How Blockchain Technology can revolutionise recycling
Over one-third of the 2 billion tonnes of solid waste generated annually is not managed in an environmentally safe manner. The World Bank predicts that this figure will increase to 3.4 billion tonnes by 2050. Blockchain technology (BCT) provides an innovative means to stimulate participation and collaboration in the currently fragmented recycling industry.
The linear and fragmented traditional recycling chains have hindered progress towards a Circular Economy. The lack of transparency in waste tracking has fostered lucrative opportunities in illegal waste trade for businesses that operate outside of regulatory systems.
Historically, there has been little to no incentive for members of the recycling chain to track waste flow and cooperate to increase recycling performance. In developed countries, much of the solid waste is exported to be processed in developing countries. In developing countries, the recovery and processing of solid waste is driven by street pickers and informal recycling merchants.
We must establish a system to track waste flows and create incentives to foster collaboration between recycling chain members.
Blockchain first appeared as a cryptocurrency and has quickly grown as a disruptive digital technology with many use cases. Unlike traditional software, in which data is stored on a centralised server, blockchains are built around decentralised ledgers in which records of transactions are stored and verified on many nodes. This ensures security and trust, as past transactions on the ledger are visible and irreversible.
Some recycling companies have already taken advantage of BCT with self-executing smart contracts in their operations.
After analysing the performance of six businesses that have integrated BCT-based recycling practices, researchers concluded that “…the traditional recycling industry can be driven by innovative technologies, which can significantly improve recycling chain performance.” These businesses have shown that BCT can effectively stimulate participation, social inclusion, and transparency in recycling chains, as well as extend producer responsibility and accountability.
PlasticBank, Empower, and Kabidiwalla Connect use BCT-based platforms that enable collectors to earn digital currency (tokens) for their work. In developing countries, where many people are unbanked, the seamless tracking and tokenisation of plastic collection stimulates participation, making collection a viable, revenue-generative activity for the world’s underprivileged populations and ends the all too common exploitation by waste merchants of these workers. Collectors can cash tokens for local currency or use them to purchase goods and services from participating local businesses. The benefits here are twofold when compared to informal recycling chains: (i) tokens stimulate the social and financial inclusion of some of the most vulnerable people, and (ii) motivate collectors to provide tracking data allowing for better waste flow tracking and recycling chain integration.
Transparent and trusted recording of resource use along the value chain is a vital element in the transition to a closed-loop circular economy. The immutability of BCT can guarantee the credibility of recycling information and the lifecycle impacts of products post-consumer. RecycleGO utilises BCT and Big Data to optimise waste collection routes and allows stakeholders to monitor recycling flows better. Transparent recycling chains allow producers to track the lifecycle of products from cradle to cradle, leading to extended producer responsibility, better sustainability reporting, and compliance with environmental protection policies. Tracking recycled plastic from collection to reuse, like PlasticBank, Empower, and Kabidiwalla Connect do, allows not only collaboration but also quality assurance for manufacturers that are reusing recycled plastic.
Traditional recycling chains are fragmented, which fosters evasion of recycling responsibility. Transparent inter-industry data sharing between suppliers, manufacturers, and recyclers can lead to entrepreneurial opportunities for recyclers and reusers. The efficiency of informal recyclers in developing countries is typically inferior because they focus on processing what can be resold for profit. Empower, PlasticBank, and Kabidiwalla Connect provide an e-commerce platform to connect collectors and recyclers with international buyers looking to reprocess recycled plastic. Agora Tech Lab uses BCT to help cities create participatory and more efficient waste management systems by rewarding residents for separating their waste, reducing the city’s sorting costs. Residents receive digital tokens, which can be exchanged for services the city offers (such as free public transport or tax reduction).
BCT is still in its fledgling stage. As with any new technology, early adoption is slow. There is no denying that there are still barriers to overcome if BCT is to mature, leave its nest, and revolutionise other industries. People believe that BCT is still premature, complex, and has unclear risks and upsides. Some businesses are waiting for the results of pioneers’ deployment before deciding whether they’ll integrate BCT into their operation. Another barrier is BCT is often hard to integrate into businesses’ current systems and often requires external technical experts to implement and maintain this integration at an additional cost.
However, once these barriers are overcome, BCT can eliminate the need for intermediaries and streamline recycling reporting. BCT has the opportunity to revolutionise the recycling industry by stimulating recycling participation, forming a recycling chain network with reliable lifecycle reporting, which can enable circular business models.
