Policy for Circular Economy: Prestudy for Improved Policy Development
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This paper describes mainly the approach and results from a project “Polcirkeln” within the research program RE:Source, funded by three Swedish agencies: the Swedish Energy Agency, Vinnova and Formas. The project Polcirceln has studied the current situation and possible future effects of various measures for a circular economy. Among others, the EU’s proposed policy package for a circular economy has been studied. A selection of today’s flows of products, materials and waste constitutes a starting point, and challenges and possible effects on material flows and sustainability have been formulated and analysed based on experiences and views from different actors in the value chain (mainly from industry) and other experts. Methods used in the study are, for example, interviews, web surveys, workshops and scenario analysis.
The importance of policies moving towards a more holistic approach to achieve more circular flows has been stressed by all stakeholders in the study described in the paper. Instead of dividing activities, obstacles and opportunities between waste, materials, production and consumption, a holistic approach should be introduced in the analysis of the challenges and designing of solutions. Another main finding is that a change to a circular economy needs an increased and developed cooperation between companies and other actors along the value chain; thus, there is a need to develop policies in order to support the new improved ways for cooperation.
KeywordsPolicies Regulations Circular economy Company engagement Supply chain Cooperation
Circular economy (CE) is a rapidly adopted concept to improve resource efficiency and sustainability, with Braungart et al. one of the early contributors . In order to reach CE, there is a need for a lot of changes in society, which will have a lot of consequences both for industry and for society. The Ellen MacArthur Foundation has been working intensively to create an awareness of that [2, 3]. There are a lot of actions to be done in order to drive the transition, for example, implementation of new regulations and policies, but also systematic attempts to enhance the engagement and request for more circular products and offers among customers and suppliers along the supply chain.
The “Polcirkeln project” within the research program RE:Source, funded by the Swedish Energy Agency, Vinnova and Formas, was a preparatory study, to be used as a base for further research. The study was carried out as a collaborative research project with 19 company representatives covering the value chain. The aim of the project was to study the current situation and possible future effects of various policy measures for a circular economy on circular flows of products, materials and wastes, using Sweden as the “test case” . Among others, the EU’s proposed policy package for a circular economy has been studied . Today’s products, materials and waste flows constitute a starting point, and challenges and possible effects have been formulated and analysed based on experiences and views from different actors in the value chain (mainly from industry) and other experts. While the project addresses predominantly policy aspects, earlier research related to ecodesign by Boks et al.  points to a crucial role of language and communication for implementation and the under-researched link between ecodesign proponents and executors (technical experts, decision makers and marketing experts). Thus aspects of communication and cooperation were addressed in interviews and questionnaire. Methods used in the study are, for example, mapping of flows based on statistics, interviews, a web survey based on questionnaires, workshops and scenario analysis.
Plastics from the building industry (construction and demolition).
In this paper material flows related to electronics have been chosen as the sample, since the data available were most complete and reliable for that material flow.
The study was using an iterative approach. Information was gathered and analysed in several steps, starting with mapping the current situation regarding material flows and existing legislation and in parallel interviewing project partners from industries about challenges. Then a web survey was carried out with a larger population including non-participants to gather a wider view about identified challenges and what consequences existing policies have on product design, material selection and end of life and thus on material flows. Intermediate results were then discussed in a workshop, after which complementing interviews were held. Based on the results, a first version of scenarios was developed which considered increased implementation of CE policies and its impact on flows of products, materials and waste. Finally the scenarios and other results were discussed and elaborated in a workshop with actors along the value chain and further developed based on the results of the workshop.
13.2.1 Study of Current Situation
126.96.36.199 Current Material Flows
Current flows of products, materials and waste were studied in order to get a better understanding of the prerequisites for existing and coming policies. This was based on market data, statistics from the Swedish government and information from recycling, refurbishment and selling companies. It was obvious that the data that are publicly available were not detailed and complete and therefore not sufficient to give a clear picture. In order to address this shortcoming, the data quality was described for the different figures given. The final pictures can still be used to analyse the magnitude of effects and thus show which policies will have a high impact on resource efficiency.
