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Transitioning from a linear economy to a circular economy will open up tremendous opportunities. To get there, a circular mindset is needed every step of the way – from product design to waste management.
Only 8 per cent of the global economy is circular. Over 90 per cent of the world’s resources are used in a single product before being discarded. This can’t go on.
Cathrine Barth is the co-founder of and head of strategy at Circular Norway. The organisation is one of Norway’s leading drivers for the transition to the circular economy, whose aim is to slash global resource use by keeping materials in a perpetual loop of use and reuse. In practice this will involve entirely new thinking when it comes to product design, production methods, material management and waste management.
“There are many obstacles in the path to the circular economy. We lack a comprehensive, detailed overview over material streams and companies are locked into linear production patterns. Companies will have to work across sectors much more to ensure that all resources are exploited to the fullest extent,” says Barth.
These are the problems Circular Norway is addressing. The organisation performs circularity analysis and provides advice for companies, collaborates with the authorities and industrial clusters to create circular regions, and works closely on policy-related decision-making processes to pave the way for the circular economy.
Many people think that the circular economy is all about recycling and waste management. However, according to Barth, we should begin at the other end.
“It’s not about getting better at sorting waste, but about thinking of how to build products. Some problems are as simple as plastic and metal being glued together in a product, making repair difficult.” In the circular economy, products are manufactured to last as long as possible, and to preferably have properties that will allow the materials to be used in new products once the initial product lifetime has expired.
“It is difficult to introduce the circular economy into an existing value chain in large industries and companies – it’s almost like asking them to cannibalise themselves.”
In addition, companies often have a technical debt that makes it costly to go circular. In other words, they have invested in linear technologies, production methods and business models and therefore the cost of restructuring is high.
“We therefore see that startups are much better at circular thinking – they don’t have to restructure anything, they can just start from scratch. It’s much easier for a startup to say, ‘We’re going to help the world to cut food waste’ or ‘We’re going to make it easier to reuse clothing’,” explains Barth.
This does not mean that it is impossible for companies to introduce circular operations, but it is easier for some than for others.
“Together with Deloitte we mapped the circular potential of various companies and industries in Norway. We found that family-owned firms are the quickest to implement circular economy because the members of the board have a more long-term perspective. They want the next generation to take over the company, so they view staying linear as a risk in the long term.”
Norway has excellent natural advantages for a circular economy. The country runs on nearly 100 per cent renewable energy that does not produce polluting emissions or other undesirable waste.
Barth also emphasises that the structure of the Norwegian business sector is well suited for circular collaboration. For example, there are many concentrated industrial clusters with tremendous expertise in Norway. Add to this very little hierarchy, a high level of trust and good social equality, and there is fertile ground for innovative collaboration across companies and industries.
“We are a small society, where cross-connections may be made quickly. Leaders and engineers can easily meet in formal and informal arenas. They can, for example, run into each other on the sideline at a football match, where they can share knowledge and discover areas where they can collaborate.”
Barth points out several examples of creative cross-connections in Norwegian industry.
“Look at Elkem, a world-leading producer of silicon materials for solar panels. The problem with silicon production is that it creates hazardous dust which is costly to treat. But someone came up with the idea of using this dust in compost. This has resulted in Elkem earning over NOK 1 billion [roughly USD 190 million] on football grass,” she says.
She also draws attention to many positive circular trends in the aquaculture industry. “Actors in the aquaculture industry have discovered that they can extract carbon emissions and use them to cultivate algae, which in turn can become a new ingredient in salmon feed. If Norway can make the move to using algae in food production, we can stop importing soy for feed, which may be cultivated at the expense of the rainforest.”
Moreover, Barth sees how Norwegian culture can make Norwegians particularly receptive to circular thinking.
“I believe in the importance of Norwegians’ contact with nature. We have long traditions in agriculture, catching and exploiting natural resources. In addition, our economy has always been closely tied to our ecology, so we already have the right mindset.”
Norway has successfully implemented policy, incentive schemes and public sector funding schemes to create markets for sustainable technology. These instruments have helped to make Norway the country with the highest penetration of electric vehicles, and are advancing the electrification of maritime transport and the greening of the construction industry. But when it comes to the circular economy, the Norwegian authorities have to think differently, Barth stresses.
“The business support system is very sector-based. This can be a disadvantage because the circular economy requires collaboration across sectors. Obtaining financial support for circular, cross-sectoral projects requires the involvement of many ministries and agencies, which consumes substantial time and resources,” she says.
Although there is a long way to go to achieving a fully circular economy, where nothing is thrown away and every single resource is exploited to the fullest extent, Barth believes that we will make it in the end.
“It’s all about finding solutions that can be commercialised, and there are already many good examples – not just in Norway. I believe Norwegian companies are well equipped to devise novel, attractive and market-oriented solutions that will promoting sharing, exchange, and return and reuse of materials,” she concludes.