Thank you so much for that question. I'll attempt to answer your question by taking some real examples from a sectoral basis.
I'll take steel, for example. Steel is a highly recyclable material. We're very fortunate in Canada to have a very strong and advanced steel manufacturing sector. Steel is decarbonized by using scrap, so the recycling becomes part of a business opportunity and a market share opportunity going down that path. It's heavy. There are transportation considerations in acquiring steel scrap. There's likely going to be a global constraint on scrap availability as the world's steel production goes towards scrap metal usage. In some ways, that sector is contending with some countries that are putting in place export barriers to scrap, for example, from their waste streams.
Let's take plastics as an example. There are high energy costs to process plastics for recycling. I think there are technological barriers in terms of, for example, how to use plastics in a food context, where you must have certain standards for use in food packaging. The world is starting to solve that problem but is not quite there. It's about filtering the plastics that are good for that and filtering out those that are not, and then ensuring that there's the chemical process involved.
In Canada, is the plastics recycling stream sufficiently oriented towards feedstocks for any endeavour that would use recycled feedstocks to transform plastic into other manufactured products? That could have barriers, for example, on a province-to-province basis. Again, as I said in my opening remarks, the provinces tackle that in unique ways, and they have features they have built up within their systems.
There are means by which we could use, for example, by-products from the forestry sector as an input fuel, as an energy resource. Biochar is a good example of that. On the cost input to using biochar as a new energy resource that could go into a sector that needs high heat values to transform streel, for example, the cost of the input is not such that it's competitive with the alternative that might be currently used. Often, there's a cost price consideration; that dynamic means the market hasn't really picked up that signal yet.
Then, I would say, there's scale. Scale becomes a feature whereby unless the input sector has reached a sufficient scale—and therefore has a cost consideration as to how viable it would be as an input or a long supply chain as a consideration—the market failure means that the private sector, the market, is not necessarily readily picking that up on its own. Market failures are very important to recognize, and then we can figure out how to address them. That's sometimes why you see governments coming into play to incentivize, either through regulation changes or through funding mechanisms, to add a sweetener to businesses that are changing into a new business model.
Those are a few examples, but honestly, on a sector-by-sector basis, it's so particular.
