BIOELEKTRA. A Circular Economy Business Model Case

Abstract

This report presents the results of the Bioelektra case study, selected in the framework of the R2PI project, among 17 other cases. The mission of this company is to change the way people think of waste management, by using advanced technology. The information contained in the report is based on the methodology designed within the framework of the R2PI project to understand the characteristics of the business model, evaluate its outcomes and identify the main barriers and enablers. Bioelektra has developed and utilized the innovative technology for municipal solid waste as a complementary solution to waste management. The activity of the company is based on a mechanical-heat waste treatment (MHT) called RotoSteril, different from traditional technology of municipal waste treatment. Waste is sterilized at high temperature and pressure, which kills all microorganisms in waste and makes it odourless. Subsequently sterilized waste is sorted into usable fractions of different secondary raw materials, organic fraction and RDF. These fractions can be further used to other processes and products. Usually these fractions are sold to recyclers. The identified business model of Bioelektra is resource recovery. The contribution of Bioelektra to the closed loop is primarily based on a very high recycling rate - up to 96% of municipal solid waste stream with no need of separate collection. At the municipal level in different countries one can still find a significant amount of waste without separate collection. This innovative technology enables lower “gate fee” for municipalities (and finally for residents) and high revenue from fractions. The report also presents an assessment of the circularity of the business model. Traditionally, the waste management sector in the EU was described as a “collect and dispose” operation: collecting mixed waste streams from municipal and commercial sources and disposing of the waste to landfill or through incineration. The waste management system in the circular economy will have to go beyond such an end-of-pipe approach to become an integral part of an economy, closely linked to patterns of production and consumption. Circular product design should be based on the feedback from the waste management sector concerning the ways to remanufacture, dismantle and recycle. At the same time the waste management sector should become a partner in developing circular business models focused on waste prevention and turning waste into resources. Activity of Bioelektra Group is based on the improving circular economy model since the very beginning. The aim of establishing the company was to implement and deliver the technology of waste treatment allowing recovery every material from waste. Bioelektra was focused on reducing the negative impact on the environment in waste management. The company was involved in the process that allow to obtain clean secondary raw materials and organic fraction, ideal for recycling purposes. It has now the full control concerning the composition of final products – recyclates - that they obtain. Those products can circulate in the economy for longer. But Bioelektra is not a manufacturer, so real circularity is out of their business model. Bioelektra fulfils its own function towards the circularity of the economy by addressing some of the challenges, but they don’t have complete control over their remanufactured products. As shown in the report, Bioelektra has created a waste treatment technology that can unveil resource potential in waste. It allows for simple methods of waste management in the cases where there is no segregation-at-source. The technology respects local community by making waste odourless. It is also the most financially viable waste treatment technology – according to managers from the company, as municipal solid waste is sterilised and turned into resources. It creates new opportunities for local economies in different parts of the world by delivering streams of recycled resources as secondary raw materials to the market by achieving a diversion rate of over 96% from landfill. Crucial for the business success of Bioelektra is the legal framework. Some provisions of EU law, especially in Directive on Waste, creates many opportunities for Bioelektra to expand. The constant increase of recycling level, which is declared by EU can create much bigger market for Bioelektra services. Limiting the biodegradable municipal waste going to landfills can create another possible opportunity, as well as a radical decrease in the amount of waste disposed in landfills, while increase of recycling and the recovery of waste. Based on the analysis, it is concluded that the resource recovery CEBM is replicable and transferable, especially that Bioelektra’s technology is fully scalable to the size of the waste stream and can be adjusted up and down in scale during its operations by adding or taking out autoclaves. Autoclaves are easy to transport, and installation is rather fast. Most of the investment cost is machinery and equipment which makes it ideal for external financing (bank or leasing). The construction costs are usually 10-20% of the total CAPEX. Technology is 100% environmentally friendly – it is odourless, there is no leakage, fumes and sewage system needed thus public acceptance and support can be expected. All these requirements are easy to meet thanks to Bioelektra technology – which creates many possibilities for strategic development of the company. However, the regulatory framework on the national level is now the biggest threat for Bioelektra, especially different interpretation of the EU legal requirement in different countries