188.8.131.52 Existing and Suggested Policies
A study of existing and suggested policies was done, with a focus on policies having an impact on material flows, directly and indirectly. Global, European and Swedish policies were gathered and studied, covering legislation, tax regulations and other incentives, mainly from governments.
13.2.2 Web Survey
A web survey was developed with the objective to gather information from a large amount of stakeholders within the industry, covering all steps along a circular system, including raw material producers, product manufacturers, service providers, users, collecting actors and actors in waste treatment, including incineration.
The questionnaire was sent out to about 200 possible respondents within the project network, covering the intended stakeholders.
13.2.3 Interviews and Workshops
In order to let the stakeholders of the project elaborate their ideas about how policies work today and what possible consequences suggested policies could have, 15 interviews with representatives from different stages along the supply chain and the waste treatment were carried out. One main objective was to find out what stakeholders see as main challenges that have to be overcome in order to change to a circular economy.
The challenges were then listed and elaborated further in two steps at two workshops, where the stakeholders in the project were gathered. One notable aspect is that the stakeholder group was very keen to contribute to the research and to provide positive suggestions about possible solutions to the challenges identified.
13.2.4 Scenario Analysis
In terms of future effects, uncertainty is inherent. However, this does not mean that we should avoid discussing possible futures. Concerning circular economy measures and impacts on consumption, material and waste streams as well as material and energy recovery, it may therefore be appropriate to develop different scenarios for possible future flows and related effects.
Different types of scenarios have been presented by, among others, Dreborg , Börjeson et al.  and Bishop et al. . Overall, all of these types can be divided into probable, possible and desirable future scenarios.
Since the purpose of this study was to link the Commission’s action plan to the effects that this has on future consumption and waste flows, four scenarios were developed where existing and future policies were summarized in packages.
- 1.Scenario 1 (S1): Current situation.
Existing national, European and international policies having an impact on the transition to a circular economy were collected and analysed regarding their impact on the actual outcome as regards material flows and sustainability. The specified date to define existing policies was that they were published and implemented on September 1, 2016.
- 2.Scenario 2 (S2): Including CE package.
The same as S1, but adding the EU’s proposed policy package for a circular economy .
Scenario 3 (S3): Including CE package and suggestions that have been developed as intermediate results from the project Polcirkeln (workshop).
Scenario 4 (S4): “Goal” or best-case future scenario, where sustainable circular flows of products, materials and waste are in place. This was used as a benchmark to understand the outcome of the other scenarios.
13.3 Results and Discussion
13.3.1 Results of the Study of Current Situation
The study shows that the picture is very complex, but that the main flows of materials for electronics are dominated by import and export. It also shows that even with the Waste Electronic and Electronic Equipment (WEEE) directive in force, circular flows are today mainly implemented through recycling.
An aspect that is difficult to handle in the assessment is the area of informal recycling and illegal material flows, for example, the illegal export of electronics, since that data is not gathered in any statistics. Specifications of numbers are varying very much; the actors involved in Polcirkeln assume that numbers for Sweden are low.
13.3.2 Results from the Web Survey
The web survey was answered by 76 respondents, of which 50 gave full answers to all questions. Results show what companies find most important in relation to a circular economy, with focus on what drives and stops them from increasing reuse, recycling, remanufacturing and recycling.
13.3.3 Results from the Interviews and Workshops
In the following, results are highlighted separately for both rounds of interviews.
General challenges from first round of interviews.
- 1.Design, production, cooperation:
Design of products and components
Cooperation between actors
- 2.Consumption and waste prevention:
Procurement (public and private)
Demand for reused/remanufactured product
Information and labelling
Waste management and recycling
Secure information treatment
Definitions and measurements
- 1.There is a need for a more holistic view. Today many of the existing policies address a specific issue/sector and distinguish between improved waste management or product design and waste prevention. They do not consider a systematic picture.
For example, the general goal to recycle and reuse electronics does not consider hazardous chemical substances used in the past. An example are flame retardants based on brominated compounds, which make the electronics fulfil fire-resistance legislation and regulations, but are no longer compliant.
Cooperation between companies is a key to circular economy, and the systems of today, for example, business models and regulations, are adapted to linear economy and thus quite often barriers for cooperation. It is therefore a request from the industry that the policymakers try to push cooperation through policies and through simplified rules (e.g. for shared values).
