Ten seeds for a circular ecosystem


Tim Forslund

Specialist, Circular economy, Sitra


1. Summary

The COVID-19 recovery presents a once-in-a-lifetime opportunity to replace a brittle, wasteful and polluting economic system with something better. The circular economy presents a new paradigm in which the focus moves beyond merely reducing negative impacts to, by design, optimising the system as a whole.

Based on the criteria developed by the Finnish working group on sustainable recovery, this memorandum shines the light on the overlooked role of the circular economy in the COVID-19 recovery, through 10 leverage points. These combine early COVID-19 response measures from different countries with best practices from before 2020 and new ideas with a long-lasting impact.

The list is not a prescriptive policy recommendation intended to cover all parts of the circular economy, but rather a set of entry points. However, the main message is unambiguous: without the circular economy, it will be impossible to build back better and ensure our future prosperity.

  1. Ownership-free and service-based models. Incentives and more awareness of business models that enable new ways of meeting needs without having to own products, through as-a-service functions and sharing models – incorporating these as emission-reduction strategies.
  2. A more level playing field for longer-lasting products, including both requirements and financial support for circular design, repair, renting and reuse, further trials of VAT reductions, deposit-refund schemes for more product categories, and product-specific labelling for longer lifetimes.
  3. Circular public procurement, particularly prioritising functions over products with alternative ownership models, and risk investment funds to enhance the role of public procurement in stimulating new circular solutions, along with goals for circular procurement at all levels of government.
  4. Synthesis of existing circular economy learning content, reframed in the recovery context and leveraged by digitalisation to quickly scale up lifelong learning beyond higher education.
  5. More effective food systems, minimising the climate and biodiversity impact of land and oceans use by addressing both food loss and waste, applying regenerative agriculture, and supporting alternative sources of protein.
  6. Towards a carbon-neutral and circular industry, by consistently embedding circularity in fossil-free industry road maps (in particular around design and circular business models), funding industrial symbiosis projects at scale (e.g. replicating the Finnish Kemi-Tornio model), prioritising value chain collaboration and new renewable materials, not least in industry.
  7. A single point of entry to the authorities for firms operating with circular business models, following Denmark’s model, in order to reduce regulatory complexity for firms with circular solutions, in line with key areas featured in the EU Circular Economy Action Plan.
  8. Radically improved recycling systems, which see sources for renewable inputs (e.g. for textiles, electronics and bulky waste with more convenient collection) replicating operational garment-to-yarn recycling pilots and adopting the hierarchical Flanders model with reuse and repair centres, and labels for remanufactured products.
  9. Taking advantage of lessons learned from the pandemic, by maximising digitalisation, supporting digital meetings, allowing more flexible work hours, diversifying manufacturing and complementing ongoing building renovation efforts with circular elements, repurposing idle space, adding adaptable functions and introducing material passports.
  10. Emphasising connections, and finding synergies across firms, sectors and systems internationally, and contextualising the circular economy to different audiences, highlighting positive impacts on other systems (e.g. climate, biodiversity and health), and setting ambitious goals for absolute decoupling.

2. Introduction

Almost 50 years ago, Limits to Growth was published, a book in which experts brought attention to the imbalance between the economy and the carrying capacity of the earth. In the years since, the world economy has continued to grow, while our use of natural resources has more than tripled (IRP 2019a).

The year 2020 has exposed many of the failings and vulnerabilities of today’s economic system. Instead of patching up a flawed system, a fundamental rethink and redesign is needed. In a crisis situation, we must act quickly to minimise the damage. However, now is also the right time to rethink our economic system as a whole – how do we rebuild a world we want, where circular economy solutions are at the centre as part of an effort to create systemic change?

Around the world, substantial sums have been channelled to different recovery packages. Despite political commitments to build back better, more has been spent in support of fossil fuels than renewables (Simon 2020). The commitments also vary significantly. According to one estimate, the EU has thus far committed 20% of its stimulus spending to green measures, while the same figure for India, China and the US is only between 1-3% (Rhodium Group 2020). Smaller still is the presence of the circular economy in the recovery agenda, aside from efforts to renovate and retrofit buildings.

The circular economy could create new jobs, while helping to solve multiple crises tied to overshooting our planetary boundaries, as well as building more resilient economies. A circular economy would operate within the limits of the earth’s carrying capacity. Firms that apply circular business models appear to have fared better during the crisis – as have funds with holdings in such firms – and if effectiveness is the goal when building back better, then circular is the way forward (VITO 2020; Ellen MacArthur Foundation 2020a).

