In the pursuit of sustainable and environmentally responsible economic practices, the concept of circularity has emerged as a guiding principle. Not only is there more and more (international) attention for this concept, but guiding legislation has been published, and countries are setting ambitious targets to transition towards circular economies. But what exactly does that entail?
What is circularity?
The simplest explanation of what circularity is is that what goes out at the end of a system is – probably after some post-processing – able to go in at the beginning of a system again, without degradation of quality. An example: a particular type of plastic is needed, say for LEGO blocks. After the use case is over (the kid, or adult, discarded the toy), the used plastic will be recycled into materials that could be used for the same purpose, or a different one. And a beautiful example from nature is the biome in a bottle, where fertile ground, a bit of water, and some small plants and other organisms are put in a closed glass jar or bottle and will flourish without any need for help for years to come.
The essence of a circular economy is reuse, remake, and recycle. This is a totally different mindset than the ‘classical’ linear economy, where raw materials are taken and made into something, which is then disposed of rather than recycled. Well-known is, of course, the usage of fossil fuels rather than biofuels or renewable energy. Note that this circularity not only takes place on the higher ‘out of my hand’ levels but also on a personal level a lot can be achieved (e.g., reusing coffee grinds as garden fertiliser or using filtered shower water to flush the toilet). As the current (increasing) global rate of consumption in the present linear economy results in far-reaching environmental, geopolitical and social consequences, the step to a circular economy is a necessity rather than a non-binding choice.
The Dutch government has set the year 2050 as the target when the entire Dutch economy should be circular. Following the latest United Nations IPCC (Intergovernmental Panel on Climate Change) report, the Dutch National Programme Circular Economy was launched in February 2023. This report is meant to elaborate on the steps that are necessary to achieve the ambition to have a fully circular economy in 2050. There are four main points of attention that can directly influence circularity: limitation of the usage of raw materials, substitution of raw materials, extending the lifespan of products, and high-quality processing. Nevertheless, it is acknowledged that even within a fully circular economy, there will still be a limited outflow of waste. More on that later.
Reports on the Northern Netherlands
As companies are leading the way in enabling – or disabling – a circular economy, the focus should be on enabling them to participate in this revolutionary new way of production. Especially focussed on the Northern Netherlands, the consortium ‘Noord-Nederland verdient Circulair’ or ‘the Northern Netherlands earns circular’ has been erected, with the RUG being one of the partners. Led by FSS lecturer Dr Frans Sijtsma, accompanied by colleagues from the Faculties of Economics and Business (FEB), Science and Engineering (FSE) and the Faculty of Behavioral Sciences (FBS), the task of the RUG in the consortium was to develop a clear view on the development of the circular economy in the Northern Netherlands.
The results of this role have been put together in two reports, the first: ‘Sneller Circulair: luisteren naar ervaringen van bedrijven om barrières te verminderen’ being the main report including the current status of and the vision on the transition to the circular economy in the Northern Netherlands, and the second: ‘De ecologische voetafdruk van bedrijven en compensatie van niet-circulariteit: een verkenning’ being an exploratory report about the possibility of the compensation of the non-circular part of companies’ ecological footprint. A special touch to both reports is that around 200 students from both FSS Bachelor courses helped with conducting approximately 70 interviews, as well as a recent FSS graduate in the role of junior researcher.
Faster Circular
Sijtsma cum suis conducted thorough research on the current status of circularity among just shy of 400 companies that are settled in the Northern Netherlands. They found that there is indeed already a movement motivating individual companies to transform their businesses into more circular forms. Although successes are certainly there, more than the speed at which the current developments go is required to have a noticeable impact on the overall system.
Therefore, they suggest reforming the approach from individual stimulation to achieving a system-wide transition. Taking the experiences of the companies who already made the change as a base, combined with a broad set of partners, should speed up the shift to circular. Hence, the introduction of an orchestrator group that directs and assesses the process is proposed. This group should collaborate with various entities and combine university expertise, business knowledge, and government capabilities to actively overcome barriers and drive businesses towards a circular economy.
Footprint compensation
The second report investigates methods for creating a company-specific footprint to link a compensation mechanism to the non-circular portion of the footprint. This partially links back to the notion that there will always be a (limited) stream of waste resulting from processes in the (circular) economy. The goal of this research was to find out if there is a viable way to ‘mask’ this waste flow by compensating for it in some way.
Currently, such practices already happen, for instance, by companies buying CO2 certificates, so paying to be allowed to emit more carbon dioxide. In the case of the Netherlands, the European Union is the owner of these certificates via the EU Emissions Trading System (EU ETS). The revenues from the EU ETS feed mostly into national budgets. Member States use these revenues to support investments in renewable energy, energy efficiency improvements and low-carbon technologies that help reduce emissions further.
The University of Groningen has developed the energy analysis programme (EAP), with which the energy emissions of household consumption can be calculated. However, none of the existing input models for this programme has a company-specific scope, which makes it less ideal to work at the company level. While geographical value chain mapping by companies could enhance the spatial precision of the data, the researchers emphasise that there are still several methodological and data challenges for creating company footprints, as the quantification of a company’s circularity is needed for meaningful comparisons between companies.
Concluding
The circular economy is a necessity for achieving sustainable and environmentally responsible economic practices. However, the current state of circularity among companies in the Northern Netherlands could be more optimal. Nevertheless, the two reports by Frans Sijtsma et al. offer insights and recommendations for accelerating the transition to a circular economy. By adopting circularity as a guiding principle, companies can contribute to a system-wide transformation that benefits both the planet and the economy.