There is a need for an increased knowledge, not least among SME, regarding existing and coming legislation and regulations; specifically there is a lack of knowledge regarding legislation and regulation affecting other actors part of the own value chain.
There is a lack of enforcement and monitoring of existing legislation, making the “good” companies suffer on behalf of the “bad” ones, since it is costly to fulfil the requirements, while those who do not follow the rules can get away with it (e.g. illegal export of WEEE).
- 5.Definitions and regulations connected to the definitions are very important, and we see that they can even be a barrier to circular economy:
For example, in Sweden, only municipalities have the right to collect municipal solid waste (originally because of hygienic reasons). Items that are brought to recycling centres are defined as waste and are then forbidden by legislation to be reused, remanufactured or refurbished but only recycled as material or energy.
At the same time, it is forbidden for shops to collect waste except for electronics within WEEE—this is a large obstacle for initiatives by textile retailers to increase reuse, remanufacturing or refurbishment.
Labelling—The industry points out a wish to have a standard regarding quality of reused and/or remanufactured products.
The industry also has a wish for standardized systems for information regarding the material content.
- 8.When asking the industry which are the most important factors for reuse of products and components, the answers in interviews and workshops were very similar to the ones in the web survey:
Leading companies already working on improving circularity foresee market possibilities and increased competitiveness due to their efforts, where they also see existing and future policies as an opportunity rather than a challenge.
13.3.4 Results from the Scenario Analysis
The scenario analysis showed that existing regulations and policies of today (scenario 1) do not address the identified challenges for reaching circular flows. We conclude that this is precisely why the challenges have been identified and prioritized during the project. This result applies to all three researched material flows: electronics, textiles and plastics from construction and demolition.
The powerful policy instruments Sweden (and other countries) has had for a long time, for example, producer responsibility and landfill bans for organic and combustible materials, contribute to a well-developed waste treatment system but do not reach the higher levels in the waste hierarchy or the internal circles of the flows.
If we include the EU’s proposed policy package for a circular economy , we will come one step further, and therefore we conclude that the EU’s circular economy package addresses several of the challenges. This happens through, for example, economic incentives for producers or green procurement and focus on circularity in the Ecodesign Directive. But the wording is often vague such as “promoting circular flows”. There is therefore an extensive work to be done to make the measures concrete. Consequently, the EU package is neither sufficient nor concrete enough, because it is expected that the challenges will be fully resolved and flows influenced.
However, it should be noted that such new legislation, as suggested above, may have effects that potentially generate new challenges. In order to make sharp recommendations, measures should be defined and analysed in a more comprehensive context. Generally this is an indicative scenario analysis, conducted within the framework of this preliminary study. The result shows a first indication of the challenges that are addressed by different legislation and measures. For a more comprehensive analysis, detailed studies of each individual challenge are required, with a greater detail level.
Furthermore, the scenario analysis shows that policies can have an impact and lead to improved resource efficiency and improved competitiveness for companies starting early. For example, demands for design of products to make them better suitable for circular systems, such as reuse, remanufacturing, repair and recycling, will give an advantage for companies doing that and at the same time will improve the possibilities to change to a more circular system. Promoting products having a long life can be done through demands for longer warranty periods or similar. This will also promote companies providing “better” products from a circular point of view.
The transition to a circular economy means, among other things, that companies, society and organizations highlight business opportunities based on circular flows, rather than linear processes. In order to minimize commodity withdrawals, maintain products and materials to their highest possible usefulness and value as long as possible and minimize the generation of waste, extensive change of design, production, use and waste management is required. New strategies and policies include environmental and economic aspects as well as social, which means that tools and incentives, as well as evaluations, must be based on a holistic view overall and a systems perspective.
Cooperation within companies, along the supply chain and with other organizations, is crucial when it comes to the implementation of a circular economy. In earlier research, e.g. related to ecodesign, done by Boks et al. , it is shown that the language and communication plays a crucial role and the under-researched link between ecodesign proponents and the executors (technical experts, decision makers and marketing experts). For a successful cooperation, the target image needs to be common and clear to the collaborating actors, which is not always the case. The findings in our study show the same challenges, and thus, we think that the need for further research and development of a common language and communication between different stakeholders is essential for a successful implementation of a circular economy.
