Circularise: prove your sustainability practices

Our economy is 'linear' meaning that raw materials are used to make a product, and after its use any waste is thrown away. If we keep living this way, future generations will live in a world defined by natural disasters, famine, and poverty. We at Circularise believe that by moving towards the circular economy these outcomes can be prevented. However, in order for that to happen we need cooperation between manufacturers, retailers, suppliers, recyclers and other parties involved. That's the reason why we are developing a blockchain‑based communication protocol to promote value chain transparency without public disclosure of datasets or supply chain partners (first in textile & plastics, later in electronics). This system will allow these parties to increase trust in each other, increase transparency and allow them to communicate data that wasn't accessible before, leading to an uptake of recycling, reusing and repurposing practices on a massive scale.

The textile industry is one of the most pollutants releasing industries of the world. Surveys show that nearly 5% of all landfill space is consumed by textile waste. United Nations Climate Change News states that the fashion industry contributes 10% of global greenhouse gas emissions and 20% of global waste water due to its long supply chains and energy intensive production. While, up to 95% of the textiles that are land filled each year could be recycled, the textile industry is still defined by slow transition to the circular economy practices. In particular, manufacturers are reluctant to produce and use more secondary (recycled) materials due to the higher costs associated with auditing and certifications. These certificates provide auditable proof of origin and/or production and working conditions, however they are extremely costly or sometimes even impossible to obtain due to intransparent supply chains and the necessity to audit all actors. In turn, high prices of certified recycled materials leave manufacturers with significantly lower number of orders from textile retailers, hindering the shift towards a Circular Economy.

The customer of this system is a wholesale, business-to-business (B2B), recycled fabric (later on also plastic) supplier for end-users, retailers and wholesalers. This project opens the currently very small market of intermediary stakeholders in sustainable textiles to new companies, as it removes the necessity of a centralized and selective certification. This leads to the opportunity to sell products with recycled materials at a market price equal (or at least competitive) to virgin material products and thereby allows mass production of recycled materials and the development of a new standard to use recycled content not only in niche products but in the general collections of all major brands. In turn, this provides access to clothing made from recycled materials to the general public.

Circularise is providing an innovative, fast and cheap technology, which allows to prove the origin of the recycled material without the necessity to certify every stakeholder along the supply chain.

Our solution implements existing certificates that are widely accepted in the industry (GRS), a chemical tracer (developed by our partner) than can be checked at any point in the supply chain, and a blockchain technology serving as a backbone of this system. The inviolability of blockchain gives the traceability chain a very convincing value, but in combination, the technologies stated above provide OEMs with an absolute proof of the origin of the material.This is unique as there are no technical solutions besides Circularise which allow tracking material with interruptions in the supply chain, while auditing and certifying two instead of 5-10 parties. This avoids the 15% additional costs for certification and makes sustainable material available for mass production. The solution tackles plastic-based and cotton-based materials alike and covers more than 95% material types. With our technology, retailers can decrease the environmental impact of their products while receiving auditable proof of the recycled content. As a result, producers of recycled material are able to sell more of their material to suppliers of said big retailers.

Circularise solution is innovative because of the combination of blockchain and tracer technologies, which - unlike through our competitors - allows the direct validatable proof on the basis of a single piece of clothing. This means, that Circularise provides a unique solution that allows a piece of clothing to be traced back without auditing the entire supply chain and be scanned on a product-basis to determine the recycling content through the tracer technology. This leads to enormous economic benefits, because it decreases the time and costs of the certification process. Additionally it opens the currently very small market of intermediary stakeholders in sustainable textiles to new companies, as it removes the necessity of a centralized and selective certification. This leads to the opportunity to sell products with recycled materials at a market price equal (or at least competitive) to virgin material products and thereby allows mass production of recycled materials and the development of a new standard to use recycled content not only in niche products but in the general collections of all major brands, a paradigm shift.

The blockchain based communication protocol with post-validation functionality. The protocol allows for the communication of material information without knowing all stakeholders along the supply chain and without requiring cooperation or even the knowledge about stakeholders identities. The information shared can be verified and audited while keeping the actual data secret.

Tracer Technology. Tracer technology is being deployed to provide additional proof of origin of the recycled material on a piece-by-piece basis. The Tailor-Safe product and brand protection system relies on the use of inorganic luminescent pigments (security pigments) to authentic products. These security pigments consist of tiny crystals that are integrated into the product material itself and become an indissoluble part of the product. The security pigments present individual line spectrums when analysed with light spectroscopy, resembling human fingerprints. What is special about these pigments is that they emit different line spectrums when stimulated at specific discrete wavelengths. This makes them absolutely unique.