This memorandum looks at the overlooked role of the circular economy in the COVID-19 recovery. It brings together new ideas with early recovery responses from different countries, and best practices from before 2020.

We present 10 leverage points that can steer the recovery towards rebuilding a more effective economic system from an environmental, social and economic point of view. They are not policy recommendations addressed to a specific government but are designed to serve a source of inspiration and impetus for change broadly.

3. The need for a circular economy

Our economy today is characterised by haste, and waste. Only 8.6% of the input of natural resources last year was reused (Circle Economy 2020a). The extraction and processing of materials, fuels and food accounts for half of global GHG (greenhouse gas) emissions and over 90% of biodiversity loss and water stress (IRP 2019a). These processes also deplete the earth’s virgin natural resources and cause widespread pollution and health problems.

The circular economy rethinks these processes along with the consumption patterns that drive them. By minimising the material input, the focus is on getting more from less, and making us more resilient to shocks. More than that, it is a multi-trillion opportunity. As an example, it could help save China’s cities 11.2 trillion dollars by 2040 (Ellen MacArthur Foundation 2018a). It helps create new jobs and enables lower costs of access and more convenient ways of meeting people’s needs, as the role of ownership becomes less important. By seeking to optimise the system as a whole, it helps us stay within our planetary boundaries and reach many of the UN SDGs (sustainable development goals), not least climate goal (SDG 13, Climate action).

4. Why the recovery needs to be circular

The need to make the transition towards a circular economy was urgent well before the COVID-19 pandemic, and although much of the planet came to a standstill, the crises resulting from overshooting its boundaries still stand in front of us. Moreover, as the drawbacks of our brittle economic system were laid bare by the crisis, our economic system has come under intense scrutiny. This has helped prompt a rethink. Just 6% of UK respondents would like to go back to the pre-pandemic economy (Proctor 2020). In Finland, 69% hope that the pandemic leads to a permanent reduction in consumption and travel (Haavisto 2020).

There have been calls to let the circular economy play a central role in the COVID-19 recovery, ranging from ministers, leading NGOs, think tanks, platforms, decoupling advisory groups, other expert groups, city-level trailblazers and the European Commission (LeadIT 2020; Blériot 2020; IISD 2020; Haigh & Bäunker 2020; Decouplinig Advisory Group to Zero Waste Scotland 2020; Cole 2020; Hubbard 2020; European Commission 2020a). Much labour is needed to drive the shift to a circular economy, and its focus on getting more value from less resonates in the context of recessions and increased price sensitivity. More than that, it represents a more resilient economic model, a boon in avoiding volatility in general, and future supply chain disruptions in particular.

Research suggests that two thirds of firms that apply circular business models were not hindered by shortages during the corona crisis, while 98% of regular businesses experienced serious problems (VITO 2020). Circular solutions are largely digitally enabled, and as a report by the European Commission highlights, digital resilience is particularly important in crises (European Commission 2020b). If a circular reorientation represents the future of business, our priorities ought to reflect this.

Another reason why the global recovery needs to be circular is that the EU – the world’s largest economy and trading block – is already paving the way to a circular economy, in line with the European Green Deal – “our motor for the recovery”, in the words of Commission President von der Leyen (European Commission 2019a; @vonderleyen 2020). One of the deal’s key aspects, the Circular Economy Action Plan, highlights 700,000 new jobs by 2030 (European Commission 2020c). Besides these, one million jobs could be created by meeting the existing 2030 climate and energy targets. To meet these, 260 billion euros of additional annual investment are needed. Representing a crucial part of tackling ESG (Environmental, Social and Governance) issues, a large contribution could come from circular solutions – as could much of the 30% of the MFF and Next Generation EU earmarked for climate-related projects

While the rationale for a circular recovery is undisputable, concrete actions ensuring that this materialises are thus far insufficient. If we are to build back better, we need not only to quadruple our efforts, but to ensure that we use the right tools – especially those presented by the circular economy. We still have more chapters to write in the recovery, but time is scarce. By moving now, countries and firms can gain comparative advantages in the unstoppable long-term shift towards a circular future.

5. The circular ecosystem

The pandemic has been a tragedy on many levels, and there is considerable pressure for quick action to help us exit the crisis. Many rightly ask what we can do now. Shovel-ready measures play an important role in the quick response needed in the early stages of a crisis.

