through the unlawful control of hazardous material exports, and whether the end use has the correct regulatory licence or permit to operate within the country and ensure control of emissions in line with best practice.

He says it is particularly important to know where materials are going for waste streams such as e-waste and tyres. Some kerbside recyclables may also require an export or transport licence, he adds.

Nicholas says tyres may have an overlay of being potentially hazardous materials. According to the Commonwealth Hazardous Waste Act, a permit must be obtained before hazardous waste can be exported out of Australia. A basic requirement of the Act is that waste shipments may only take place between countries which are parties to the Basel Convention, except where a specific formal arrangement exists. The Australian Government has banned exports of waste for final disposal except in exceptional circumstances, therefore not knowing whether your waste is being recovered or going to landfill can leave you exposed.

Damien Wigley, General Manager, Equilibrium, explains the company offers a step-wise service to the waste industry which can help alleviate downstream supply chain uncertainty and better track waste movements.

To identify and generate downstream supply chain distribution networks, Damien says Equilibrium has used multiple platforms to inform the program and is currently considering the application of blockchain for such purposes.

“A comprehensive process is required to clearly understand the movement of waste streams initially and it can vary depending on the type of materials and where (internationally) they are being sent to.

“There may be some certification system that requires the tracking of materials and that information may be accessible by a product stewardship program or another voluntary scheme, but to understand the document trail and access it in a timely manner is complicated,” Damien says.

“We’ve invested a number of years and resources into this program, including examining numerous certification processes such as the Conflict Minerals Programme as well as the Forest Stewardship Council and how they access and develop chain of custody programs.”

An example of Equilibrium’s work is how it is assisting the Federal Government Department of the Environment and Energy and its administration of the National Television and Computer Recycling Scheme (NTCRS). Equilibrium helped the Department to develop a methodology to assess the material recovery rate of e-waste.

“We had to look at places around the world to see how the material was being recycled and ensure it was consistent with the NTCRS and specific requirements under the Product Stewardship (Televisions and Computers) Regulations,” Nicholas says.

“We considered several certification schemes and their requirements to ensure a document trail was accessible, and to say with confidence that we knew where the material was going.”

He says it is not a straightforward process, potentially involving multiple parties who may not want to share information that they consider to be intellectual property.

Equilibrium is on hand to assist clients in developing a tailored program that is relevant to the business and meets all requirements, both internal and external.

You can download Equilibrium’s downstream assurance information sheet here.

Originally published on 13 March 2018 in Waste Management online.

Blockchain and Environmental Applications

Digital disruption applied to environmental objectives holds great potential to build transparency across the supply chain

The need to confirm, verify and certify processes and outcomes is a major element in responsible and measurable environmental management, be it to establish accurate disposal paths, quantify recovered materials or document a robust chain of data and activity.

From forestry and fisheries through to energy, carbon reduction and abatement programs and the recycling and recovery of waste, the need for unassailable digital tools is an essential part of responsible environmental management and business sustainability in the broadest sense.

How often do we hear about the need for effective ‘chain of custody’ for materials or a particular product, or for certified recycling outcomes?

Digital solutions that are free of any single vested interest, and have the architecture to enable transparency and widespread adoption, will allow organisations, and their sustainability practitioners to reach new levels of knowledge transfer, environmental performance, supplier accountability and customer confidence.

Blockchain 101

There are plenty of definitions with a recurring theme but it’s all about decentralization through a platform ‘owned by no one and useable by everyone’.  In very simple terms it’s a ‘shared record book’.

Some succinct explanations further describe its essential characteristics:

“Blockchain is a decentralized digitized database that maintains a list of records of a complete history of transactions or movements of a product.”

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Read more: Don & Alex Tapscott, authors Blockchain Revolution (2016)

Because the “chain” can’t be modified it can immediately provide proof of purchase for any transaction, whether that be procurement of sustainable materials to purchasing renewable energy.

Fundamental to the structure of blockchains is the ability to maintain encrypted copies of any information stored on every server or “node” in the network.

Blockchain systems record all transactions, enabling a transparent trail that can be easily audited, even automatically which can be used to validate transactions preventing double counting and the authenticity of chain of custodies around products and materials.

Relevance to sustainability and environmental objectives

So could the blockchain be part of the transparency revolution that business sustainability demands?

Heather Clancy, the editorial director of GreenBiz talks about the blockchain’s emerging role in sustainability in a manner that is both plausible and compelling. The scenarios she describes are clear candidates highlighting how a ‘shared record book’ can bring noteworthy environmental benefit and customer confidence through the ultimate in transparent platforms.

“Picture, if you will, a tracking system that discreetly verifies the provenance of products as they move across a supply chain — sending proactive alerts about unexpected detours that could signal potential tampering or environmental conditions that might pose safety issues. Or, imagine a database that monitors the clean electricity generated by on-site solar panels, issues renewable energy certificates as certain production thresholds are achieved, then distributes them according to predetermined contracts. Automatically.”

Clancy however is a realist and acknowledging the hype but certainly not dismissing the blockchain and its future applications. While lavish claims and embellishment are the norm for early innovations and over-excited entrepreneurs, there is a logic and clarity around why and how the blockchain can address data and verification gaps not always possible or reliable via conventional methods and systems.

