Circular Economy in the Nordics: Conference Roundup
Circular Economy in the Nordics – how can we make it happen? That is what the conference organised by the Nordic Council of Ministers and the Nordic Working Group for Circular Economy, in collaboration with Nordic Innovation and the Nordic Circular Hotspot, set out to solve. Held on the 16th of June in Oslo, the event gathered together 90 signed-up in-person participants and a further 200 joined online for the day.
The conference provided a platform for stakeholders from all over the Nordics to come together to discuss the opportunities and barriers to the circular transition. Comprehensive participation created an engaging conference that provided a cross-section of the state of circularity in the Nordics today. The insights and reflections will be beneficial input for setting the agenda and raising the bar at the Nordic Circular Summit in Stockholm this November.
“Circular Economy is integral for the Nordic Vision 2030”
Circular Economy is one of the priority topics during Norway’s chairmanship year of the Nordic Council of Ministers. During Norway’s time in the driver’s seat, the focus has been on creating a green, competitive, and socially sustainable Nordic region. Espen Barth Eide, Minister of Climate and Environment (NO), opened the conference with a clear message on the role of the circular economy in the future of the Nordic region.
“There is now a lot of coordinated action, growing awareness among the public, and a growing interest among the business sector towards the circular economy.”
Eide came to this conference with the stark message that we need to be sustainable, regenerative and circular. As he pointed out, the circular economy is a relatively new topic to the Nordic Council, although the countries themselves have worked with it for much longer. “There is now a lot of coordinated action, growing awareness among the public, and a growing interest among the business sector towards the circular economy,” Eide summarises. Circularity as a system is moving away from its roots as a climate-motivated movement and making it firmly into the business sphere. The message repeated by a number of speakers at this conference is that circularity can be both cost-effective and highly competitive.
Disruption has awakened us to the importance of resource productivity
We can build better, smarter businesses from being increasingly sustainable, regenerative and circular. Recent world events, from the pandemic to the war in Ukraine, have caused enormous disruptions to supply lines and resources.The western world is awakening to the realisation that we cannot be wasteful because we cannot be sure that the familiar supply chains will hold.
Having recently participated in the World Economic Forum in Davos, Eide brings back home the message that circularity is now much higher on the agenda than before – especially, among businesses. Resource productivity – creating more from less virgin resources – is now a key discussion topic, especially in connection with energy. Eide sums this up, saying that for businesses: “it’s better to be on the bandwagon now than realise that the world has changed and they haven’t.” While there might be an initial cost to transition to circularity, it is beneficial in the long run. Now we just need to get this message out.
“We are many on a very small planet”
EU councils are doing a lot of innovative work, among other things, on resource management, waste management and nature awareness. One of the keys to this work is the EU Green Deal. As a society and a region, we are moving away from the passive thinking that, as long as we are careful with our resources, we will be fine. Now, a more holistic approach, which acknowledges that we need to take direct and sometimes drastic action to care for our planet, is taking root.
Eide suggests that what we might be seeing across the world currently is a reverse movement on the recent years’ extreme globalisation. Instead, more weight is now being put on smaller, local and regional collaborations. When it comes to environmental and sustainability work, the Nordic region can be a strong frontrunner. As Eide reminds us, we already share a lot of the same values, close relations, and similar bureaucratic systems. Together, the 8 self-governing Nordic regions are well-placed to inspire the rest of the world.
“It is not enough that we agree – our policies also need to work together”
Said Paola Migliorini, Deputy Head of Unit, who led the conference audience on a comprehensive overview of what the EU is currently working on in terms of policies and regulations governing circularity and sustainability. The bigger goals, such as those on climate and emissions, need to have the necessary tools to be realised. That is where policy and regulations come in. Migliorini emphasises the crucial role of policies that work well together, naming examples of current and upcoming legislative instruments that address a wide range of topics from textiles to construction materials. Improved policies will also ensure a level playing field across the EU and address competitiveness and the single market, as the same rules apply to all products coming into the European markets. For consumers, this will increase the clarity and transparency over what products include.
“We need to stop giving to others the issues we have not managed to solve in the EU.”
