Circular Economy

The Hon. J.E. HANSON (14:50): My question is to the Minister for Sustainability, Environment and Conservation and Climate Change. Minister, what is a circular economy and what are its benefits to South Australia?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (14:50): I thank the honourable member for his very important question, and I dismiss out of hand the interjection from the Hon. Mark Parnell, who, with some levity, is making wisecracks. I shall educate him, hopefully.

I am advised that a circular economy is a reference to the better use of materials within an economy, things like making use of better remanufacturing, repair and reprocessing of products. The concept of a circular economy is getting something of wider attention across the world, particularly in Europe and also, I understand, in the United Kingdom. It is also gaining traction, I am advised, across Asia.

The concept is not just confined to nations—companies are also embracing this new idea, and a good example of that is Schneider. Mr Gareth O'Reilly of Schneider spoke at CEDA's event on 26 May 2017, I am advised, about the circular economy and detailed Schneider's commitment to the concept—he is also the president of Pacific Operations—and told the audience how executive performances can be measured against sustainability, saying, 'Our drive towards energy innovation and sustainability has become our business.' This focus means that more than 78 per cent of the company's products sold in Australia are fully end-of-life recyclable, I am told. Their commitment extends to helping their supply chain improve on their sustainability.

Schneider is not alone: IBM, Unilever and 100 other global companies have embraced the concept of the circular economy. It is hardly surprising, when you look at the outcomes. It holds significant value for companies. According to the Ellen MacArthur Foundation, the value of material savings associated with the circular economy globally is estimated to be $US1 trillion. Honourable members would probably think that that is worth exploring—certainly those companies that I mentioned earlier do.

I am advised that Mr Rodin Genoff of Rodin Genoff & Associates also spoke at CEDA's event. Mr Genoff is, of course, a South Australian who is an expert in innovation and manufacturing. He was very clear about the potential for South Australia when it comes to the circular economy. He based this view on our leadership and innovation, particularly cluster projects, our achievements in the waste and resource recovery sector, our nation-leading and amongst world's best recycling rate of almost 80 per cent, and our many other achievements that help make us a clean and green state.

The benefits of a circular economy have been quantified. Thanks to work commissioned by Green Industries SA we now have a new independent report that outlines what a circular economy could mean for us. This report, The Potential Benefits of a Circular Economy in South Australia, was launched by the Premier last Friday. It finds that a circular economy could deliver an additional 25,000 jobs, approximately, by 2030, and was compared to 'business as usual'. The report also shows that we could cut 7.7 million tonnes of greenhouse gases by 2030, the equivalent of taking about 1.5 million cars off the road each and every year.

Formalising a future circular economy model for the state could help to bring about initiatives and activities designed to reduce waste, obviously, but improve material and energy efficiency and decrease greenhouse gas emissions. Further, the potential benefits of a circular economy align closely with our other state goals and economic priorities, such as the stimulation of employment, resilient local economies, particularly in regional South Australia, and development of a low-carbon economy.

Transitioning to a circular economy will not happen immediately but the report highlights a way that we can build prosperity whilst preserving our environment for future generations by embracing some of the key concepts related to circular economies. It provides a vision for how our state and our companies could create jobs and reduce those carbon emissions in a very innovative way that seems to be gaining traction, as I said, across Europe and the world.

This report represents a small first step in a much longer journey. I look forward to working with our communities and businesses to chart the course of a potential circular economy, starting out in a small way and finding willing partners in business who are already doing it and who could partner up with other businesses and show them what the bottom line benefits will be for their economies of scale in their business and also, of course, importantly, employing more South Australians as we transition to a sustainable economy into the future.