However, such actions are insufficient, and as time progresses, the focus should shift to measures that help us recover and later to reform our economic system.

This cannot be accomplished by one-off additions of new but detached components all at one end of the system. Beyond the immediate crisis, we must therefore look at the long term, at all parts and their connections. A well-functioning ecosystem adds more value than the sum of its parts, it is resilient to external shocks and it can regenerate itself.

Sitra and Finland have provided some insight into how it is possible to start redesigning the system, not least by developing the world’s first circular economy national road map. It starts from an ambitious vision – with a clearly communicated rationale – underpinned by a carefully thought-through process, in which the local context has been leveraged to its fullest, and through which a wide range of players are involved at the outset to co-create a set of steps to make the vision materialise. Policymakers need to pave the way with the right rules of the game, teachers provide the right tools, researchers provide the calibration, while other stakeholders provide the mortar that binds the building blocks together. Finally, someone is needed to help put the blocks in place, and recontextualise it in larger systems. To share the learning outcomes, Sitra is publishing a circular economy guidebook in September that can be used in countries devising their own circular economy road maps.

More resilient ecosystems are possible when diversity is embraced as a strength. This applies beyond the selection of stakeholders to the process. Explorative transdisciplinary research is needed to map patterns and establish the right foundations. These can make possible more applied research and innovation. Laboratory testing and pilots can then follow, and the specimens deemed most fit can be groomed, scaled and replicated farther afield. Efforts need to be directed not towards inundating one area, but rather towards funding and optimising the whole.

Learning is one of the first steps towards systemic change, and in the post-pandemic world this is all the more important as many people who have lost their jobs need new skills and tools for the future. When Finland began its work on the national road map, few would have believed that, two years later, it would have the highest number of circular economy programmes and courses in higher education in absolute numbers – not just per capita (Ellen MacArthur Foundation 2018b). More than that, engagement begins in kindergarten and continues through life. More than 70,000 Finns from across all educational levels studied the circular economy in the 2018/2019 school year.

Rather than seeing the circular economy as a separate sector, the emphasis has been on a set of tools and a way of thinking that are integrated into all areas of society. Thus, the courses range from chemistry to construction, and food chains and forestry, and an active effort to reach those that may otherwise not find and engage with this new concept. The approach went beyond the lecture halls, with Finland’s universities of applied sciences playing a key role, not least in their input into what the circular economy means beyond the drawing board, in practice.

Early on, a process of building a network for a circular economy was initiated, a journey characterised by broad involvement, co-creation and a shared sense of agency – less a requirement than an opportunity to achieve effective results, building on Finland’s solid experience in education. Sitra’s neutral and independent role was essential in terms of bringing different players on board behind an ambitious shared goal, ensuring effective training, maintaining the commitment of different experts, and piloting and following up the projects, and much of the content is available to Finland and beyond. Although one of many ecosystems, the vitality of this one has been instrumental in supporting neighbouring systems.

Next steps? Building on the initial success, the focus of circular economy education is now on continuous learning, on how to export the lessons of the circular economy to those in working life. Already, anyone in work who wants to study the circular economy will find these courses on offer from higher education institutes.

Another goal is to take Finnish teachings to the world. Under Sitra’s leadership, the Finnish school system moved to a circular economy. This article (Silvennoinen & Pajunen 2019) explains how this was done in practice, and how the same can be done elsewhere in the world.

6. Ten leverage points to strengthen the circular ecosystem

6.1 Ownership-free and service-based models

Rampant consumption of stuff is at the heart of the old economy, with needs equated to owning goods. This is problematic as our economies largely operate according to an extractive make, use and discard model. However, many needs can be met without owning products, and services are increasingly providing jobs and value to our economies, especially in developed economies. In fact, the role of services has become relatively more important than the trade in goods since 2005, and it has accounted for almost two thirds of the growth in Finnish exports in the 21st century, now accounting for a third of total exports (WTO 2019; PALTA 2020).

A particularly important service category from the circular economy perspective is product-service systems (PSS), which incentivise more durable products as the product ownership often stays with the firms, often through digital means. Such firms include Finland’s Lindström, which provides workwear and carpets as a service, and Welsh Riversimple, which offers light hydrogen-fuelled cars through a paying-by-the-mile service contract. Sharing models play an important role in increasing use rates, be it platforms such as Tori and Blox Car, or insurance solutions such as Omocom enabling the sharing of our assets. Unfortunately, sharing solutions are often not thought of as opportunities for GHG emission reduction and are thus not promoted as they would be if their total benefits were appreciated (Material Economics 2019).

