The strongest circular opportunities do not merely find somewhere for waste to go; they remove something the system would otherwise have to buy, process or dispose of.
Many circular-economy initiatives begin with the waste stream. What can be made from it? Where can it be reused? Can it be converted into a saleable product? These are reasonable questions, but they can lead to weak projects when the recovered output has no committed demand, low value or expensive purification requirements.
A stronger starting point is the input side of the system.
Which costly material, chemical, fuel, treatment step or disposal burden could this residual stream replace?
Three 2017 research papers illustrate different versions of that logic. Spasiano and colleagues tested dark-fermentation effluent as a pretreatment medium for a simulated cement-asbestos composite, aiming to reduce the acid and energy burden of subsequent treatment while producing hydrogen. Nabi and colleagues evaluated waste-cooking-oil biodiesel as a partial substitute for petroleum diesel, showing both emissions benefits and operating trade-offs. Tambe and Yadav used carbon dioxide as a carbonylating feedstock in a laboratory synthesis route intended to avoid more hazardous conventional chemistry.
None of these studies proves a universal commercial solution. Together, however, they reveal a more disciplined approach to circular value creation: design the residual stream into an existing cost structure.
The Strategic Context
Waste valorisation frequently fails for one of three reasons. The recovered material is too expensive to produce, its quality is inconsistent, or the market value is lower than the cost of separation and processing. In each case, the project was framed as a waste problem rather than as an input-substitution opportunity.
The dark-fermentation study is strategically interesting because it proposes process integration. The researchers used volatile fatty acids generated by fermentation to dissolve the cement phase of a glass-fibre cement surrogate. They also produced hydrogen during fermentation. The ambition was that one biological step could reduce the need for purchased acid and potentially provide a renewable energy contribution to the subsequent hydrothermal process.
The study was preliminary. It did not use real asbestos-containing cement in the reported experiments, and the authors called for further work on real waste streams, complete process integration and lifecycle assessment. The strategic insight therefore lies in the architecture, not in declaring the process commercially ready.
The biodiesel study shows a different form of substitution. Waste cooking oil becomes fuel feedstock, displacing a portion of petroleum diesel. Under the tested Euro-III engine cycle, the blends reduced carbon monoxide, unburned hydrocarbons, particulate mass and particle number relative to diesel. Yet higher biodiesel content also carried a brake-specific fuel-consumption penalty, and the 60 per cent blend showed somewhat higher NOx in much of the test. The authors recommended the 20 per cent blend after considering broader operating issues.
The carbonylation study used CO2 as a feedstock to synthesise benzimidazolone through a heterogeneous catalyst route. In the laboratory system, the authors reported 79 per cent conversion and 100 per cent selectivity under optimised conditions, with the catalyst reused across three cycles without reported loss of activity. Again, the strategic value is not the claim that CO2 utilisation is automatically climate beneficial. It is the possibility of replacing a more problematic carbonylating route with a different feedstock and catalyst architecture.
What Leaders Commonly Misread
The first error is to assume that waste has value because it contains useful matter or energy. Potential value and captured value are different. Value is captured only after collection, conditioning, conversion, quality control, logistics and market integration.
The second error is to celebrate conversion yield without pricing the displaced input. A project that recovers 90 per cent of a low-value material may be weaker than one that recovers 50 per cent of a material that replaces an expensive chemical or hazardous treatment step.
The third error is to ignore operating penalties. The waste-cooking-oil biodiesel study is a useful reminder. Emissions improved across several dimensions, but fuel consumption and NOx behaviour complicated the decision. Circular feedstock content alone did not determine the preferred blend.
The fourth error is to treat any use of CO2 as carbon removal. Carbon dioxide can be a useful chemical feedstock without producing durable net climate benefit. The lifecycle source, energy requirements, residence time and end use matter. The supplied carbonylation study was a chemistry study, not a full lifecycle carbon-removal assessment.
The fifth error is to understate preprocessing. In the dark-fermentation study, particle size and diffusional resistance materially affected dissolution. A waste stream that can perform a useful function may still require expensive conditioning before that function is available.
Related article: Waste Is Not a Resource Until the System Can Capture Value
Reframing the Issue
Circularity should be reframed as a system substitution problem.
The relevant chain is:
Residual stream → conditioning → useful property → displaced input or burden → operating consequences → net value
This shifts attention from the output product to the economic function it performs.
If a fermentation effluent can replace purchased acid, the business case includes avoided chemical cost and possibly lower hazard handling. If waste oil can replace part of petroleum fuel, the case includes fuel value, collection cost, blend performance and emissions consequences. If CO2 can replace a hazardous carbonylating route, the case includes feedstock, catalyst, pressure, energy, safety and downstream processing.
The value proposition becomes specific and measurable.
Strategic Analysis: Search for Avoided Cost Before New Revenue
Avoided input cost is often more bankable than speculative revenue
A recovered product sold into an external market depends on price, demand and customer qualification. A recovered stream used internally to replace an existing purchase can have a clearer reference value.
This does not make internal use automatically superior. It simply gives the organisation a known counterfactual: what would we otherwise buy or pay to dispose of?
Process integration can create compound value
The dark-fermentation concept is notable because one step potentially creates more than one useful output. Volatile fatty acids support pretreatment and hydrogen provides an energy carrier.
This is the essence of industrial symbiosis at process level: the by-product of one operation becomes an input to another, reducing the number of externally purchased inputs or externally managed wastes.
