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Circular economy for better tomorrow

“Take-make-waste” approach of using and processing our resources is paving the way to destroying our health and environment. Resource extraction has more than tripled since 1970s. In 2019, global use of materials has surpassed 100 billion tonnes, from which over 90% are being wasted (Circle Economy 2022). The extraction and processing of materials, fuels and food contribute half of the total global greenhouse gas emissions and over 90% of biodiversity loss and water stress (IRP 2019, UNEP 2022).

If we continue business as usual, we will eventually reach planetary boundaries (IRP 2019). It is predicted that the global material use could almost double by 2060 (IRP 2019, Circle Economy 2022). Although some measures to prevent this scenario are well on the way, the solution is not simply to upgrade the renewable energy and material use efficiency, but to combine these efforts with the circular approaches. In contrast to the linear economy, which uses natural resources for products that end up as waste, circular economy strives to create a closed-loop system with reuse, sharing, repair, remanufacturing, recovering, and recycling. In circular system, waste materials and energy become resources, either for the processes in industry or as natural resources (i.e., organic fertilisers, source of high-value compounds). In either case, waste, pollution, and carbon emissions are significantly reduced.

Figure 1: Circular economy practices (UNIDO).

From linear to circular

Circular approach has the potential to alleviate environmental degradation and explore sustainable growth (European SDG roundtable 2022). It offers an alternative to linear economy that can yield up to $4.5 trillion in economic growth and create 6 million new jobs through activities like recycling, repair, and remanufacturing (World Economic Forum 2022, UNEP circularity platform). But to establish circular economy, we must transform every element of our “take-make-waste” system: how we manage resources, how we make and use products, and what we do with the materials afterwards (Ellen MacArthur Foundation 2019).

Figure 2: Circularity builds upon value retention loops (UNEP circularity approach).

The transition from linear economy is complex as numerous obstacles still limit the adoption of circular models. This is the reason why today only 8.6% of the world is circular (World Economic Forum 2022) despite numerous strategies and initiatives, like European Commission’s Circular Economy Action Plan, the European Green Deal, and UN Sustainable Development Goals (UN 2015). Changes need to happen along the whole value and supply chain, and many companies have already learned that collaboration in the value chain, even between competitors, is essential (European SDG roundtable 2022).

Circularity requires cooperation throughout the value chain

Sustainable, diverse, and resilient value chains are a prerequisite for sustainable rural growth, food security and the sustainable use of natural resources (European Commission 2022). Food and other bio-based products supply chains operate in an increasingly complex and dynamic environment characterised by new consumer demands, new and sometimes game-changing technologies, changing structures and cooperation modes (European Commission 2022). Circularity thus requires creativity and cooperation among all value chain actors, including behavioural change and innovative solutions as well as inclusion of all stakeholders (businesses, governments, research institutions, finance sector, civil society, individuals), ensuring nobody is left behind (IRP 2019).

Circular approach is advantageous for all stakeholders

Many companies have already demonstrated profit opportunities identified along the value chain and advantage over competition through the eco-innovation activities (UNEP 2022). The potential of small and medium sized enterprises (SMEs) to bring about system-wide change is particularly high as they account up for 90% of businesses and contribute two thirds of formal employment in the developing and emerging economies (UNEP 2022). In comparison to larger industries, their small size makes them more agile and flexible for changes although their transition can be challenging due to other reasons, such as high costs of implementing viable circular opportunities as well as limited knowledge and work force to tackle the complex procedures.

At the government level, effective combinations of policies can contribute to the alleviation of resource constraints and environmental degradation, improvement of social welfare and local community engagement, job creation and attracting financial resources (UNEP 2022). In Germany, a combination of regulatory framework and economic incentives has spurred investment and innovations which enabled the emergence of new markets for eco-innovative solutions (UNEP 2022).

Circular economy is very compelling at all levels because it reduces resource dependency and resource use, including energy, thereby reining in production costs, narrowing market exposure, and limiting costs stemming from the resource extraction and generation (UNIDO 2017).

Anteja work on circular economy

Anteja has over 15 years of experience in the development of macro-regional policies, sustainable value chains, clustering, and industry networks, particularly in the areas of circular bio-economy. Together with our partners we work on initiatives promoting cross-regional cooperation and accelerate the transition to bio-economy.

EU Interreg GoDanubio: »Participative ecosystems to foster the revitalization of rural-urban cooperation through governing circular bioeconomy in the Danube regions and cities. «

Circular bioeconomy is used as a tool to foster regional development, making rural areas more attractive to youth. Multi-actor approach and co-creation of strategies are needed for the successful revival of these areas; thus, the project is developing an ecosystem for systematic multi-level governance with actors from the interested public, academia, industry and political decision making will be developed.

EU Interreg ARDIA-Net: »Developing an Alpine Space Research, Development and Innovation by lowering barriers for cross-regional cooperation.«

Ardia-Net aims to develop a multilevel, multinational, and coherent Alpine RDI Area for cross-regional and interdisciplinary cooperation and implement a joint funding framework and pilot projects, addressing circular bioeconomy and health economy megatrends. The improvement of the macroregional cooperation can significantly enhance the growth of new cross-sectoral value chains in the fields of circular bioeconomy and health economy, which are based on critical mass of actors and investments.