These solutions are not yet well-known to financing institutions and require new banking models, legislative and financial support as well as supporting infrastructure, to be incentivised as established in the Circular Economy Action Plan. Wallonia’s circular economy strategy (2020) from July emphasised the importance of a “functionality economy”; the Swedish Climate Policy Council (2020) has highlighted the need to support the climate-effective services sector in the recovery; Iceland has factored in the role of car rentals (Government of Iceland 2020); while Finland has highlighted the export opportunity of services (Finnish Ministry of the Environment 2020). However, no comprehensive attempt to favour new ownership models has yet been made by any government. The recovery is an opportune moment to accelerate the shift towards tomorrow’s business models, by building awareness and a level playing field.

6.2 A more level playing field for longer-lasting products

To truly reinvent our economies, their material throughput and our consumption, we must look upstream, to the design phase. Rethinking ownership – moving from owning things to having access through services – is key to slowing and reducing the throughput in our economies, but efforts are also needed to ensure longer lifetimes. Different design strategies have different advantages, with design for durability usually at the top of the hierarchy (Bakker et al. 2014). The new EU Circular Economy Action Plan, published this March, presents a Sustainable Product Policy. This will be essential, as it sets out to widen the Ecodesign Directive beyond energy-related products to also deliver on circular design more broadly, allowing products to remain in use, not least with new consumer rights, including a “right to repair”. A first step will apply to consumer electronics and ICT products. France has even criminalised planned obsolescence in its consumer code (Légifrance 2020).

The potential for and momentum of repair is evident across Europe. Some 77% of Europeans want to repair their goods, but high costs constitute an important barrier (Flash Eurobarometer 388 2014). At least eight countries have introduced VAT reductions on repair services and sales of second-hand goods, and in the Netherlands, a set of actions for a repair economy is expected to improve their circularity metric from 24.5% today to 29% (Rreuse 2017; Circle Economy 2020b). Solutions that facilitate repair, reuse and exchange should be promoted, be it recycling malls like ReTuna, sharing platforms and websites, flea markets or Flanders’ pioneering hierarchical system of repair and reuse centres. Many such businesses were also impacted by the crisis, and catalysts are needed given their potential to offer new local jobs, as well as make more from less, as fewer can afford less in a recession.

EPR (extended producer responsibility) schemes can also be expanded. France has operated such a scheme for textiles since 2008 (Association of Cities and Regions for sustainable Resource management 2018). In line with EPR goals, Sweden’s circular economy strategy from July includes extending deposit-refund systems to smaller consumer electronics (Lindhqvist 2000; Government Offices of Sweden 2020a). In recovery packages specifically, France has introduced a scheme for bike repairs of up to 50 euros (BBC 2020). More products than just bikes could be considered. In Sweden a tax deduction has been proposed targeting both renting, second-hand purchases and repair services, including for IT equipment – a proposal brought up repeatedly in the recovery context (; e.g. the Swedish Climate Policy Council 2020 & the Restart Commission). Similar recommendations have been made for Finland, where deductions for repairs and resold products have also been piloted. More trials and studies of the desired effects are needed, especially in terms of extending these measures to as-a-service business models more broadly and combining the mentioned measures as part of a larger tapestry.

6.3 Circular public procurement

To reduce the flow of finite and often toxic materials into our economy, public procurement is key. In Finland, it accounts for almost one fifth of GDP (vero.fi 2019). Beyond avoiding detrimental purchases, it can actively drive the transition. As part of the Circular Economy Action Plan, there will be minimum mandatory criteria and targets for green public procurement in sectoral legislation, with life-cycle assessments integrated – however, still predominantly structured around the idea of purchasing products in mind (European Commission 2020c).

Ministers from eight countries, including Finland’s Mika Lintilä, have called for an accelerated low-carbon transition of industry through the recovery, highlighting the role of procurement policy to create demand for climate-neutral and circular products – albeit not services (LeadIT 2020). To support this, tenders that promote a circular economy could attract discounts, as in Denmark and the Netherlands. To encourage municipalities to procure and firms to scale up the circular solutions not yet widely used, Sitra has proposed introducing a risk funding instrument of 35 million euros annually over five years for innovative public procurement (Sitra 2019). This would enable initiating annual investments amounting to a total of approximately 100 million euros.

