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Section 12 Managing the transition to a circular economy Christian Growitsch (Fraunhofer IMWS) Christoph M. Schmidt (RWI - Leibniz-Institut fu ̈r Wirtschaftsforschung) 12.1 Importance of subject Transforming industrial sectors that are strongly based on fossil resources and frequently do not address the complete life cycle of their products, such as the chemical industry, might prove a Herculean challenge. However, managing the transition to an economy that is based on sustainable raw materials, production processes, and consumption patterns is indispensable for a successful climate policy that also creates and sustains economic prosperity.1 This holds especially true for the chemical industry, which currently emits substantial amounts of CO2 due to its large energy demand and production processes. Furthermore, its products litter the oceans (plastic waste) and harm ecosystems (eutrophication). Therefore, current production processes and business practices are increasingly subject to both tightening regulation and intense public discussion, ultimately threatening the industry’s license to operate. A transition to new production and business models is therefore of major importance to both the environment and the industry itself. Effective solutions will use renewable sources as primary input, both for energy and raw materials, and ‘close the carbon circle’ i.e. develop products which can be recycled at end of life (Figure 2). Such a system is referred to as a ‘circular economy’. However, for the transition to such a circular economy to be successful, substantial changes are needed. Specifically, volumes must be reduced, primary and recycled materials integrated, and 1The OECD [1] provides an overview of the consequences of climate change on economic growth and on different drivers of growth, in different sectors across the world, while Tol [2] documents a remarkably wide range of estimates of the welfare impacts of climate change. 119PDF Image | sustainable production of fuels and chemicals
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