The World Circular Economy Forum 2017 will bring together a large number of world economy reformers. The world is in serious need of...
The circular economy is a novel economic model in which the focus is on reusing materials and value, and on creating added value in products through services and smart solutions.
According to a Sitra survey, a circular economy represents an opportunity for Finland worth 1.5 to 2.5 billion euros.
Climate change and the depletion of natural resources are two of our most pressing global problems. We are living beyond our means. Waste can be reduced through a transition towards a circular economy. In such an economic system, material wastage and generation of waste are minimised. In a circular economy, the use of resources and materials will be enhanced, with raw materials retaining their value in the life cycle of resources. In practical terms, this may mean that a product must be designed so that its materials are separable and recyclable.
Tackling climate change and the preservation of natural resources has given rise to a global business area with a very fast growth rate. According to a survey conducted by Sitra, a circular economy represents an opportunity for Finland worth 1.5 to 2.5 billion euros. Despite its small size, Finland is in a good position to thrive in the face of global competition: factors such as a high education level, solid technological expertise and a strong reputation as a cleantech operator are fundamental to its success.
In a circular economy, the most important value potential does not lie in material flows or waste. Far more valuable than these are practices such as maintenance, reuse and remanufacturing of equipment. The starting point should be the optimisation of value circulation, not the prevention of waste generation; in other words, we should strive for a maximisation of the volume of waste put to reuse in the form of raw materials or as an energy source.
Finland has already come a long way towards putting in place circular economy practices in many sectors of the country’s economy. Some examples include: energy efficiency in the paper industry, bottle recycling, flea markets and efforts made by forest harvester manufacturer Ponsse in the development of product modularity.
However, much remains to be done: only 54 per cent of all waste in Finland is recycled or reused in any way, and, similarly, few innovative service concepts concerning the maintenance, reuse or remanufacturing of equipment have emerged. However, successful examples are available around the world that can be borrowed and localised, such as Interface, one of the largest carpet tile manufacturers in the world, which leases carpets to companies. After having passed their service life, the carpets are returned to the factory to be used there as material for new carpets. Similar business models have been created by aviation engine manufacturer Rolls-Royce, elevator manufacturer Kone and engineering firm Kamppi which, instead of selling machinery, brings both the machinery and their trained operators to the worksite.
So what should Finland do? The main elements of Sitra’s operations include an ambitious vision and extensive co-operation, the other key players of which comprise businesses, municipalities and cities, households and public administration. When the goal is to enact an extensive systemic change, everyone needs to contribute. Information, operating models, removing administrative obstacles, business expertise, practical trials and piloting, and networks are of course required, as is the capacity to take responsibility, think innovatively, work with others and enthusiasm. Sitra contributes to a circular economy in Finland by developing the road map in collaboration with other players, devising business models for companies with an application in the circular economy and experimenting with operational models within administration with the intention of bringing in aspects that would motivate a transition to a circular economy.