Helsinki’s circular economy road map,(City of Helsinki 2020), which includes procurement as one of four focus areas, highlights the importance of raising awareness around procurement, and it also lists an introduction of a shift from procuring goods to procuring services. At the national level, the Netherlands has set ambitious goals for all procurement from the national, provincial and municipal governments to be mostly circular for contracts from 2023 onwards, and by 2030 for all public tenders (Holland Circular Hotspot 2018). Finally, given the large disparities in know-how, capacity and practices in different countries, regions and municipalities, education and capacity building must play an important part in making procurement more effective.

6.4 Synthesis of existing circular economy learning content

Globally, the pandemic has caused record levels of unemployment, with many jobs unlikely to ever return. The role of retraining and reskilling must be emphasised, focusing on tomorrow’s jobs. Beyond higher education institutions, vocational institutions and workshop activities also play important roles (Gambrell et al. 2020). Similarly, in his budget speech, New Zealand’s Finance Minister highlighted the importance of funding adult and community education – a failure in the financial crisis (Government of United Kingdom 2020).

Some of this effort should be directed towards skills that were already needed before in the circular economy. If there is one thing this crisis has taught us, it is how to effectively use online video calls, and various MOOCs (Massive Open Online Courses) are now easily accessible. In the period 2018-2019, there were already at least 17 circular economy-specific MOOCs (Ellen MacArthur Foundation 2018b). These could easily be updated and redistributed with the recovery in mind. Among recovery measures, R&D and education show some the highest returns both financially and climate-wise (Oxford Smith School of Enterprise and the Environment 2020; CESifo 2020). Norway is allocating funding to the circular economy, 40% of which is intended for research purposes (Norwegian Government 2020). In May, Sitra launched a circular summer school project with Turku University of Applied Sciences, targeting Finnish companies in the built environment and the technology and process and engineering industries – a model that could be tweaked and replicated (Lehtinen 2020).

6.5 More effective food systems

One biological system alone, agriculture, accounts for a quarter of global GHG emissions (IPBES 2019). Without urgent action, by 2060, agricultural land could increase by 20% and pastures by 25% (IRP 2019b). A report by the World Economic Forum (WEF 2020a) from July highlights that food, land and ocean use affect 72% of (near-)threatened species. At the same time, 28% of the world’s acreage is used to produce food that is wasted or lost (FAO 2013). To avoid food loss and waste, France’s progress on tackling food waste should be studied and complemented by more measures to maintain the value of the food as food, before biogas, in line with the EU waste hierarchy, and preventing food loss upstream (Lemos 2019; European Commission 2020d). Finland is currently finalising its national road map to reduce food waste, in line with the Sustainable Development Agenda, which aims to halve food waste by 2030.

Although our extractive food systems are ripe for disruption, they have not been at the centre of the recovery. However, the WEF (2020a) report concludes that 191 million jobs and 3.6 trillion dollars of business opportunities could be created by 2030 through six nature-positive transitions that target regenerative agriculture; forest management; oceans; ecosystem maintenance and restoration; supply chains; and consumption – including shifting away from resource- and emission-intensive foods and fast fashion.

The alternative protein market alone could create 30 million jobs and account for 10% of the meat market in the next decade (WEF 2020b; Gretler & de Sousa 2020). The potential of extracting more value from commodities has already been shown by Vöner‘s kebab substitute, Oatly‘s dairy alternatives, pulled oats, Kasnäs‘s aquaculture system, Solar Foods‘ protein powder, Verso‘s meat-like products, and Beyond Meat, which saw its shares increase by 840% last year (Kontola 2020). The European Green Deal highlights the need for “new sources of protein that can relieve pressure on agricultural land” (European Commission 2019b) – animal-based food accounts for three quarters (IPBES 2019) of agricultural emissions – and the Food to Fork Strategy emphasises a shift to healthy sustainable diets, with the algae industry mentioned (European Commission 2020e). As part of its recovery, France intends to direct 100 million euros to the development of plant-based proteins. As the WEF (2020a) report highlights, the alternative protein market needs more R&D and regulatory support.

