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Photo: Topias Dean/Sitra

Published March 12, 2019

How are we progressing?

What kind of scores are we reaching in the game for a more sustainable well-being for Finland? In the following, we describe how advances made in the circular economy can be monitored.

The transition towards a circular economy is not limited to certain materials or sectors. It is a systemic change that affects the entire economy and involves all products and services. Therefore, monitoring progress towards a circular economy is a challenging task. To measure the circular economy, we can use the statistics available, but new initial data and new kind of statistical methods are also needed. Many circular economy phenomena take place within enterprises, outside the old systems and at interfaces or between individual citizens. Therefore, no data has been gathered on all sub-areas of the circular economy. The monitoring results can be used as a baseline when defining new priorities, with the help of which the long-term circular economy goals can be reached. The information received does help decision-makers, but, in addition to that, it should act as a driver for new actions.

The EU has been developing a monitoring framework on the circular economy, grouped into four phases of circularity: Production and consumption, Waste management, Secondary raw materials, and Competitiveness and innovation. As part of its 2018 Circular Economy Package, the Commission published a set of circular economy indicators, which extensively describe the transition towards a circular economy within the EU. The objective is that the indicators would mainly provide information on the developments taking place in the maintenance of the financial value of products, materials and resources and the generation of waste. The European Statistical Office Eurostat updates and publishes the indicators on a regular basis and continues to develop them in collaboration with other EU institutions and member states.

In connection with working on the updated road map to a circular economy, we have drawn up proposals for indicators based on the key indicators for green growth defined in the Finnish Government analysis, assessment and research activities project “Key indicators for green growth and material and resource efficiency” (in Finnish). They will also allow monitoring the progress of a circular economy from the perspective of strategic goals. The indicators will provide necessary information on national developments.

The share of national added value related to circular economy business

The development of the share of circular economy business is a comprehensive measure of the change in direction of the national economy. On the other hand, it is a challenging task to define such a share, since the circular economy should be considered a phenomenon that spans the whole of society in a more comprehensive manner instead of seeing it as a sector of its own. In addition to generating new business activities in accordance with circular economy principles, it is also essential that existing business operations are transformed in a circular direction. Therefore, it is not always possible to systematically differentiate between companies acting in accordance with the circular economy and other businesses.

Currently, the size of environmental business activities, exports and employment (indicator A16) can be monitored at the national level. The data collected based on the European Union Regulation on European environmental protection expenditure accounts concerns production that prevents degradation of the environment or protects natural resources. With the help of these indicators, it is possible to partly follow the development of circular business activities, but due to the extensive nature of the circular economy, it does not necessarily provide a comprehensive picture of the progress of a circular economy. Therefore, attention needs to be paid to how the measuring of business activities related to the circular economy could be developed.

Monitoring of patent applications related to the circular economy

The progress of a circular economy is essentially affected by the research, product development and innovation activities implemented by both companies and research institutes. One of the indicators to be monitored with respect to competitiveness and innovation named in the European Union’s Circular Economy Package 2015 is the number of patents related to recycling and recycled materials. The patent statistics allow us to estimate the R&D&I development within certain sectors, but in relation to comprehensive monitoring of the circular economy, this perspective has its challenges. Because of the cross-sectoral nature of the circular economy, R&D&I activities are also carried out in many sectors other than just those related to recycling and recycled materials.

At the national level, it is possible to monitor patent applications related to the environment, recycling and secondary materials as a share of the total number of patent applications (indicator A15) (in Finnish). This catalogues the development of R&D&I activities in the circular economy within the sectors concerned, but the R&D&I activities related to the circular economy in other sectors need to be examined as well. The Finnish Patent and Registration Office databases make it possible to identify the patents from certain sectors, which are also used for making EU-level comparisons.

Monitoring the resource productivity or the added value obtained through the expenditure of unit resource

It will be necessary for society to utilise renewable and, to a certain extent, non-renewable natural resources as well. In a circular economy, these resources are utilised as effectively as possible. At a national level, we need to be able to measure the efficiency of the use of resources to be able to examine the impacts of the circular economy on the actual consumption of natural resources and to put their use into proportion with the size of our national economy.

The European Union maintains statistics on resource productivity, or the added value obtained through the expenditure of unit resource, which is calculated by comparing the gross domestic product to national material consumption. There are challenges related to traditional ways of measuring resource productivity with respect to, for example, international comparability, but, in spite of this, it is an essential indicator for describing the value obtained from natural resources. The measuring of resource productivity could be better suited to measuring national development. Furthermore, it needs more advanced indicators by its side that take account of the use of renewable and critical natural resources and enable the monitoring of sector-specific development.

Total raw material consumption by material categories and the share of renewable raw materials of the total consumption

Raw materials consumption (RMC) is used for describing the overall consumption of natural resources, including not only their application to use but also their exports and imports in Raw Material Equivalents. The RMC can be divided into different materials, which enables their use for monitoring the ratio between and changes in the consumption of renewable and non-renewable raw materials.

With a view to the circular economy, it is essential that we increasingly shift from the use of non-renewable raw materials to the sustainable use of renewable raw materials and as efficient a circular economy of materials as possible. The RMC allows us to monitor the realisation of such development. The indicator also reveals the indirect use of materials – in other words, it takes account of the impacts of global and domestic consumption of natural resources. With respect to measuring the progress of a circular economy, the essential aspect is to monitor how raw materials are consumed at a national level and in what volumes.

The volumes and reuse of industrial, construction and municipal waste

The circular economy of materials plays a central role in the sustainable use of natural resources and implementation of a circular economy. We must get the volumes of waste generated as low as possible by means of efficient utilisation of raw materials. On the other hand, we also need to ensure that the side streams and the inevitably produced waste fractions are recycled and effectively steered to reuse. In this regard, it is possible to examine the volumes and reuse rates of industrial and construction waste as well as municipal waste as indicators of the implementation of a circular economy (indicators A5 and A6 link in Finnish).

Statistics Finland maintains national waste statistics which monitor the volumes of waste generated and treated, and changes in them. The statistics cover all waste categories and fractions targeted to the main sectors of the national economy and households. According to this, in 2016 about 47 per cent of waste, excluding mineral waste, was utilised as energy, and 41 per cent as material, with slightly under 11 per cent of waste ending up in landfills. From the perspective of the circular economy, special attention should be paid to increasing the share of the reuse of materials.

The share of renewable and low-carbon energy of final use

The circular economy should be based on the use of renewable and low-carbon energy. This is particularly important in Finland, because the energy sector causes most of Finland’s greenhouse gas emissions. Electricity production is already emission-free to a large extent, but our cold climate causes a major need for heating, and part of the need is still covered by fossil fuels. In addition to this, efforts should be made towards zero emissions in transport energy consumption as well. The development of the energy sector in a low-carbon direction can be monitored by measuring the share covered by renewable or low-carbon energy production of the final use of energy (indicator A3) (link in Finnish).

Monitoring the carbon footprint of the average Finn

A life that respects the earth’s natural limits will not happen without all of us pitching in. Therefore, it is important to encourage everyone to consider their own consumption habits and climate impacts. In 2010, the carbon footprint of the average Finn was approximately 11.5 tons of CO2 equivalent. Cutting this figure in half by 2030 is the goal proposed in the Government Report on Medium-term Climate Change Plan. In this regard, it is important to monitor how the carbon footprint of the average Finn is developing in the future. The circular economy offers solutions for reducing one’s personal carbon footprint.

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