In a world that continues to reel from the economic turmoil of recent years, embracing more circular ways of conducting business is increasingly seen as a way to ensure long-term resilience. Such an approach reuses, repairs, refurbishes and recycles materials and resources within the economy for as long as possible, decoupling economic activity from the consumption of finite resources.
Estimates from technology firm Accenture highlight that circular economy models could generate $4.5 trillion of additional economic output by 2030, making it a highly tangible shift for businesses in the 21st century.
In the real world, failure to align circularity with business interests often deters the successful implementation of such models. Recognising this early on, the UAE government has brought business interests into the fold from the outset, proving our leadership’s deep-rooted understanding of how a closed-loop business ecosystem can truly succeed.
In a bid to become a hub for circularity, the UAE Circular Economy Council introduced 22 policies focusing on four main sectors – manufacturing, food production, green infrastructure and transport – identifying specific areas of action within these priority sectors.
For instance, low-carbon vehicles, green building design, resource efficiency, and reducing food loss and waste. These underpin the government’s approach to develop ideal and practical solutions, with support from both local and multinational private sector firms.
How do businesses stand to benefit? There are multiple arenas to consider.
Arguably, the most important one is improved efficiency and innovation across the board – from costs through to resources. By designing products with durability and repairability in mind, companies can minimise the need for new resource inputs and decrease waste, leading to significant cost savings over time.
Recycling, reusing and refurbishing help extend the lifespan of products and materials, countering the need for virgin resources. This improves overall resource productivity and resilience, ensuring a stable supply of materials for business operations. The UAE was also the first to participate in the World Economic Forum’s (WEF) Scale 360 Initiative, which leverages digital technologies and collaborative practices for circular transition. This gives it access to a global network of circular economy experts and solutions.
Circularity invariably opens up opportunities for new revenue streams. For example, companies can explore product-as-a-service models, where customers pay for the use or performance of a product rather than owning it outright. This can incentivise manufacturers to design long-lasting and resource-efficient products while creating ongoing revenue streams through maintenance, upgrades, and material recovery.
The implementation of new business models also paves way for new jobs. The International Labour Office (ILO) estimates that transitioning to a circular economy could create six million jobs worldwide. It can also help attract investments; Abu Dhabi government for instance, has earmarked AED10 billion under its industrial strategy for categories including circular economy, talent development and Industry 4.0.
Embracing a circular economy also contributes to a businesses’ reputation, demonstrating commitment to innovation and sustainability. It can help strengthen relationships with suppliers and improve overall supply chain resilience.
Business leading UAE’s circular revolution
We have already seen some examples in action: Emirates Global Aluminium is supplying more than 200,000 tonnes of smelting by-product to other industries, diverting waste from landfill; BEEAH Group, the UAE Ministry of Energy and Infrastructure (MOEI) and the American University of Sharjah are jointly exploring ideas to build the UAE’s first recycling plant for end-of-life electric vehicle batteries; Dubai Municipality has inaugurated construction of one of the world’s largest waste-to-energy facilities, which will process 1.9 million tonnes of municipal waste per year, producing approximately 200 MW of renewable electricity.
At this time, there is no mandate to adopt circular business practices in the UAE. But it is difficult to imagine a future without circularity. Those that put in the fundamentals now stand to benefit in the long run, while also readying themselves for any regulatory changes.
The government is providing ample room for dialogue. It is now on businesses to collaboratively design and implement policies that make business sense.
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