Regenerative agriculture also presents a major opportunity. It would reduce the need for costly and toxic inputs, be a boon for biodiversity and it could directly eliminate 34% of GHG emissions from the food sector in 2050 – in theory it could sequester all GHG emissions since the industrial revolution – and help create up to 200 million jobs in the sector by 2050 (Ellen MacArthur Foundation 2019; FAO 2012). The Food to Fork Strategy also promotes farming practices that sequester CO2 and restore soil health. As the recently published Finnish agricultural climate road map highlights, 75% of agricultural emissions come from the soil, and by regenerating it, as the road map sets out to do, an important stock can be regenerated, one which can generate more value (MTK 2020). Designing out waste, regenerative actions and getting more from less go hand in hand in this system.

6.6 Towards a carbon-neutral and circular industry

The climate targets cannot be met without a circular economy. Industry is a reminder of this. Focusing on steal, plastics, aluminium and cement, a more circular economy could cut emissions in heavy industry by 56% by 2050 (Material Economics 2018). Fortunately, a circular economy in manufacturing could yield annual net savings of 630 billion dollars from material costs in the EU (Ellen MacArthur Foundation 2012). The Danish circular economy strategy highlights that such costs can account for more than half of production costs (Danish Government 2018). The pandemic has also demonstrated the risks, not just of high costs, but also around sourcing.

Countries including the UK, Sweden and Finland have developed road maps for carbon-neutral industries These initiatives deserve to be replicated, but they could be even more effective if the circular economy was integrated throughout these road maps. The Finnish road maps mention increased use of recycled materials (e.g. steel, textiles and battery chemicals, and the chemical recycling of plastics), reuse of concrete, urban mining, biogas, product life-cycle extensions, and sharing and renting models. A stronger emphasis on circular design could complement these activities, as could circular business models. A better understanding of other sectors’ and players’ inputs, processes and outputs could also enable more effective and resilient industrial systems. This could prove a success factor in initiatives such as Finland’s €300 million-euro investment in a battery cluster (Finnish Government 2020). As part of Finland’s circular economy road map, a competence and training centre for industrial symbiosis was established in Kemi-Tornio, and one of the activities has been to introduce the site’s model to other eco-industrial parks .

More investment in such projects are needed to further support the development of industrial symbiosis, an area highlighted in Wallonia’s circular economy strategy (2020). Denmark has already allocated funding to circular economy business promotion projects within SMEs, focusing on value-chain collaborations and industrial symbiosis (Danish Executive Board for Business Development and Growth 2020). Industry’s role in the recovery and transition has also been recognised in Sweden’s budget in the form of metal recycling, and new recycled plastics and biorefineries (Government offices of Sweden 2020b). This has also been the case in the UK, where the government committed additional funding to encourage innovative material use in heavy industry, including 13 initial projects that focus on recyclable steel, reusing waste ash in the ceramics and glass industries, along with other solutions in the cement, chemicals and paper industries, as well as industrial symbiosis projects (Government of United Kingdom 2020).

6.7 A single point of entry to the authorities for firms operating with circular business models

Firms in the circular economy for the most part face different and more regulatory barriers than conventional counterparts. The element of novelty combined with the cross-cutting nature of many circular operations puts these firms at an unfair disadvantage. In Finland, environmental legislation is being reformed to allow those applying for permits to initiate and process several permits simultaneously, on a so-called one-stop-shop basis, on 1 September, in order to streamline and speed up the permit process, regardless of their line of business.

However, if carefully shaped, such legislation could – more than speeding up general business processes – support firms in the circular economy, not least those that support elements from the Circular Economy Action Plan, such as circular design, service models, return schemes or transparency through product passports. Denmark has already created such a one-stop shop, allowing firms with circular business models access to the authorities, allowing for less complexity and bureaucracy as well as a faster clarification procedure when assessing if the new solutions presented can be applied under current regulation (Danish Government 2018).

6.8 Radically improved recycling systems

Besides avoiding overconsumption, recycling could still be radically improved. Beyond avoiding waste, the dependence on overseas feedstocks could be much reduced. Many parts of the world may have seen impressive gains in recycling. In 2012, more of Finland’s municipal solid waste than the EU average was landfilled, but by 2018 this had shrunk by almost 98% (Eurostat 2020a). Although a success in itself, averting materials from landfills does not ensure that as much value as possible is retained in the system. Leakages to other countries has for example posed large challenges.

Flanders has been a front runner in preventing waste and maintaining the value of products, components and materials (Dalhammar et al. 2020). The collection of bulky household waste twice a year is mandatory, and municipalities collaborate with reuse and repair centres to separate that which can be remanufactured and recycled. In line with the waste hierarchy, the material stream must first pass through reuse centres before parts can be sold for recycling, and a label ensures the quality of manufactured products. The region has also made mandatory permanent collection points for waste electrical and electronic equipment (WEEE) for every 1,000 residents, as well as collection points for textiles near homes at least twice a year (OVAM 2017).