In the last six months the solution that we are developing has been presented to Inditex, Bestseller, H&M, Hilfiger, and Aditya Birla Group. The demonstrations at the customers premises validated the technology and confirmed its applicability in the operative environment as well as its usability in the textile sector specifically. The continuous talks with said brand owners indicate that the first cooperation with the scaled technology can potentially cover their entire segment of sustainable accessories and underwear and will consecutively be extended to other segments just after the end of the large scale pilots.

At this point of time, we are also working with the Summit Company to launch this solution with its customers. (The Summit Company is an ecosystem of companies working together, making the highest standards of fast fashion sustainability and eco-authenticity accessible and simple to obtain.) 

The market has 20+ potential large customers solely on the retail side, with one of the biggest players already showing its commitment to use CirSource for a number of orders. Based on the existing projections, in 2019-2020 CirSource will be used to process approximately 1000 tonnes of sustainable apparel. The customers waiting for the blockchain-based Circularise technology and a better integration with the chemical tracers cover 25% of the textiles world market. Looking at the predictions on the growth potential of sustainable fashion, the use of the CirSource technology will create a precedent case and allow 40% coverage of the sustainable fashion in Europe within 5 years.

Clothing, shoes and accessories manufacturers are increasingly confronted with customer’s claims for sustainable material and ethical working conditions.  Big companies like H&M, NIKE and others have put the first products with recycled content on the market. However the prices are incompatible with products made from virgin material, due to the high costs of certification and auditing of recycled material.

Our goal is mass market sustainability through new circular economy practices. In particular we want every person to have an opportunity not to choose between buying a cheap unsustainable garnet or a recycled but more expensive one. Everyone should have access to affordable clothing that doesn't have a negative impact on our environment. 

Technological barriers

1. Blockchain is a new technology where innovations are quickly following each other and the further development is not absolutely clear.  

2. The textile sector is known for its short production periods which can present a challenge to some stakeholders due to their inability to rapidly react to the market demands and the tight schedules in any interactions with the textile sector. 

Barriers in moving towards the circular economy

The world has streamlined its linear production systems for decades. These processes rely on virgin raw materials. Globally since the year 2000, the amount of clothing sold has doubled, and the number of times a garment is worn has decreased by 36%. From 1975, the global production of textile fibers has increased by a staggering 280%. This is a 4-fold increase. The raw materials, such as cotton, are becoming scarce or unsustainable to produce. This is why it is important to intensively develop technologies to utilize recycled materials. 

Technological barriers

1. The Circularise platform is designed to be blockchain-agnostic and it is therefore possible to switch blockchains whenever necessary. The currently selected Devv.io blockchain, for example, already outplays the most common Ethereum blockchain by 4 orders of magnitude in terms of speed and is in fact a lot less energy intensive.

2. After CirSource is scaled all transactions on the blockchain can be automated and unwanted delays will be mitigated.  Due to close cooperation with our customers throughout the pilot preparation and tests with the tracer technology, we could profit from the sector-specific expertise and adapt the system to the needs which we identified until now.

Barriers in moving towards the circular economy

However, technologies as such are not enough. Reorganization should happen at mental, structural, regulatory and economic levels. Our involvement in educational projects in the framework of Horizon2020 and EIT RawMaterial as well as local cooperation with public institutions addresses some of these issues already. The more rapid shift towards a circular economy in textiles, however, will come from the financial incentives provided by this project.

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Full-time staff: 6

Part-time staff: 1

Mesbah Sabur (Co-founder)

Mesbah got his MSc. in Industrial Design Engineering from Delft University of Technology. His primary focus for this project is on management, design and front-end development.

Jordi de Vos (Co-founder)

Active in the blockchain scene since 2014 he knows all the ins-and-outs of the market and he uses his knowledge to ensure that we do not end up in one of the common blockchain/crypto pitfalls. His primary focus in this project is on corporate development, customer acquisition and strategy.

Teresa Oberhauser (Project Lead) 

She gathered experience on the international level very early working at UNESCO headquarters in Paris, an international NGO in Brussels, the German Federal Ministry of Economic Development and the leading political think tank German Institute for International and Security Affairs Berlin. 