The strongest opportunities often sit at interfaces between processes rather than inside one unit operation.
The preferred substitution level may be partial
The biodiesel study demonstrates that maximising recycled or renewable content is not the same as maximising system value. The authors favoured a 20 per cent blend after considering emissions, fuel consumption, cold-flow properties, maintenance and other issues.
A partial substitution can be strategically superior when it captures most of the benefit while avoiding nonlinear penalties.
This should influence circular-economy portfolio design. Targets based solely on percentage recycled content can push teams beyond the economic or technical optimum.
Hazard substitution can matter as much as mass substitution
The carbonylation study was motivated partly by replacing more hazardous conventional chemistry. This suggests a broader value category: a residual or alternative feedstock may create value by reducing hazard, regulatory burden or process complexity even when material cost alone is not compelling.
The decision framework should therefore include safety and compliance consequences, not just material price.
Technology maturity still governs the investment case
Each supplied study sits at a different maturity level. Laboratory conversion, engine testing and a preliminary surrogate-based waste-treatment study are not equivalent to commercial proof.
The circular thesis should therefore be separated from the technology-readiness thesis. An opportunity can be strategically attractive while the current process technology remains unready for scale.
Related article: Peak Performance Is Not Technology Readiness
Decision Framework
A useful circular-substitution screen has eight parts.
1. Residual availability. Is the stream available at sufficient volume, consistency and geographic concentration?
2. Functional property. What useful chemical, energy or material function does it contain?
3. Displaced input. Which existing purchase, treatment step or disposal cost could it replace?
4. Conditioning burden. What sorting, purification, particle-size reduction, conversion or storage is required?
5. Substitution ratio. Is full replacement desirable, or does a partial blend create greater system value?
6. Operating consequences. What happens to yield, emissions, reliability, maintenance, safety and product quality?
7. Maturity and scale. Has the process been proven under realistic feedstock variability and operating duration?
8. Net economics. Compare avoided cost plus new revenue against collection, conversion, capital, quality-control and risk costs.
An initiative that cannot identify a specific displaced input or avoided burden should face a higher evidence threshold before capital is committed.
From Strategy to Execution
Immediate action is to map major purchased inputs and disposal costs alongside major residual streams. Look for functional matches rather than starting with recycling categories.
Medium-term capability building requires cross-functional process design. Waste owners, procurement, operations, engineering, safety and finance should evaluate the opportunity together. Circularity often fails at organisational boundaries because the team that pays for waste disposal is not the team that purchases the potential substitute.
Long-term strategic positioning can involve redesigning plants and supply chains around industrial symbiosis. This may justify shared infrastructure, co-location, long-term feedstock agreements or new product platforms. But such changes should follow stage-gated evidence: laboratory proof, pilot, integrated trial, lifecycle assessment and commercial demonstration.
Stop rules matter. If conditioning energy, contamination or quality-control cost rises beyond the displaced-input value, the project should be redesigned or terminated rather than protected because it is labelled circular.
Signals to Monitor
Monitor the price and availability of the input being displaced, variability in residual-stream quality, conditioning cost per useful unit, substitution-related maintenance effects, regulatory treatment, customer acceptance and the proportion of recovered output that actually displaces virgin input rather than creating additional consumption.
Another important signal is accumulated inventory. If recovered material is being produced faster than it can be used or sold, the project is creating a new waste problem.
Questions for the Leadership Team
- Which purchased inputs or treatment costs are large enough to justify searching for internal substitutes?
- What exact function does the residual stream provide, and what would we otherwise buy to obtain that function?
- Are we maximising recovery percentage when a lower substitution ratio would create more enterprise value?
- Which preprocessing step is most likely to destroy the economics?
- Are safety, maintenance and quality effects included in the business case?
- What evidence is still missing before laboratory or pilot performance can support capital investment?
- If the external market for the recovered product disappeared, would the project still create value internally?
Closing Perspective
Circularity becomes commercially stronger when it is attached to a clear counterfactual.
The valuable question is not simply, "Can we make something from this waste?" It is, "What does this stream allow us to stop buying, stop treating or stop disposing of, and at what total system cost?"
That shift connects circularity to procurement, process design and capital allocation. It turns waste valorisation from a sustainability aspiration into an enterprise value proposition that can be tested, compared and stopped when the economics do not hold.
Source References
- Spasiano, D., Luongo, V., Petrella, A., Alfè, M., Pirozzi, F., Fratino, U. & Piccinni, A.F. (2017). Preliminary study on the adoption of dark fermentation as pretreatment for a sustainable hydrothermal denaturation of cement-asbestos composites. Journal of Cleaner Production, 166, 172–180.
- Nabi, M.N., Zare, A., Hossain, F.M., Ristovski, Z.D. & Brown, R.J. (2017). Reductions in diesel emissions including PM and PN emissions with diesel-biodiesel blends. Journal of Cleaner Production, 166, 860–868.
- Tambe, P.R. & Yadav, G.D. (2017). Selective carbonylation of o-phenylene diamine using carbon dioxide as feedstock for synthesis of 1,3-dihydro-benzimidazol-2-one over La-Zr mixed oxide. Journal of Cleaner Production, 166, 285–298.
About EraNorth Insights
EraNorth Insights publishes practical analysis on strategy, projects, operations, transformation and decision intelligence for professional and organisational use. About EraNorth.