Circular manufacturing is a proven method of industrial production and a key solution to the climate crisis. It involves sustainable low carbon sourcing, reusing, remanufacturing and the recycling of raw materials and products to extend their life cycles and reduce overall waste.
Driven by a net zero framework and green energy sources circular manufacturing, where it is physically possible, will become a standard approach across industry as increasingly strict regulation forces companies to account for the environmental impact of their entire value chain.
Muirhead, part of the Scottish Leather Group, began its journey to net zero circular manufacturing over 20 years ago and is recognised as a global pioneer of the process. A maker of high performance leather for the aviation and passenger transport industries, the company founded 180 years ago now exports products to over 60 countries.
“Circular manufacturing begins at the design stage to reduce energy and resource input, maximise production efficiency and reduce footprint throughout your entire operation,” explains Dr Warren Bowden, head of sustainability and innovation at Scottish Leather Group and Muirhead.
“The process adds value and creates revenue opportunities by allowing products and materials to remain circling within the system for as long as possible. It drives the whole agenda of reducing overall environmental impact, use of resources and waste.”
Circular manufacturing and sustainability
As a by-product of the food industry leather is the original upcycled material, says Bowden whose company began its net zero journey two decades ago. “In the early 2000s we set ourselves ambitious targets to reduce our emissions and looked hard at our entire operation to find a sustainable future path. We looked at materials sourcing, production, water and energy use and waste and developed the beginnings of a low carbon circular manufacturing process. It has changed in stages over the years but the driving philosophy was simple; the journey to zero is significant and it’s a circle. The sole aim has been to reduce the footprint of our product. We have a target of zero scope one and two by 2025 and we’re about 93 per cent along the way to achieving it.”
Muirhead has developed a unique circular manufacturing process that involves local sourcing, energy reclamation from waste and water recycling. “We have a thermal energy plant, a water ultrafiltration facility and a scheme that enables us to re-purpose end-of-life leather as fuel,” Bowden says. “We’re on a journey to zero carbon impact and zero waste to landfill with responsible sourcing and sustainable tanning under Goal 15 of the UN Global Compact: Life on land.”
The company is signed-up to the UNGC, measures progress against UN Sustainable Development Goals and is committed to the Science Based Targets initiative with reporting independently verified through an ISO-accredited Life Cycle Analysis (LCA). The LCA accounts for their carbon footprint and quantifies the GWP100 and other impacts of all company activities including the influence of upstream farming.
Muirhead’s circular manufacturing process incorporates energy recovery, water re-use, renewable energy, locally sourced and traceable rawhides and a scheme for end-of-life leather that is used to power manufacture of new products. The process has shown clear results, Bowden says. “Since 2003 we have reduced the carbon intensity of our leather per hide from 10.9kg CO2e to 1.3kg CO2e which is the lowest in the world.”
Sustainable materials sourcing
The company’s rawhides are sourced from one of the highest-rated territories in the Animal Protection Index. “We procure 80 per cent of Scotland’s total available rawhides that meet our quality standards,” Bowden says. “We produce over 98 per cent of our rawhides locally and we can track and trace every one from farm of origin to end product via blockchain, the Cattle Passport and international standards bodies. We work with suppliers who employ regenerative farming practices which ensure health and vitality of farm soil, our animals and our finished leather.”
The on-site thermal energy plant converts waste into heat used to power the company’s tanneries. “In normal use we reclaim enough energy to heat 5,000 households,” Bowden proudly declares. “Reclassifying our process waste as a resource is a step-change for the leather industry. Any additional energy we buy is 100 per cent derived from certified carbon neutral wind sources (100 per cent REGO) and we’ve been doing it since 2017. One of our plants generates more energy than we consume and we export it, generating revenue from our own by-products and waste materials.”
Clean water is sourced from the company’s own local loch and manufacturing uses 50 per cent less water per hide than the industry standard. “Our ultrafiltration plant enables us to recycle 40 per cent of our treated water back into use within production. The result is zero impact on water scarcity and there’s actually more water leaving the site than we consume.”
Raw materials like collagen are reclaimed for other industries providing the starting point for their own manufacturing processes, Bowden says. “From the food industry to beauty products and construction materials our fully traceable supply chain enables our co-products to be certified food grade.”
An average rawhide weighs 40kg and Muirhead’s finished leather averages just 4.5kg but it makes use of every part of the remaining 35.5kg. “This is how we reach zero waste, zero carbon and zero impact on water scarcity,” Explains Bowden. “We’ve reduced the amount of waste sent to landfill by 81 per cent and expansion of our thermal energy plant will help achieve our goal of zero process waste.
“Our take-back scheme for end-of-life leather circularises the whole supply chain. Leather produced this way has only ten per cent of the carbon intensity of linear manufacturing. Energy embedded in the leather is reclaimed and re-purposed, never lost.”
Life cycle analysis
Lifecycle analysis allows the company to accurately measure scope 1, 2 and 3 including the upstream; the livestock elements and the chemistry elements. “Ninety-nine per cent of what we do is scope three. We use an ISO-accredited Life Cycle Analysis (LCA) to account for our carbon footprint. The LCA quantifies the GWP100 (and other) impacts of all our direct activities, including the influence of upstream farming. We use lifecycle analysis because it’s clear and credible. It’s complex to start but once you’ve got it, it’s very transferable and you can use it on a sector by sector or product by product basis. It provides genuine transparency of what is included and what isn’t.”
Scope 3 challenges and benefits
While Muirhead continues to develop its circular manufacturing process future progress is being hampered by a lack of clarity in current regulation. Definitions involved in Scope 3 should be standardised to provide industry with clarity and credibility, Bowden believes. “Scope 3 is a nightmare because definitions are different depending on which platform you report against. The SCCR is different from the SPT, then there’s the Task Force on climate related financial disclosures, a variety of EU sustainability directives, the green code and now America’s SEC is issuing its own version. If someone could please clearly define what is actually included in scope three it would make everybody’s life easier.”
Despite such challenges Bowden is convinced that Muirhead’s net zero journey has more than repaid all the time, resources, learning curves and costs involved. “It’s been a massive expenditure and will continue to cost money because it is embedded into the way we operate but the many benefits are clear to see. The steps we’ve taken to sustainability have a positive impact on our entire value chain and help our clients pursue their own low carbon targets. There’s great interest in what we do because it feeds into how our customers report their scope three and they find it highly beneficial to procure from a low carbon supplier.
“It’s had a huge impact, especially with the clear language we use to explain our data, as our customers and suppliers need to work out their own footprints. By adopting proven solutions such as circular manufacturing we’ll see more of industry doing it right and doing it better with less environmental impact.”
One sure benefit of a wider circular economy is cost savings for manufacturers and society. The Ellen-MacArthur report estimates an annual material cost saving opportunity of up to $380 billion at an EU level for a ‘transition scenario’ alone with the worldwide circular economy forecast to be worth $4.5 trillion in the next 15 years. According to the EU’s Circular Economy Action Plan, a 30 per cent increase in resource productivity could lead to the creation of two million new jobs by 2030.