It’s clear that the Circular Economy presents a whole range of opportunities, but also challenges. To understand the barriers to circularity, and what conditions are required for achieving it, Cefic spoke to experts from European policy and business.
What are the main barriers to Europe achieving a circular economic system?
Bjorn Hansen: One of the main barriers is to understand what the real issue is. For most materials we have a linear economy, and we make small tweaks to increase the number of loops or the length of the loop. But the switch to a true circular model is not a continuous process, it’s an abrupt shift. We shouldn’t base our whole strategy on assuming that we can make a smooth transition.
Janez Potočnik: I would guess that political [barriers] are most difficult. It is about leadership and governance in the first place. On all the levels and including all stakeholders. Political barriers too many times involve and represent the prevailing voice of those most vocal for protecting status quo and existing interests and profits.
Puneet Trehan: There are quite a lot of opportunities and challenges in the recycling element of the Circular Economy. For example with plastics the technology is there, it’s more of an issue of the supply chain. With textiles, the infrastructure still has a long way to go. The technologies need to develop so that the system makes it economically viable.
What are the financial, technological and political conditions required for a circular economic system?
Bjorn Hansen: The technology is the most important thing. That starts with designing for true circularity, then the ability to collect, separate, transport and recover all materials to their full quality.
You also need to have the political will, which I think we have, but it’s going to be at a cost. We have to work out what the negative impacts are, such as the value of the materials you are recycling compared to the impacts of the pollutants of the material.
On the economic side, it’s about reducing the risk for companies to invest. The way to do that is also for authorities to finance research. It’s important that it’s seen as a long-term investment, with a long-term strategy.
Antonia Gawel: Technology is an enabler that has supported some transformation already. But to scale the circular economy concept we need new policy approaches and a closer look at potential financing models which blend public and private sector resources and capabilities. Often the incentives are misaligned and the financial models considered risky by traditional standards.
Janez Potočnik: First, we need the understanding that the way we produce and consume is not sustainable and that the transformation of the existing economic system is simply unavoidable. And secondly to see the circular economy as an opportunity rather than a problem. If we are sincere in our efforts for growth and jobs in the future, this is a way to go.
Who should be involved in discussions to bring about these conditions?
Bjorn Hansen: You need a proper stakeholder forum: regulators, the chemical industry, their customers, science, and research. The political risk is that you won’t see tangible results within a normal political mandate of four to five years.
Antonia Gawel: Leadership has to come from business and government – and society, because we’re asking consumers to alter their behaviour. Companies need to be at the table with government, otherwise you’ll never have the critical mass needed for change. The European Commission is already leading some of the thinking and conversation, as are many European businesses. But we have to recognise that growth in infrastructure, population and consumption is very much outside of Europe.
How do we arrive at collaboration?
Janez Potočnik: There is no clear recipe. One can design the products in a different way, organise the production process more efficiently, influence more responsible consumer behaviour, change existing business models etc. For me, probably the most efficient way is via eco-design and change of existing business models.
Antonia Gawel: You have to get quite practical and look at very specific sectors and cases, and really begin applying it in practice. You can’t stay at a conceptual level. The same applies for financing. What are the specific challenges in financing it? Then start to address them individually.
Nicola Kimm: We have exchanged knowledge with large chemical companies on circular economy with regard to polymers recycling and the phase out of certain substances. We are looking for ways to join forces to revolutionize the global shift toward the reuse and recycling of plastics and already designing products with recycling at end of life in mind.
Puneet Trehan : I’ve been in all the bio conferences around the world to set up value chain partnerships. We set out what we can offer at IKEA – we can alleviate the risk mitigation of the investments that the industry needs to do. It’s a long term process and we’re not a chemical or polymer company. We’re willing to make this investment but we need other partners to come along with us.
What kind of role do you see for the chemical industry in moving towards a circular economy?
Janez Potočnik: The chemical industry is clearly an essential part of the transition. It should lead and not wait for the time when those changes will be unavoidable – this is not how trust is built or how responsible, forward looking business, will need to act.
Puneet Trehan: The chemical industry, if I’m being honest, is not really thinking in the end-consumer or the end product. A polymer company takes a polymer to make it a plastic and then that plastic company sells it to someone else who sells it to us – it’s a long chain. It should be a much stronger partnership.