Since the industrial revolution, mankind has been adopting a linear production and consumption pattern of “mining raw materials from the natural environment, processing them into commodities for sale, and directly discarding the products after use”. The accompanying problems of climate change, large amounts of waste pollute the environment, and so on problems accelerate the deterioration of the earth’s ecology and make human survival a huge challenge. How to change the current linear production and consumption mode, reduce pollution and restore the earth’s ecology is an important issue for maintaining human civilization and sustainable development.
In recent years, the EU, China, Japan and other countries are in the ascendant about the discussion of circular economy. Among them, the EU is the most active, and in 2015, it took the lead in adopting the “Circular Economy Case”. According to the International World Economic Forum, the business opportunities of the circular economy will reach 500 million U.S. dollars (about NT$15 billion) in the next five years, and the potential for further development of the circular economy is evident.
“Circular economy” is an economic development model based on the continuous recycling of resources. By forming the loop of “resources, products, recycled resources” from each stage of current linear economy model through recycling, reuse, re-manufacturing/renovation, reuse, maintenance, and sharing. Reducing waste generated by manufacturing systems, and even reaching the ultimate goal of zero waste, to reduce the earth’s resource consumption and pollution.
For example, chemicals such as catalysts, solvents, abrasives, and detergents that are common in modern life have a huge influence and impact on the global environment. Driven by the increasing cost of raw materials for chemicals and the increasingly stringent environmental regulations in various countries, we have gradually paid attention to the development of chemicals, management services and leasing models.
Leasing model improves the efficiency of chemical use
In the past, the use of linear economy is a form of disguised encourage for inefficient use of chemicals, suppliers sell chemicals as much as possible to obtain the maximum benefit, and even go with a volume discount for customers to over-purchase, yet deriving storage risk caused by hoarding. Suppliers are over-produced in order to use them during the effective use of chemicals, resulting in more waste, or in the process of using chemicals, in order to pursue better production efficiency, unexpired chemicals are replaced in advance, indirectly causing the waste of chemicals
In order to solve the above issues, experts put forward the business model of “Chemical Leasing (ChL)”, which decouples users from the right to use and ownership of chemicals.
This means customers’ right to own the chemical switches to the right to merely use the chemicals. The ownership of the chemical still belongs to the supplier which will be responsible for the safety of transportation, storage, management, use and operation during the application, and the processing problems after disposal. Through chemical leasing, users do not need to purchase chemicals, they only need to pay for the services provided by the chemicals. For example: the expense of wastewater volume treated, painting area, pipe cleaning, etc.
In this business model, suppliers value the chemicals service provided to make profits, use the least chemicals to meet the chemical services required by customers, so as to earn more profits, achieve the common goal of both suppliers and customers who wish to reduce the use of chemicals.
Chemical management services open new business opportunities in the industry
Chemical suppliers replace the traditional sale and use of chemicals by providing services, which include the transportation, storage, management, efficacy and safety of use and operation for chemicals, and the processed issues after disposal, called “Chemical Management Services” This service is a long-term partnership for the supply and management of chemicals and related services. The service provider is responsible for the proper application of the chemical in customer’s production process and directly derives the profit from the reduced cost.
Chemical management services can effectively reduce occupational health and safety risks, respond more flexibly to changes in international chemical policy, and enhance opportunities for customers to enter new markets. Unlike the outsourcing model, chemical management services involve the transfer of chemical knowledge from supplier to user, in long-term cooperative partnerships, to guide and transfer innovative, harmless environmental technologies, and find a better equilibrium point between use and profit.