EkoIQ Turkey interview with Freek van Eijk
August 06, 2019
The 5th Interaction Meeting of Turkey Materials Marketplace, the Circular Economy Platform of Turkey, was held on June 19, 2019 at the Old Büyükdere Pier with over 100 participants representing 60 different organizations. We talked to Freek van Eijk, Director of Holland Circular Hotspot, who delivered a speech titled “The Circular Economy Transformation from the Business Perspective” at the event, about this topic, the Dutch experience and possible areas of cooperation.
Interview by Nevra YARAÇ, EkoIQ
See the original publication in Turkish here: http://ekoiq.com/2019/07/31/dongusel-ekonomi-bir-sistem-inovasyonudur/
"Circular Economy is a System Innovation"
Serious efforts in the field of circular economy have been taking place in Europe for some time now. The Netherlands is one of the leading countries in this quest. Can you talk about the transition process of the system in the Netherlands from linear to circular?
We live in a quite vulnerable delta in the Netherlands. If we hadn’t done anything about it, half of our country would now be under water. Therefore, we have been working since the Middle Ages in order to preserve our delta in a habitable state. Secondly, we completed our industrialization long ago, and therefore there is a lot of environmental pressure on us. The country’s population is dense, with factories close to residential areas. We need to deal with environmental issues for 17 million people. We have 4 million cattle, 10 million pigs, 50 million chickens and their faeces, and we need to tackle that too. And since we are not a resource-rich country, it only makes sense that we adopted a circular economy approach to keep the products in the cycle.
We consider circular economy an opportunity because as an economic model it delivers significant sustainable results. Why are the Netherlands and Europe so enthusiastic about this?
Because this is also about creating jobs. We’re talking about both local and advanced technologies such as nanotechnology and robotics, unlike the case in China. It also creates jobs in repair, waste disposal and renewal. As a result, while making our country livable and giving people the inspiration to live there, we are also reviving the economy.
Our goal is to be fully circular by 2050. This is a very ambitious goal. We want to halve the use of non-renewable resources by 2030. I think that even if we don’t quite achieve these goals, we’ll get pretty close. It’s good to have a goal but you also need to set some focal points. That’s why we’ve prioritized five market segments: construction, plastics, consumer goods, agri-food and manufacturing. We have devised a transition agenda for these areas. This agenda is not imposed by the government, from the top. In cooperation with the government, we started to implement the program we created with the participation of various industries and NGOs. Not only that, but steps should also be taken on issues such as the drafting of regulations, removal of barriers and access to finance. Initially, a circular economy might mean higher prices. This is because externalities such as the impact of climate or loss of biodiversity are not factored in the price in a linear economy. Resources are cheap, labor is expensive. You can reverse this and make sure that the real environmental impact is included in the price, and keep the labor cost of repairing or renewing something low.
During the transition to a circular economy, the Netherlands drafted regulations, facilitated access to finance, which resulted in an increase in research and innovation. The biggest opportunities are international collaborations. That’s exactly what we do at Holland Circular Hotspot. Businesses play a critical role in this process as well because although the government is enthusiastic and sets the rules, at the end of the day it is the businesses that will take the risk.
What are the repercussions of a circular economy for businesses in the Netherlands? What are the advantages and disadvantages?
I believe that most companies today are aware that their current way of doing business is no longer an option. A typical multinational company goes through three years of business development, one year of permits, a couple of years of building the plant and then is in operation for 20-30 years. Looking at the future of your market in 20 to 50 years, you see that carbon prices will be much higher, and regulations will be stricter. So, you have to realize that the ones who act first are the ones that seize the best opportunities. You can increase your profit margin for a phone with the same amount of material in the product if you give those materials a second, third or fourth chance to live. Why throw away value? Value is destroyed in the linear model. The circular economy, on the other hand, is a system innovation. When you cooperate in the supply chain, the risk is lower too because you talk to and depend on one another. You use less material, less energy, less water, which all means cost reduction. Alone, you might be able to make an improvement of 3-5%, but when you work with your suppliers, your customers, you can do much more. Afterwards the real potential becomes visible. So, the journey that starts in your backyard extends to your supply chain, proceeds to optimization and cost reduction, and you end up with a new business model.