Project participants demand clear, long-term rules and goals to strive towards. Powerful instruments such as prohibition and legislation provide clarity, and powerful efforts can be made here, compared with today’s situation. However, knowledge, political courage and innovative thinking may be required on the side of the actors.
As a reflection after the project, it became apparent that participants in interviews and discussions neither lifted waste prevention activities nor the consumers preferences and lifestyle as major challenges for reaching more circular flows or resource management. Waste prevention is highly prioritized in the waste hierarchy, and the consumer should be an important player in this context. It is unclear why they did not receive more attention in the project’s discussions. This could be due to the composition of actors, the project group’s filtering or something else.
The project has a Swedish perspective, but several of the participating companies are working on a global market. National legislation must therefore be harmonized with international counterparts. How can the challenge of raising policy and regulation to an EU or even more international level be handled? There are extensive, ongoing international studies for policing and its impacts, where information can be exchanged. The current project Polcirkeln has exchanged experience with the European Commission, UN Environment Agency (UNEP) through its International Resource Panel, the World Trade Organization (WTO), as well as with several parties and organizations.
13.4 Conclusions and Recommendations
A holistic approach is needed.
To achieve a circular economy, changes are required which will have consequences for many actors and those can be enforced with the help of policies. So far, measures like prohibition of landfill and goals for recycling have moved us up the waste hierarchy. To get further, a pull from the top stairs is needed, e.g. by requiring a certain percentage of recycled materials in products, set goals in terms of life span of products or prohibit material that complicates recycling—a challenge for designers together with recyclers.
The results show that the EU package for a circular economy is ambitious but must be concretized and strengthened. Increased collaboration and a holistic approach are needed, between and within different organizations and companies, nationally and internationally, and also between authorities and political sectors. The global arena is a challenge for many companies, and policies should be raised to a sufficiently high level to have the desired effect.
Many companies have insufficient knowledge about existing and future policies and regulations for themselves and other actors in the value chain, and thus risk making mistakes.
In order to promote innovation and solutions with a holistic perspective we recommend:
184.108.40.206 Policymakers’ Recommendations
Take a holistic approach and harmonize different policies along the value chain and on different levels.
Concretize measures and targets for the upper parts of the waste ladder.
Promote a material strategy that complements the waste hierarchy.
Eliminate barriers to circular economy while taking into account other environmental and sustainability goals.
Follow up the measures taken to speed up the transition to circular flows.
- 6.Promote collaboration, since it is easy to say, hard to do. Collaboration takes time: building trust, creating a common language and enabling knowledge transfer. Policymakers can push by, for example:
Promoting collaboration with a life cycle perspective, e.g., in public procurement.
Spreading good examples.
220.127.116.11 Company Recommendations
Create routines and networks to ensure adequate knowledge of policies and regulations.
Think long term and from a life cycle perspective.
- 3.Identify the company needs to achieve more circular flows.
Communicate these along the value chain, in order to ensure that other actors can do the right things.
Broaden perspectives to find new possible collaborations.
18.104.22.168 Recommendations for Further Research
- 1.Research about how to solve technical issues, such as:
How to design products that work in circular systems.
- (b)How to gather, save and share information needed from each part along the value chain in order to promote reuse, remanufacturing, recycling, etc.
For example, monitor the chemical content in order not to put something dangerous or even forbidden on the market.
Develop indicators which can help people along the value chain (including end customers) make smart choices.
Develop new and more sophisticated methods to take care of all the rare materials in electronics.
- 2.Research about other issues, such as:
How to handle economics along the value chain, in order to make every part in the chain happy, so the chain doesn’t break.
How to develop law and ways to cooperate which work in a circular economy.
How to ensure that the circular solutions lead to “true” sustainability from a holistic point of view.
Language, definitions and communication in order to minimize barriers and promote a circular economy.
Statistics, in order to understand material flows, and possible consequences of suggested actions.
This project is done within the research program RE:Source, funded by the Swedish Energy Agency, Vinnova and Formas.
- 2.Ellen MacArthur Foundation. Towards the circular economy: economic and business rationale for an accelerated transition. 2012. www.thecirculareconomy.org.
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