“What is important in the EU green deal is the push on the circular economy - it is how to change the way we produce our things,” said Migliorini. It’s been two years since the launch of the EU Green Deal. Since then, we have come along a great deal on the green and digital transition. Now, further progress requires investments in specific areas. In the Nordic social and geographic contexts, these include mobility and waste management. A transition requires a mobilised industry and a public that is ready to make the changes. The EU Green Deal tries to achieve this with the help of the Circular Economy Action Plan. Migliorini points out that the work is now turning towards the second Circular Economy Action Plan which focuses on products. This area was identified as a weakness in the first Plan. She emphasises that when more actions are taken at the product stage, it becomes easier to make the rest of the chain sustainable. It also gives us more control over waste, which is currently one of the highly problematic areas for the EU. On this, Migliorini calls for better control over waste exports, concluding that: “we need to stop giving to others the issues we have not managed to solve in the EU”.
“Worrying about resources is nothing new”
“50 years ago we had a lack of resources. 40 years ago we decided that actually we are fine because demand increases prices,” notes Mr Shardul Agrawala, Head of the Environment and Economy Integration Division at OECD. While his opening remarks are made with good humour, there is a stark basis of truth to them. Mr Agrawala launches into a review of material resources and the role of circular business models by introducing the ‘Resources Problem”. He points out that: “we, as a society today, are not running out of resources – but the capacity of the Earth to absorb the waste we produce.” Global material use will double by 2060 but this growth will differ by material and region. In metals, the increase is fourfold. And yet, it is not the resources we actually care about. It is the consequences.
As a consequence of our consumption, greenhouse gas emissions related to material management will more than double by 2060. Environmental impacts from extraction and processing will more than double – but vary widely by material – with the extraction of primary materials causing much more environmental damage. So, what roles can circular business models have? Mr Agrawala highlights 5 important business models to note: circular supply models, resource recovery, product life, sharing economies and product as service systems.
“We, as a society today, are not running out of resources – but the capacity of the Earth to absorb the waste we produce. ”
But the question remains – if these ideals and models are so good for the business and the environment, why are we not seeing more of them? The truth is that more issues still need to be addressed before we can have a smooth transition to a circular economy. Realising the true environmental benefits will require more widespread adoption of circular models. For this to happen, we need to act strongly on the front of policy and regulation. As Mr Agrawala reminds us, it is important that policy does not favour incumbents but instead promotes demand and works in coherence with social policy objectives.
“Circular transition requires systematic action and collaboration”
Saying this, Susanna Sepponen, Business Manager from Gaia Consulting, verbalises what many of the conference’s speakers have alluded to. In their research, Gaia has identified multiple areas of interest where the Nordics could systematically work together – these range from industries to material flows and transition drivers. She puts acutely the thought that also lies at the foundations of the NCH: “because the circular economy is a systematic change, it doesn’t happen so much inside the sectors, as it does at the intersections and across the sectors.”
“Because the circular economy is a systematic change, it doesn’t happen so much inside the sectors, as it does at the intersections and across the sectors.”
According to Sepponen, the Nordic region is both incredibly well-placed and very challenging for the circular transition. There is a lot of action and interest to these topics, not least because of the importance of the forestry sector. At the same time, there is a lot of regional variation between, for example, urban and rural and northern and southern regions, creating very different needs and obstacles. Sepponen also reminds us of the importance of investing in the logistics sector – because if we have no way of moving materials around, the circular economy cannot work.
Other opportunities, which resurface multiple times throughout the conference, include digitalisation and the development of further tools and databases. And while the Nordic region is known for its high-tech and innovation, there is still an issue with scaling solutions up to market size. For monitoring reuse and waste management, digitalisation offers further unexplored opportunities. Tiina Karppinen, Researcher from the Finnish Environment Institute SYKE, has been exploring ways to measure waste prevention and reuse through digital solutions. These opportunities come in many forms from online platforms to commercial stock management data. And yet, monitoring waste prevention in the Nordics still relies heavily on waste volumes.
“If you want to go fast, go alone – if you want to go far, go together”
Waste prevention is not the only area of interest where a more preventative approach is identified as an opportunity for increasing circularity. A big part of the Nordic GDP is in some ways tied to public procurement. Dag Strømsnes, Head of Division at DFØ, notes that, in Norway, the value of public procurement is 600 billion NOK. And according to Ida Meulengracht Ginsborg, Specialist Consultant at Københavns Kommune, for the city of Copenhagen alone, 8,2 billion DKK goes to public procurement. However, there is strength in numbers. For the Nordic region as a whole, the equivalent number could be as much as 2100 billion NOK. In Norway, public procurement accounts for 15% of the GDP, but more crucially, it could affect as much as 60% of Norway’s emissions. This makes it important to increase the share of green public procurement.
