It’s really happening. The circular economy is not a green freak initiative that will remain on the desk as an academic thought. New business models are rapidly brought to market and policy makers are finalizing policies for the transition to a circular economy.

Circular-linear economyLet me remind you why this is necessary. Because status quo isn’t an option. Not even improving what we do today is an option. A systemic shift is absolutely vital. Global population is booming and even more so the middle class. By following our current linear model of take-make-dispose we need the equivalent of 2 – 3 earths worth of resources. 80% of all products that are sold today are disposed within a year. This is obviously not sustainable. Not even possible. Thus, something completely different is needed as we enter the future. And the future is now!

This week I attended a workshop on circular economy initiated by the Nordic Council of Ministers. It was an inspiring session, gathering progressive businesses, policy makers and NGOs from the Nordics. It surely underlined the fact that within the transition to a circular economy, Norway is not among the leading pack. Luckily, I would say, EU-regulation on the matter will be implemented in Norway. EU will later this year bring forth their circular economy legislation. This will not only include ambitious targets on recycling (mainly material recycling), but it will most likely capture the whole concept of the circular economy. Meaning it will address and demand reuse, repair, and remanufacturing of products. Products cannot become waste. They must remain in the value chain.

There are many examples of new business models that make use of what earlier was treated as waste as the basis of their business. Three quick examples, which I haven’t written about before;

  • Upcycling: Thermozell, a Danish company using styrofoam to produce an insulation product, a product with arguably better attributes than the cement it is replacing
  • “Incycling”: a large Nordic construction company has insourced all recycling activity, with an aim of reusing as much as possible
  • WiderøeRepair: Widerøe has repaired 16 of their planes, at 1/3 of the cost of buying new ones and extending life time by 10 years – see video. Being the first global mover in this area, they aim to sell this competence internationally

So where does this leave companies in the waste management industry? Waste is disappearing right [?]. We must fight this! Hold on to our (profitable) business models as long as possible. If we did that, it would be the sure death of my company. Rather, we must embrace this shift. And more importantly play an active and innovative role in it. Frankly, we must cannibalise our business model. By advocating waste reduction. This is what our customers want. We have 40.000 customers! But we must do this in a way that is profitable. For us. And for the customer. Done right, the circular economy makes way for business models that are win-win, for us, our customers, as well as the environment and society. In familiar words – truly sustainable.

The transition to a circular economy is a massive opportunity for the waste management industry. After all, what are our core competencies? You could say it is collection, sorting and disposing of waste. But I would rather argue that it is knowledge. Knowledge of recycling and of materials. This knowledge may be used (in a profitable way) to speed up the transition to a circular economy. It is not going to be easy. It requires a lot to shift traditional thinking based on a company history of 90 years. But after all, our vision is that we believe waste is the solution to future resource shortage. As we all know by now – by continuing linearly we are going to have a massive resource problem. We represent part of the solution.

Circular business models are all about collaborative business models. Companies from the whole value chain – or circle – must together outline new business models.  Just like we did when setting up a new model for circulating old windows into raw material for Glava’s insulation production, and as we did when collaborating with Nespresso and Hydro when establishing a recycling solution for Nespresso aluminium coffee capsules.

Panelists ranging from politicians to representative from IKEA

Panelists ranging from politicians to representative from IKEA

At this week’s workshop I also met a lot of ambitious policy makers. Including a representative from the Danish parliament – representing a party “in the middle”. She turned out to be an advocate of circular economy. Arguing for it in the current election campaign! I have yet to meet that Norwegian politician. Are they even familiar with the concept?

I don’t expect politicians, and thus regulation, to lead the transition to a circular economy. However, we cannot live with yesterday’s policy framework. It’s time for bold political moves. And letting go of what worked yesterday. Progressive businesses are ready. They will lead. And the ones not entering the circular economy band wagon? In my opinion – they will be the losers. Stuck with higher costs and an unacceptable carbon footprint.

CE_cph1

3 kommentarer

  1. This is my favourite part: «It’s time for bold political moves. And letting go of what worked yesterday.»
    If politicians can let go of the linear model they’ll see it has been undermining the economic growth they desperately seek. Similarly if they can let go of the red-tape model where government runs around the whole economy with micro-managed rules, targets and taxes they’ll see this has been undermining the ecological progress we all desperately need. The bold political move, to launch circular economy from pilot stage to really happening systemically throughout the economy, would be to build it into markets. I hope this circular economics will be of interest for the Nordic region? http://blindspot.org.uk/projects/#ce4real

    Likt av 1 person

  2. I share your views here @blindspotting. We both agree that the key word in «circular economy», is «economy». Markets have the ability to solve what politicians have proved they’re incapable of. Even though there is progress on the regulatory arena – I’m at least hoping for an ambitiouse circular economy package from the EU later this year – I do not believe that we can afford to wait for the politicians. Businesses must see the attractivenes in circular business models – in order to do so it is also necessary to think scale. As you say, it is necessary to move from pilot and symbolic show cases to full-scale volume focus that represents a systemic shift.
    Circular economics is definitely on the move in Scandinavia. Still there is a long way to go. In Norway we need to shift focus from solely dicussing renewable energy – to materials and a circular approach – i have started to refer to this as «renewable commodities»…

    Liker

  3. Progress with circular economy reminds me of the enthusiasm of my kids who would ask ‘are we there yet?’ at the beginning of the journey. Politicians get confused about their role, thinking it’s about constraining markets when the real opportunity is to unleash innovation throughout the economy to design out problems. This circular economy package is sadly tied to the old model of regulation so any actual systemic shift has yet to be considered. Even worse, proponents of circular economy across Europe are busy pushing the old regulation and the old method of market intervention – taxes.
    Renewable commodities is a nice concept, especially if people see it applies to almost all materials not just bio-based. I presented similar ideas for a mining and minerals community in Stockholm recently, http://blindspot.org.uk/wpb/wp-content/uploads/2013/07/miningconf_final.pdf

    Likt av 1 person

Legg igjen en kommentar

Fyll inn i feltene under, eller klikk på et ikon for å logge inn:

WordPress.com-logo

Du kommenterer med bruk av din WordPress.com konto. Logg ut /  Endre )

Google+-bilde

Du kommenterer med bruk av din Google+ konto. Logg ut /  Endre )

Twitter-bilde

Du kommenterer med bruk av din Twitter konto. Logg ut /  Endre )

Facebookbilde

Du kommenterer med bruk av din Facebook konto. Logg ut /  Endre )

Kobler til %s