Circular Economy and Industrial Packaging Material Waste in EU: Case Study

Abstract

Current linear economy is based on take-make-use-dispose model which is damaging the environment with unsustainable resource use and generated waste. Sustainable alternative to current linear model is circular economy (CE), which integrates the economic activities and wellbeing with efficient resource use. The purpose of this thesis is to examine the impacts of CE to the consumption of industrial packaging material and waste management in international manufacturing industry. The study focuses primarily on environmental demands that EU is increasingly setting for multinational companies (MNCs) and how they impact on CE transition. Implementing circular business model within the organization may enable diverse benefits, e.g. potential to save considerable resources, gain competitive advantage and create value from economic, social and environmental perspective. Thus, the contribution of CE in gaining competitive advantage and creating value in global business context is observed in this study from resourcebased view (RBV). Furthermore, waste management is closely interconnected with CE and developing functioning waste management system is crucial for effective resource use, as well as packaging waste treatment. This thesis includes a qualitative case study, which examines the research topic by conducting interviews for external and internal stakeholders of a case company operating in global manufacturing industry. The research investigated the background of the demands for packaging material in EU, as well as identified the possibilities and challenges in terms of packaging material.It also mapped the current state of industrial packaging material waste treatment, monitoring and reporting. Current EU legislation and demands are not forcing companies to shift towards CE but are currently making the unsustainable actions and operations continuously more expensive and difficult. Reporting the inbound and outbound packaging material is mandatory for multinational companies in EU and currently very challenging. More reliable reporting would require extensive improvement in system data, requirements for suppliers about the packaging material, as well as more standardized packaging for products. CE can enable various possibilities for companies by turning the inefficiencies of linear economy model into business value. However, various factors are hindering the transition towards circular model, such as legislation, complex global supply chains, challenging packaging materials, as well as missing system for circulating material. In order to overcome these challenges, comprehensive cooperation within the organization and throughout the global value chains is mandatory. Certain requirements for stakeholders are necessary for developing more circular processes and ensure that supply chain partners are willing to operate in more sustainable way. Furthermore, there is an urgent need for developing waste treatment methods and new systems for circulating packaging. The waste should be seen as a resource but current challenges in recycling and reusing the materials are decelerating companies to do any actual actions.