This is about more than avoiding waste. For local production systems to be resilient, the guaranteed presence of this input stream is crucial. For that, collection is a precondition. The recycling technology already exists. The Hong Kong Research Institute of Textiles and Apparel has developed two open-source automated garment-to-yarn technologies, piloted in Hong Kong, where in 2019 they produced three tonnes of garment-quality yarn per day – yarn purchased by the H&M Foundation. In 2021, the first Nordic large-scale textile recycling centre will also open in Finland, with the capacity to take approximately 10% of Finland’s textile waste (Recycling magazine 2020). Information is also important, and inspiration could be drawn from the UK’s online tool, which helps residents find where and how they can recycle their things (WRAP 2015).

6.9 Taking advantage of lessons learned from the pandemic

The COVID-19 pandemic has brought with it many changes, not all of which are negative – from more telecommuting and less travelling, to new ways of consuming and communicating. The Swedish Climate Policy Council (2020) and the UK Committee on Climate Change (2020) have both urged their respective governments to support telecommuting and remote healthcare services, the latter advocating improved broadband instead of new roads. Support could cover more flexible working hours. Experts have also called for supporting innovative technologies emerging from the crisis, such as localised manufacturing, including 3D printing (McGinty & Schröder 2020).

A key factor of the circular economy is that it is digitally enabled, and the current digital acceleration taking place off the back of the pandemic can boost the creation and uptake of many new circular solutions, not least through new means of providing access to and valorising idle assets. The space where we live and work is a case in point, and we need to redefine buildings to accommodate new functions, be it turning business hotels into apartments, downtown cafés and restaurants into co-working spaces, parking lots into gardens, and half-empty offices into more modules. Cutting down costs on rent is likely to become an increasingly important aspect for firms to maintain competitiveness.

6.10 Emphasising connections, and finding synergies across firms, sectors and systems internationally

The circular economy is above all a team game. First, this concerns the dynamics in the circular ecosystem. As recovery measures imply urgency, one palpable risk is taking hasty actions carried out in isolation. Previous and subsequent stages in processes need to be taken into account; designers and producers need to know each other as well as the end user. When different colleagues, departments, firms and sectors have more shared visibility they can jointly minimise their collective waste by jointly designing more efficient streams of both materials and energy. The Decoupling Advisory Group to Zero Waste Scotland(2020) has proposed embedding the circular economy, with goals for absolute decoupling, across all departments and the governmental public sector.

Second, the outcomes depend on the dynamics beyond the circular ecosystem, in interactions with neighbouring systems, which the UN SDGs help visualise. In Europe, many of these goals have seen insufficient progress, for example climate action (SDG 13); life on land (SDG 15); industry, innovation and infrastructure (SDG 9); and responsible consumption and production (SDG 12), all linked to the circular economy (Eurostat 2020b) . As mentioned, materials, fuels and food account for half of GHG emissions and over 90% of biodiversity loss (SDG 14 and 15) and water stress (SDG 6) – the latter an area recognised in arid Spain’s recent circular economy strategy from June, through its water efficiency goals (European Circular Economy Stakeholder Platform 2020). The goals connect further. For instance, SDG 12 (also 9 and 11) supports SDG 13, which in turn supports SDG 15; climate change is driving 11-16% of biodiversity loss, a percentage expected to increase (WEF 2020b).

The EU Biodiversity Strategy for 2030 highlights that the pandemic has raised “awareness of the links between our own health and the health of ecosystems” (European Commission 2020f). On a national level, Sweden’s new circular economy strategy has sprinkled SDGs across its priority areas, highlighting health and especially toxicity aspects (which have made it into the budget), while linkages to a well-being economy have been made in Scottish recovery proposals, similar to the Doughnut economics methodology – part of Amsterdam’s circular economy strategy – which highlights elements such as culture, community and connectivity, health, access to housing and education (Government Offices of Sweden 2020a; Government Offices of Sweden 2020b; Doughnut Economics Action Lab 2020).

Case study: Buildings building a circular recovery

The recovery agenda has not yet become circular – with one exception: the built environment, in particular renovations and upgrades. There are good reasons. Globally, the urban land area increased by two thirds between 2000 and 2012 (WEF 2020a). The construction industry uses as much as 40% of the world’s raw materials while accounting for one third of GHG emissions, with large differences globally (FIGBC). The average lifespan of a building in China is 30 years compared to 132 in Britain (Hartmann 2012).