EU Interreg AlpLinkBioEco: »Linking bio-based industry value chains across the Alpine region.«

AlpLinkBioEco created a cross Alpine Space circular bio-based strategy, establishing awareness, assessing, selecting, and creating transnational/regional new value chains connecting all relevant actors, and demonstrating the implementation of successful business opportunities. Main results of the project are: (1) Value Chain Generator, a software that enables matching actors from different sectors and countries to create novel bio-based value chains; (2) Joint Masterplan on circular bio-based economy.

Value Chain Generator is a software solution for establishing the most suitable trade connections in value chains. It uses artificial intelligence and machine learning to connect actors from different sectors and countries into the novel bio-based value chains. The system identifies possible linkages between buyers and suppliers of a variety of products and by-products. By identifying such business opportunities, the system can help suppliers reduce waste and maximise their profits, making value chains more sustainable, efficient, and lucrative.

EUSALP Smart SMEs: »Opportunities for digitalization in natural fibres value chains.«

The aim of the Smart SMEs project explored to what extent SMEs that produce, process and apply natural fibres use digitalization tools and approaches. The project also evaluated the obstacles that prevent SME’s from exploiting the full potential of digital solutions. Anteja together with BIOPRO, organized the Policy Action Forum to bring together policy makers from different sectors (digitalization, rural development, and bioeconomy).

EU Interreg DanuBioValNet: »Multiple countries’ effort to enable the transition from a fossil-based to a bio-based economy in the Danube region.«

Anteja cooperated with expert groups from across the Danube region to articulate a Joint Bio-based Industry Cluster Policy Strategy to further promote bio-based value chains. The clusters and SMEs benefit from the innovative tools and methods developed for transnational cross-clustering. Three sector-specific value chains were established and serve as a model for future development of bio-based industry activities in the Danube region.

EUSALP Transalp: »Bringing the circular economy to farmers in the rural Alpine region for sustainable growth by establishing medicinal and aromatic plants value chains and supporting green infrastructure.«

The project brought the circular economy approach to farmers in rural Alpine region for more sustainable growth by establishing medicinal and aromatic plants value chains and supporting green infrastructure networks. The project resulted in a strategic overview on the topic in the Alpine Space, fully developed medicinal and aromatic plants’ value chain, and knowledge about green infrastructure networks performance in practice.

References and links

Circular economy business models for the manufacturing industry — Circular Economy Playbook for Finnish SMEs. SITRA, Technology Industries of Fineland & Accenture, 2018, Helsinki.

Circle Economy (2022): Circularity Gap Report 2022.

IRP (2019). Global Resources Outlook 2019: Natural Resources for the Future We Want. Oberle, B., Bringezu, S., Hatfield-Dodds, S., Hellweg, S., Schandl, H., Clement, J., and Cabernard, L., Che, N., Chen, D., Droz-Georget , H., Ekins, P., Fischer-Kowalski, M., Fl rke, M., Frank, S., Froemelt , A., Geschke, A., Haupt , M., Havlik, P., Hüfner, R., Lenzen, M., Lieber, M., Liu, B., Lu, Y., Lutter, S., Mehr , J., Miatto, A., Newth, D., Oberschelp , C., Obersteiner, M., Pfister, S., Piccoli, E., Schaldach, R., Schüngel, J., Sonderegger, T., Sudheshwar, A., Tanikawa, H., van der Voet, E., Walker, C., West, J., Wang, Z., Zhu, B. A Report of the International Resource Panel. United Nations Environment Programme. Nairobi, Kenya.

Ellen MacArthur Foundation (2019): Completing the Picture: How the Circular Economy Tackles Climate Change; www.ellenmacarthurfoundation.org/publications.

European Circular Economy Stakeholder Platform: https://circulareconomy.europa.eu/platform/, visited March 2022.

European Comission: Sustainable, circular and innovative value chains; https://ec.europa.eu/info/research-and-innovation/research-area/agriculture-forestry-and-rural-areas/sustainable-circular-and-innovative-value-chains_en, visited March 2022.

European SDG roundtable on Value Chain Collaboration to Enable the Circular Economy (2022): https://www.csreurope.org/circular-economy-in-the-value-chain, recording: https://youtu.be/SL2EB08Iyd8

UN Department of Economic and Social Affairs, Sustainable Development (2015): Sustainable Development Goals, https://sdgs.un.org/goals

UNEP (United Nations Environmental Programme) circularity platform; https://buildingcircularity.org, visited March 2022.

UNEP: Value chains, including Eco-innovation and circular economy; https://www.unep.org/explore-topics/resource-efficiency/what-we-do/responsible-industry/value-chains-including-eco, visited March 2022.

UNIDO (United Nations Industrial Development Organization) (2017): Circular Economy; https://www.unido.org/sites/default/files/2017-07/Circular_Economy_UNIDO_0.pdf

World Economic Forum, Circular Economy Initiative: Circular economy and Value Chains; https://www.weforum.org/communities/circular-economy-and-value-chains, visited March 2022.

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Maja Berden Zrimec

Maja Berden Zrimec

PhD in biology, content writer, senior researcher and project manager, algae expert