“While the hype level seen during 2016 isn’t likely to last — it sometimes seems every other tech headline is rife with blockchain promises — the next few years will usher a wave of experiments. Where sustainability professionals are likely to see the most action: among utilities or renewable energy developers seeking a more efficient way of pricing and selling clean power; at consumer products companies and retailers seeking a better way of validating supply-chain claims; and among banks and insurance companies interested in verifying the provenance of minerals, commodities or raw materials.”

In support of her insights, Clancy shares some specific examples of companies to watch and how they are utilising the blockchain to address a diverse range of energy, environment and supply chain imperatives from conflict minerals and product life-cycle management all the way through to renewable energy trading:

IBM — sells a private cloud service that could help organizations develop and get blockchain applications up and running quickly. Its technology is behind pilots by retailer Walmart, for food safety, and Everledger, which certifies the origins of diamonds.

LO3 Energy — its TransactiveGrid system helps automate the trading of power across microgrids. The startup just scored a notable strategic partner, German energy management company Siemens. (A similar company is Australia’s PowerLedger.)

Nasdaq — has been investing in blockchain technology for more than three years. Its Linq service could be the foundation for new business models, such as a system for issuing renewable energy credits automatically.

Provenance — a relatively low-key London firm has piloted the use of blockchain to track tuna supply chains in Indonesia and to monitor produce for British grocer Co-op Food. It wants to make it simpler for companies to verify sustainability claims.

Skuchain — the California startup’s software is behind a test by Commonwealth Bank and Wells Fargo initially focused on trading cotton between Texas and China.

Heather Clancy’s article complete with more detail can be viewed at GreenBiz. It is a reader-friendly excerpt from a more comprehensive report published in partnership with Trucost in 2017. Read more: https://www.greenbiz.com/article/blockchains-emerging-role-sustainability

Indeed we have local examples. Power Ledger based in Perth has launched a successful ICO (Initial Coin Offering). The company uses a blockchain platform that allows neighbours to trade surplus energy from rooftop solar panels and batteries at prices that exceed feed-in-tariffs, as well as sharing solar panels and batteries on multi-dwelling apartment blocks and community facilities. Read more here: http://www.afr.com/news/power-ledger-builds-energy-business-amid-bitcoin-mayhem-20171215-h05c5v#ixzz55AxqIDbH

The World Economic Forum has also been proactively discussing the relevance of the blockchain and its role in helping deal with climate change and resource conservation.

In relation to climate change the WEF speculates on what’s possible, desirable and necessary staying that the blockchain features benefits for both producer and consumer, as well as other players throughout the supply chain:

“Imagine a world in which carbon emissions and credits can be tracked transparently and reliably. Retailers will be able to sell a product and take into account the carbon impact it creates at the same time. Governments will be able to measure, track and trade emissions transparently. And crucially, for the first time consumers will be able to understand the environmental impact of the products they are buying – both positive and negative – at the point of sale, and will be able to mitigate this in an instant, with millions of micro-transactions scaling up to make a huge collective impact.”  Read more: https://www.weforum.org/agenda/2017/09/carbon-currency-blockchain-poseidon-ecosphere/

New uses and applications emerge weekly which also highlights that the platform has captured the imagination of innovators and entrepreneurs, as well as the major financial institutions who have much to gain and lose should they not understand its potential.

The here and now of the blockchain is mostly being used in cryptocurrency because of its two main advantages i.e. the highly secure nature of the platform, and its transparency. These attributes have been quickly identified by users as the ‘shared record book’ reaches into new markets and solutions, including:

> Plastic Bank: uses blockchain technology to pay for the collection of plastic in poverty-stricken areas reducing the overall waste.

> Poseidon+: carbon credit market that will allow consumers to purchase climate positive products and having the confidence to trust it because of blockchain tracking.

> Catenaut: is blockchain made for a timber supply chain, knowing where the timber comes from and the amount coming in accurately.

Ultimately the blockchain delivers a degree of transparency that in fact spawns new uses, or improved uses compared to conventional, less-secure methods and systems.

A blockchain future will be able to:

> track energy in a decentralized system
> track products from cradle to grave/ tracking products that may be reused/recycled
> track food sources i.e. consumers knowing where it comes from. Seeing food miles and other information
> continually track products across and throughout the supply chain
> accurately audit supply chains as it provides a clear paper trail of products that cannot be tampered

Its success and widespread application will in part depend on compelling, evidence-based case-studies that stimulate thinking across sectors and industries, including energy, water, waste, mining, agriculture and fisheries.

If the blockchain can achieve a step-change improvement in relation to accurate data sharing, verification, monitoring and tracking, then we are likely to see greater uptake over the coming months and years. And if its application can directly and indirectly contribute to achieving a more resource efficient and productive sustainable future then its value-adding capacity is noteworthy.

It could also be the platform that helps to underpin the circular economy and its focus on extending the life of products, components and materials to unprecedented levels.

Transparency combined with closed loops is a powerful partnership in pursuit of regenerative and restorative solutions.

Authored by: John Gertsakis and Tom Pollock from Equilibrium
31 January 2018