Adopting circular economy business models for the manufacturing and deployment of equipment.

Key to realising a circular economy (CE) is the adoption of new business models, manufacturing and deploying technologies with their whole life cycle in mind: modular building for deconstruction, remanufacturing and reprocessing. Minimising the leakage of material, but also energy, from the economic system is a fundamental principle of the CE. Rethinking the design, manufacture and use of low-carbon heat technologies, services and systems in a circular manner not only enhances the decarbonisation effort but has the potential to increase the uptake of low-carbon heating solutions.
Zero Waste Scotland exists to lead Scotland to use products and resources responsibly, focusing on where we can have the greatest impact on climate change. Using evidence and insight, our goal is to inform policy, and motivate individuals and businesses to embrace the environmental, economic, and social benefits of a circular economy. We are a not-for-profit environmental organisation, funded by the Scottish Government. For further details see https://www.zerowastescotland.org.ukk

A principal opportunity for Scotland is adopting circular economy business models for the manufacturing and deployment of energy transition equipment such as heat pumps, electrical heating systems and electrical control systems.
Heating our homes, businesses and water accounts for over 40% of Scotland’s energy consumption. This impacts fuel poverty and greenhouse gas emissions and accounts for approximately 20% of Scotland’s total greenhouse gas emissions. Retrofitting our buildings for energy efficiency and decarbonisation of our heating systems while considering a just transition is critical to drastically reduce energy consumption related emissions, increase security of our energy supply and mitigate against the impact of price volatility.
The upcoming Zero Waste Scotland publication – Energy Infrastructure Materials Mapping - forecasts the number of domestic heat pumps could reach up to 272,000 by 20302 and between 1.3-2.5 million units by 20502. This highlights the scale of the deployment of such equipment needed to decarbonise.
Adopting CE approaches can bring down the levelized cost of energy and heat provision by maximising equipment lifetimes and minimising end-of-life disposal costs (potentially even having inherent economic value left in the equipment deployed).
Adopting CE approaches can also enable the cost-effective deployment of comparatively expensive low-carbon heating technologies like heat pumps by providing customers offerings such as “heat as a service”. Providers can facilitate the uptake of low-carbon heating products (and potentially even expensive insulation via energy performance contracts) by eliminating or reducing the upfront cost to the end-customer. For example, Best Green is a Danish company that provides “heat as a service” to homes and non-residential clients through pay per kWh (heat) via heat pumps. Best Green retains ownership of the heating equipment, leasing it to clients, and can therefore optimise its use as well as control the components used and their potential refurbishment.
Sustainability principles and practice is not new to the renewable energy sector. Energy recovery technologies are a good example of this: wastewater and sewer heat recovery, for instance, intercept a waste stream, maximise value from waste, and reduce carbon emissions. Especially for urban areas in Scotland, the scale of opportunity to maximise the potential of such technologies is large and currently unexploited.
Building on circular energy system thinking and adopting CE business models offer the next leap to advance Scotland’s net zero ambitions, while also mitigating global biodiversity loss4 and generating new economic opportunities such as green jobs in Scotland for a just transition.
1Scottish Government (2021) Heat in Buildings Strategy - achieving net zero emissions in Scotland's buildings https://www.gov.scot/publications/heat-buildings-strategy-achieving-net-zero-emissions-scotlands-buildings/pages/3/
2Modelling estimates 14,000 domestic heatpumps operational in Scotland in 2020 based on using Scottish population as a proportion of the UK and using UK Government (2021). Net Zero Strategy: Build Back Greener Data
3Zero Waste Scotland (unpublished manuscript). Energy Infrastructure Materials Mapping.
4The extraction and processing of materials, including fuels and food, is estimated to contribute to 50% of total global greenhouse gas emissions and over 90% of biodiversity loss and water stress. International Resources Panel (IRP). (2019). Global resources outlook. 2019: natural resources for the future we want. Retrieved from: IRP website