The future can be different. In 2050, material efficiency strategies could reduce housing emissions by as much as 70% in India and China, while improved recycling of construction material could reduce total GHG emissions by 14-18% n 2050 in the G7 countries (IRP 2020c) A single measure in the Netherlands, requiring secondary materials in new buildings, would see the country’s total circularity metric increase from 24.5% today to 37.2% (Circle Economy 2020b). A study of 12 low-carbon stimulus measures showed that one of the measures, to retrofit houses for energy efficiency, had the single largest potential to create new jobs, between 6 and 13 million jobs across the EU (McKinsey & Company 2020). However, to meet the 2030 climate and energy targets, additional annual investments of approximately 125 billion euros – double the business-as-usual scenario – are needed just for the residential sector (European Commission 2019c).

A recovery policy paper highlights two circular investment opportunities in the built environment: The first one, renovation and an upgrade of buildings, has, as mentioned, already appeared on the recovery agenda, in the UK, New Zealand, Germany, Italy, Sweden and Luxembourg (Ellen MacArthur Foundation 2020b; Evans & Gabbatis 2020; Government Offices of Sweden 2020c; Erang 2020), all of which have allocated substantial sums until 2021 to renovate homes and improve their energy efficiency, in line with the European Commission’s commitment to at least double the annual renovation rate of existing building stock. Denmark, among the most ambitious, has allocated 30 billion Danish kroner (4 billion euros)to the renovation of social housing until 2026, including measures such as installing insulation, window replacements and replacing oil-fired heating (Shankleman 2020; The Danish Ministry of Transport and Housing 2020). Selecting which renovation projects are prioritised carries a dimension of social equity that must not be overlooked.

The second investment opportunity presented, material reuse and recycling infrastructure, has been less common. To facilitate exchange, material passports, which are also mentioned in the European Circular Economy Action Plan, play a central part. Design is also essential. One example mentioned is that designing steel for reuse could potentially bring 25% lower material costs. A switch to renewable and waste materials should also be encouraged for cement, concrete, asphalt, bricks, plaster and glass, steel, insulating material, plastics and aluminium, as highlighted in the low-carbon road map for the Finnish construction industries (CFCI 2020).

The Doughnut economics methodology guide also highlights that buildings should be developed with adaptable functions and systems (Doughnut Economics Action Lab 2020). Maximising the utility of existing space, by for example repurposing offices and hotels, should be prioritised over a new building boom, and the trend towards shared multi-space environments should be encouraged (FIGBC 2020).

In Helsinki’s circular economy road map, education (including circular economy basics) and communication are listed as the first steps in the section on construction, along with synthesising good examples (City of Helsinki 2020). For that, research is also key, and commercial-scale pilot projects are needed for adaptable assets, flexible spaces, relocatable buildings, performance procurement and models that account for material depreciation (ARUP & Ellen MacArthur Foundation 2020). Frameworks for material passports applied to materials in buildings should also be made use of to create national material banks, not least as examples from the Netherlands have shown that 98% of building materials can be reused – if there is a recipient (EPEA & SundaHus 2017; Holland Circular Hotspot 2018). Quotas for renewable and recyclable materials could enable this. Finally, ambitious goals are important too, such as the Netherlands’ goal to make its construction sector 50% circular by 2030, and in this context, industry road maps can help those goals materialise.

7. Final remarks

The COVID-19 pandemic has wreaked havoc on our economies, exacerbating already vast inequality, while doing little to address the root causes of an economy marked by haste and waste. After the 2007-2008 financial crisis we did not build back better.

We now have a chance to do just that – build back better, through a circular economy. Rather than being dominated by the thinking that largely caused these crises, our responses must instead be shaped by seeds that grow and flourish in the long term. They must account not just for individual organisms, but also their connections, optimising the entirety of the system, over time.

This is about the climate, finite resources and our ecosystems, about a new, more resilient economy, and, finally, it is about people – and new jobs in the range of hundreds of millions globally. Given the scale, international organisations, governments and public-sector organisations at all levels, businesses, third sectors, and individuals all need to jointly shape this transition.


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Ten seeds for a circular ecosystem


Tim Forslund

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Tim Forslund

Specialist, Circular economy, Sitra



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