Igor Konstantinov (Growth Manager) 

Igor combines his degrees in industrial engineering and strategic management with seven years of experience in digital marketing and brand development, as well as outreach and stakeholder management at Europol’s European Cybercrime Centre. 

Brian Smits (Technical Account Manager)

With over 8 years of experience in finance, recruitment and sales, Brian is merging all this experience in his role of Technical Account Manager at Circularise. His primary focus is on sales and customer acquisition.

Sharvan Debi-Tewari (Developer)

Sharvan is a developer with expertise in cloud computing, mobile app development, web development, Python and React. Sharvan is working directly with Arvind and Mesbah on the advancement of Circularise solution.

Currently we are working with Milvum on the development of the underlying Circularise Core protocol. Milvum is a digital transformation agency focussing on 4 cornerstones: Optimizing processes, Employee empowerment, Transforming products and Customer experience. With regard to supply chain their experience touches employee empowerment as well as optimizing processes and transforming products. Several of their clients operate in a supply chain environment. Milvum's experience spans from developing digital solutions to improve and ease administration in logistics to exploring ways to lever blockchain in the supply chain industry to create trust and transparency. Milvum is a company with a strong technological focus. 

Arvind Jagesser, with a background in Computer Science, co-founded Milvum in 2012 and joined Circularise as CTO in 2017. He is an advocate of blockchain technologies, making use of them with his teams at Milvum. In 2017, they were awarded a prize in the Dutch Blockchain hackathon. Arvind uses his experience as a technical and project lead to ensure a smooth project and digital solution that meets all requirements.

Business Model

X - Confidential

The here described Circularise business model has been developed based on the sector specific payment norms. It consists of multiple parts found below:

• The minimum expenditure of EUR X a month 

The minimum expenditure for using the system is X a month, which is equal to 1 small shipping container filled with textile products (8000kg). Anything above this threshold is calculated based on the weight of the materials that go through the system and charged to a company on a monthly basis.

• The onboarding fee of EUR X

All Circularise products require a EUR X onboarding fee, in order to set up the service for the company and create the necessary links to the company’s software to allow automated interaction, hire more people for a specific project, conduct workshops with the clients, etc. 

• Pay per kilo EUR X/Kg 

Payment by weight system charges EUR X per kilogram of certified material. The cost of processing an order is the cost of a single transaction. This cost will go further down with the economies of scale. The customer is being charged directly, but experience has shown that the certification costs are fully paid by the user of the service, the retailer or brand owner. Despite the added fee for Circularise Source, as intermediary stakeholders don’t require costly auditing processes and registrations as official GRS partners anymore, the cost price for the retailer and thereby also the market price decreases.

At this point of time, we are working with the Summit Company to launch this solution with its customers. Aside from working with Summit Company Circularise will invest in acquiring more customers. This is currently being approached from different angles:

• Through trade shows and conferences in the textile sector. The following events are identified as necessary to promote our solution: Texworld Paris (France), Copenhagen International Fashion Fair (Denmark), The London Textile Fair (UK), Chibimart (Italy), Apparel Sourcing Paris (France), Interfiliere Paris (France), International Apparel & Textile Fair (UAE), Texworld USA, Intertextile Shanghai Apparel Fabrics (China). 

• In addition, several of the companies that we are formulating concrete cooperation requests within different sectors are specialised on recycled plastics. This cooperation enables Circularise to acquire customers not only in the field of textile but in the field of recycled plastic-based fabrics.

• On the other hand, we are already talking to companies in the furniture and automotive industries. Both industries require textiles and/or plastic-based fabrics and present a great opportunity for expansion.

We would really benefit from Solve's network of mentors, technical experts, potentially experts in the chosen field of textiles and of course media and conference exposure.

Additionally, we would like to utilize Solve's network of investors to raise money necessary for scaling. 

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Textile manufacturers

Textile recyclers

Retailers (Nike, TJX companies, Fast Retailing, etc.)

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The objectives of Circularise are to boost a resource-efficient circular economy by unlocking additional revenue for material recyclers due to validatable certification of their products. The project makes recycling more profitable for recyclers, manufacturers and retailers and aims at contributing to an increase in market-share of recycled materials. This project, however, is backed by Circularise employees. We are a real start-up, filled with a bunch of geeks who believe in sustainability and are willing to work towards this idea day and night even for a minimum salary (as it's been since the beginning). Winning this prize will allow us to hire more developers, get some space to breathe and finally do marketing to bring our solution in front of the eyes of the people and companies. 

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