Circular business is about partnership and teamwork

Harvesting energy from waste? That’s what the new heat network does in the Antwerp North district, the first open access network in Flanders. It’s a great example of circular business, bringing together the interests of industry, population and society. It also made a great theme for our first sustainability event of 2024, where not only the opportunities but also the obstacles of circular business provided fodder for a debate by five experts from the field.

Challenges of circular business

Paul De Bruycker, CEO of Indaver
Indaver has grown from a local waste treatment company into an international player that is committed to materials recovery, extracting energy from waste and building heat networks (such as the ones in Antwerp North and Ecluse).

It all starts with the belief that circular choices add value in the long run: for your customers, for your business and for society. You have to be creative and dare to look beyond individual sectors.

Circular business is really just a matter of doing business sensibly and with a long-term focus. You adapt your business model to different cost drivers from those in the linear economy. Circular business challenges you to think creatively, step off the beaten track and look beyond individual companies and sectors. Because circular business is all about collaboration, and that entails greater variability. Partners with different processes, different customers and different stakeholders make your business more complex and change your risk profile.
And yet... if there is value for all parties in forging an alliance, it’s very easy to work together. You first work out the basic principles: how do we distribute the income and the expenses, how do we define and manage the risks? Then follows the handshake and you can get down to work on the detail. Such collaborations can reduce the demand for heat and energy, as well as reducing material use. The biggest challenge for the future? Keeping raw materials in the chain. Using them to make products that are as good as those made using virgin materials, and that can also compete with them in terms of price.

Circular business in practice

Giovanni Vercammen, Group Chief Energy & Technology Officer at Boortmalt
Boortmalt is an international malt producer, which began life in the Belgian town of Boortmeerbeek but has now grown into a major player with a global footprint, which has been able to reduce its CO2 emissions, in part thanks to the use of residual heat from Indaver. Malt is the main raw material used in the production of beer, whisky and various snacks.

The key is to move away from endless internal discussions and simply take the bull by the horns. You have to look around you: who knows, there might be a potential partner for your company around the corner.

The malting sector is a major consumer of energy; Boortmalt’s consumption is around 2 terawatt hours per year, three-quarters of which is in the form of heat and a quarter in the form of electricity. It goes without saying that we are keen to reduce our consumption further and make it greener. The collaboration with Indaver started with a wild idea from two company managers, and it took a long time to gestate into a feasible and licensable project. Decarbonisation costs money, but we think it’s so important that we want to play a leading role in our sector. That’s reflected in our targets (Science Based Technology initiative): by mid-2030 we aim to have reduced our net CO2 emissions by 50%, and by 2035 we hope to be climate-neutral. That means our climate goals are even more ambitious than those in the Paris Climate Agreement, which sets this target for 2050.
Currently, we are already saving around 30 000 tonnes of CO2 emissions a year by using residual heat from Indaver. Finding the solution so close at hand was an eye-opener, though. That’s why we now always scan the local area when we are looking to decarbonise a site. Boortmalt not only uses a lot of energy, but also a lot of water. It’s inherent in our production process: you have to bring the barley grains 'to life' by immersing them in water up to three times. We used to drain away that water every time. Now we are working on reusing it, by using membrane filtration, reverse osmosis and other techniques. Instead of using 3000 litres of water for every tonne of malt, we are looking to get the figure below 2000 litres per tonne by 2030. So we’ve effectively also created our own circular circuit - including for our own waste heat, as it happens.

Circular knowledge

Ann Wouters, Programme Manager for Thermal Energy Systems at VITO
VITO works in the field of sustainable energy in partnership with the KUL, IMEC and UHasselt research institutes under the banner EnergyVille, translating research into practice through collaboration with commercial companies.

You have to go for a win-win partnership. And you have to make your voice heard in research so that you can help shape tomorrow's choices.

In the circular economy, you are working among other things with residual streams. Those residual streams are worth money. Yet some think they should be free because otherwise they would be lost anyway. But that's not true: capturing those residual streams requires investment. Moreover, it’s a long-term commitment. As a benchmark, you could apply the principle that a circular product, for example heat generated from waste, should not be more expensive than a linear product, such as heat generated from gas. The 'no more than usual' principle, if you like. While doing so, do keep in mind the social cost.
Actually, circular business doesn’t always require major investments: setting up an energy community or an energy sharing initiative is a lot cheaper than investing in a heat network, for example. As an SME, you could for example invest in solar panels and make the proceeds available to your employees. Or vice versa, of course.

843765236

In the circular economy, you are working among other things with residual streams. Those residual streams are worth money. Yet some think they should be free because otherwise they would be lost anyway. But that's not true: capturing those residual streams requires investment. Moreover, it’s a long-term commitment. As a benchmark, you could apply the principle that a circular product, for example heat generated from waste, should not be more expensive than a linear product, such as heat generated from gas. The 'no more than usual' principle, if you like. While doing so, do keep in mind the social cost.
Actually, circular business doesn’t always require major investments: setting up an energy community or an energy sharing initiative is a lot cheaper than investing in a heat network, for example. As an SME, you could for example invest in solar panels and make the proceeds available to your employees. Or vice versa, of course.

