Link and Loop.
The Path to Resilience:
2021-2022
Circular Supply Chain
Outlook for Taiwan and Europe
Circular Supply Chain
"Circular Supply Chain" refers to an economic system in which products and resources can be continuously recycled to maximize their utilization value. The specific approach is to redefine the tasks of each role in the supply chain and transform the waste from production and consumption into materials or products with market value again. A sound global circular supply chain depends on the joint efforts of governments, brands, suppliers, consumers and nonprofit organizations.
Demand for PET
The polyester raw material "polyethylene terephthalate" (PET) is widely used in the production of plastic containers and textile garments. According to BNEF's long-term forecast, approximately 75% of materials currently come from the mining of petrochemical materials, and 25% come from recycled materials (rPET). With recycled materials gradually replacing virgin materials, the market share of rPET is expected to reach more than 80% in 2050.
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Demand for Aluminum
Aluminum alloy is an important industrial raw material given its high strength, high quality and lightweight properties. It is used in various vehicles and electronic products, and because of its excellent ductility, it can also be used for packaging. Although 68% aluminum is currently sourced from mining and 32% from recycled materials, it is expected that the market share of recycled aluminum will exceed that of virgin aluminum in 2050 by BNEF.
Supply Chain Risk
According to BNEF's Global Supply Chain Sustainability Risk Analysis, global brands linked with sustainability initiatives have a total purchase amount exceeding US$400 billion. Globally, Taiwan ranks third in greatest value of suppliers linked to these brands, second only to the United States and Japan. Taiwan's supply chain manufacturers, the majority of which are in the ICT and electronics, textile and clothing industries, are affected by more than US$50 billion.
Taiwan's Capacity
Taiwan has established mature and complete recycling and management systems. 1,765 recycling companies convert industrial waste into over 230 types of recycled products (recycled plastics, recycled metals, recycled fuels, recycled solvents, etc.) which can be used as alternative raw materials or fuels for industries. In 2002, the recycling industry’s create circular production value was at US$830 million, and quickly grew to US$2,479 million in 2020.
Taiwan's Cases
Companies in Taiwan set ambitious goals to reduce the use of resources and to replace virgin materials with recycled materials. There have been some remarkable early pioneering success stories. Taiwanese companies cooperated with international organisations and brands to reprocess waste into highend boutique products, such as PET cycle - from B2T to B2B to T2T; marine litter - a paradigm for recycling upgradation; Waste rubber - from waste tires to wetsuits and game mats; urban mining - precious metals
Matching Mechanism
The Industrial Development Bureau (IDB) of the Ministry of Economic Affairs (MOEA) converted and upgraded Taiwan’s unique waste declaration database into the "Industrial Circular Economy Information Platform" to promote industrial symbiosis and recycling of materials. Since 2020, IDB has focused on improving the “Brand Supply Chain Matching Mechanism.” The goal is to create successful partnerships between global brands and domestic suppliers through efficient communication, bridging cultures and language barriers and building trust.
4-Phase Process
Phase 1 - Investigating Brand Procurement Requirements: the IDB team and the brands establish an order of prioritized items based on the brands’ needs. Phase 2 - Searching for Supply Chain Partners: the IDB team filters for potential suppliers through the intelligent database and inspects their production capacity and quality. Phase 3 - Matching Supply and Demand: the IDB team organizes matching meetings. Phase 4 - Continuous Cooperation: the IDB team acts as a neutral third party by providing consultation on recycling-related laws and regulations, green upgrades, applications for government subsidies, and more.
Industrial Information Platform
In order to facilitate the management and grasp the flow of various types of industrial waste, the government of Taiwan has set up the world's only real-time online reporting system. To expedite the evaluation of information on circular materials and to help manufacturers quickly find suitable recycled materials, IDB uses technology and big data analysis. This analysis is then given to the "Industrial Information Platform of Circular Economy" as a tool to promote industrial symbiosis and renewable materials.