Inger Ek, Director General for the National Agency for Public Procurement, notes that the climate impact from Swedish public purchases is 23.5 million tonnes of CO2. Here too preventative measures can be the path to circularity – for example, the construction sector needs to increasingly focus on the impact of a building throughout its lifecycle. When issues are identified early, there is more control over them. Later, there is less chance to close the climate gap and it comes with a bigger price tag. Ek also calls for more following up – it is easy to set requirements, but the impact can only be realised through consistent and transparent enforcement.
The role of social sustainability
Circularity creates endless opportunities – but there are also numerous barriers. The same challenges were raised by one speaker after another throughout the conference: the need for more guidance, collaboration, and increased availability of data; the need for innovators and investment into solutions; and the need for long-term perspectives and cohesive policy.
Among change-makers, the more cautious voices are now stepping in to warn about the social justice of a new economic system. Moving from a profit-focused capitalist system to a circular economy is a crucial turning point during which we need to ensure that the transition doesn’t leave anyone behind. As Ek notes, creating a fair and just circular transition requires us to consider ‘social sustainability’ and how we can ensure the transition doesn’t create new barriers for those who are already struggling.
The environmental impacts of the circular economy do not form a simple picture, as was pointed out by Mr Agrawala. In some cases, adopting a circular economy might simply move existing impacts from one part of the chain to another. In this, it is crucial to account for customer behaviour and possible unintended consequences. For example, when things become cheaper, we might use more of them – this is a scenario which we have seen before in regards to driving. Unintended consequences can, in a worst-case scenario, keep the expected environmental benefits from materialising. This is something many industry experts also note. One of them is Jan Viegand, Partner at Viegand Maagøe and an expert on batteries. He also cautions that, with the booming EV market in the Nordics, a lot of negative sustainability effects come with the positives for the increased battery demand.
A cultural challenge and the growing problem of greenwashing
Another topical issue is greenwashing. The Nordics have always aimed to be transparent about climate claims and we have long traditions on this through concepts like the Nordic Swan mark. More policy is coming to regulate green claims across industries, and Migliorini noted that the EU is working on multiple fronts to ensure that green claims are substantiated. When companies are making promises, they have to connect to reality.
However, among the hindrances to the circular economy, maybe the most mentioned barrier across the whole conference is the lack of knowledge and skills. As Janne Rautio, Circular Economy Specialist at Digipolis, acutely points out, the challenge of moving to a circular economy is cultural, requiring significant investment in education. On the same lines is Trond Markussen, President of NITO, who also notes that the lack of knowledge about circular economy is consistently identified as a barrier within the engineering industry. He notes that there is an urgent need to invest in reforming the current framework of engineering and STEM education. According to him, an important driver for this change is a clearly formulated message: circular economy creates value, not only cost.
Kia Egebæk, Partner at PlanMiljø, when talking about the role of Product Service Systems in the Nordics, also notes that the penetration of these models is currently understudied and, as such, this presents a barrier to businesses adopting circular business models. There is a lack of willingness from investors to invest in these models because they are new and have different cash flows to traditional models. Legislation and policy also don’t currently prefer circular business models. In order to improve the attractiveness of PSS models, we can provide proof of their economic viability and environmental benefits.
Along similar lines is Marthe Haugland, Head of Circularity at Nordic Innovation, when she talks about Nordic Leadership in low carbon and circular construction. Haugland notes that there is a lack of knowledge and skills among businesses, which hinders how they can implement circular business models. This is where education comes in. Nordic Innovation is one of the key providers of circularity know-how in the Nordics and, among other things, runs a highly successful series of workshops for businesses on how they can move from linear to circular business models.
“A vision without a strategy is a dream”
This is what Bjørn Bauer, CEO of PlanMiljø, reminds us of before continuing: “the circular transition requires strategy, budget and leadership. Furthermore, these need to go hand-in-hand with policy.” A holistic approach requires more bottom-up change that includes and motivates larger sections of society. Here, it becomes very important to support and empower the people who want change. Today, youth organisations play a very important role in this. Success in the circular transition requires the willingness to make the change happen and local and regional actors, including municipalities, have an important role in creating the necessary opportunities.
While there are still many identified barriers to the circular transition, the important message to take home from this conference is that they can all be solved. The issues standing in front of the circular transition today are issues which we are more than capable of fixing. In the Nordic context, a handful of sectors are repeatedly identified as key players. These include construction, waste management, textile industry, and logistics. If we invest in these sectors, together with stronger input in education, governance, and policy, we are well on our way of making circularity a reality.
Check out also: the conference website and reports from recent NCE projects.