Circular community builder

Didier van Osselaer, Sustainable Transition manager at Port of Antwerp-Bruges
Port of Antwerp-Bruges is increasingly committed to working in partnership for and investing in a circular economy.

You need to actively look for possible partnerships, be open and dare to discuss knowledge gaps and uncertainties.

The Port Authority used to be a landlord that could afford to focus entirely on building docks, quay walls and locks. Today, Port of Antwerp-Bruges has assumed the role of community builder; we know our port users and act as a neutral party. We put the companies on our site in contact with each other. And we take a seat as a partner at the table to help facilitate major investments, for example for the Antwerp North and Ecluse heat networks..
We are also strongly committed to recycling raw materials. It’s not just a matter of improving efficiency, but also of geopolitical considerations: circularity is one of the most important factors in securing our supply of raw materials in the future. That’s why we are now giving space on the former Opel site in Antwerp to companies that recycle raw materials, such as propylene and polyurethane, from things such as mattresses, insulation panels, car tyres, and so on, and also to companies which design new processes. But of course it doesn't stop there. In addition to having the necessary space and adequate policies, it will be a particular challenge to secure continuous access to the volumes of raw materials needed, and, of course, to find customers who are willing to work with recycled raw materials.

Circular government

Bart Martens, Environmental Policy Advisor for the City of Antwerp
Among other things, Antwerp purifies wastewater to create cooling water for industry, and also extracts energy from it. The city also supports heat networks as well as wind and solar energy.

You have to try to be a matchmaker. And make it easier for others to join in your narrative.

In the city of Antwerp, we are aiming to reduce greenhouse gas emissions by at least 50% by 2030 compared to 2005. If we can use waste heat from the port area to heat homes in the city, we are already taking a big step towards achieving that goal. The aim is that, by 2030, 10% of heat should come from heat networks. To achieve that will require a critical mass of customers (for example the social housing owned by the Woonhaven housing association), continuity of customers (such as Boortmalt), and stable 'suppliers' of waste heat (such as Indaver).
If the regional government wants heat networks to be designed so that multiple producers and customers can connect to them later – and it does – it must also provide a stable subsidy framework to help finance the initial excess capacity. In addition, the government can also take a financial stake in the public infrastructure for those networks and in the installations needed to connect companies to them. We are doing that in Antwerp, too, through the public investment company FINEG. This reduces costs for the companies concerned and enables them to keep these investments off the balance sheet.
There is also an important social aspect, and we try to make it more accessible. For instance, we have temporarily waived the payment of municipal surcharges for groups of existing owners connecting to the heat network. And finally, we are seeing a lot of technology ‘push’ from the government, but too little pull from the market. For instance, the government could stimulate market demand for ‘green’ steel by providing guidelines on the use of materials in new products in the market, in addition to formulating end-of-life standards.
A city can act as a matchmaker between the supply and demand side of the energy market, but a broader approach would be even better. For example, the energy policy agreements that energy-intensive companies enter into with the Flemish government provide us with a lot of data on waste heat and heat demand. A neutral party could match up those two factors. A kind of Tinder for heat and energy, that's what we need! Maybe something for VITO?

Want to learn more about cicular economics? Be sure to read this article.

Group photo: from left to right: Filip Ferrante (Senior General Manager Corporate Sustainability, KBC and moderator of the debate) Wim Eraly (Senior General Manager Commercial Banking, KBC), Bart Martens (City of Antwerp), Didier Van Osselaer (Port of Antwerp-Bruges), Giovanni Vercammen (Boortmalt), Paul De Bruycker (Indaver), An Wouters (VITO), Johan Thijs (CEO KBC Group) and David Moucheron (CEO Belgium Business Unit, KBC Group)

Would you also like to have a more sustainable and circular business?

Talk it through with your relationship manager or be inspired by the testimonials of other entrepreneurs, read our articles, re-watch a webinar or Hans Dewachter's monthly vlog, follow us on the LinkedIn KBC Entrepreneurship channel, and meet other entrepreneurs and experts at one of our events. We will be organising a second sustainability event in the autumn.

Disclaimer:
Unless expressly provided otherwise, all information you consult or obtain here has a non-binding and purely informational value. It is updated to the best of our ability and at regular intervals. However, KBC Bank NV gives no guarantees as to the topicality, accuracy, correctness, completeness or suitability for a particular purpose of this information. The information provided here does not constitute advice or an offer to sell products or services and is not intended for commercial use. You remain fully responsible for the consequences of the use you make of this information. The intellectual property rights to the information, publications and data provided here belong to KBC Bank NV or third parties and you must refrain from any infringement thereof. Except with the express prior and written consent of KBC Bank NV, any transfer, sale, distribution or reproduction of this information is prohibited.