Phillips adopted a “lighting as a service” approach and saved 30% energy in a year. However, it took them seven years because it was about creating a new financial model. They needed new skills because although they were good at designing and manufacturing luminaires, they had not focused on maintaining them and their remaining useful life. They even had to redesign according to the circular economy model. In other words, this is a journey where you learn something new every moment. Waiting for it to be perfect is wrong because you’d be too late. And you shouldn’t be afraid of making mistakes because you learn the most and fastest through them, and that’s how you make improvements and start over. Many of the circular economy business models have failures in their past.
To me, the circular economy is a system change. Tasks that do not fully require a regulation can begin right away – particularly in a country like Turkey that is industrialized and has the resources and skills. In fact, circular economy is part of our life though we might not be aware of it. For instance, our grandmothers do not waste anything. However, a lot more can be done especially at the city level. New technologies such as sharing platforms can be employed to gather people around issues.
You’ve mentioned five industries you have prioritized in the Netherlands. Generally speaking, which industries transition more easily to a circular economy?
Considering the economic potential and the value potential, for instance, there is a serious debate on plastics. Several actions can be taken on that in a circular economy, however, there is still distance that we need to cover. We know that plastics cause pollution and there is a general consensus on precautions to be taken. Following the Volkswagen emissions scandal, the automotive industry understood that it could not continue with business as usual. Volkswagen lost a lot of money. All respectable automotive companies have an electrification program today and are moving at a pace that was unthinkable before the scandal. The same holds true for the baby milk scandal in China. Chinese manufacturers have lost their position in the market and have still not been able to recover. This was an opportunity for sustainable milk producers like those in the Netherlands. I think textiles are destined to be the new plastic. We know what happened in Bangladesh and the working conditions. We know about pollution, chemical use and the fact that 72% of textile products either go to landfills or are incinerated. In that sense, Turkey too is a big market.
Agri-foods are also very important. We are losing one third of the food we produce. If you can prevent these losses, you will retain value. For example, products that have reached their expiry date can no longer be sold in supermarkets. But you can sell them turning them into pasta sauce or soup.
Sustainable Development Goal (SDG) 17 emphasizes the importance of cooperation and partnerships, which are also critical for the circular economy… What’s your opinion on that?
A look at all those goals shows that the circular economy might play a significant role in at least two thirds of the 17 goals. It will probably play the biggest role for the goal on sustainable production and consumption. But since the circular economy is a system change, it requires cooperation and supply chain optimization. Is this a challenge or an opportunity? Let’s say you made some orange juice and are left with the peels. What do you see? If you regard them as waste, you’ll throw them away. However, you could also regard them as potential raw material for textiles or perfume. It’s a change of mindset. With regard to completing the cycle, the goal in the circular economy is to keep the materials in the cycle for as long as possible at the highest possible value. You also need to think about renewable energy. When you are producing, you shouldn’t rely on coal-fired power plants and should respect biodiversity. If there are inequalities in the supply chain, you can’t go on for long. This type of circular thinking and the SDGs have a lot in common. From the technology perspective, one of the circular economy models that is mentioned most often for SDGs is industrial symbiosis, i.e. the waste of one process becoming the raw material of another. When you look at Asia and Africa, you can see people on the streets of Vietnam or Nigeria fixing things because they don’t have the purchasing power to get a new car or engine parts but they also want functionality. That’s why they work under horrendous conditions, and social equality is out of the question. However, this too is a kind of circular economy. Re-manufacturing, repair, recycling are some of the most common circular economy models for SDGs in developing countries. When we look at cities, we can add sharing to that. Cars spend only 6% of their life being driven. So, if we focus on the remaining 94%, the importance of sharing platforms becomes evident.
What are the possible partnerships between Turkish and Dutch businesses?
I think there are many opportunities because both countries are active in trade, are open to the international arena and are in the top 20 in terms of GDP. Our economies could feed each other. We can learn a lot from you particularly in textiles. We work hard on textiles and the international value chain in the Netherlands, but we are not a major textile manufacturer. We’re working more on recycling technologies. We are countries with dense populations. We started early on in construction, which can be inspiring for Turkey.
We also had kind of an early start in waste management but we made some mistakes. We built too many waste incineration plants. But we can do separation at the source, collection and reuse. Recyclable waste can be sent to those plants as well. We can also learn a lot from each other in terms of agri-food.
Istanbul is a blue city, but it cannot be called green and is expanding day by day. If you want to feed a city of 16 million, you also need to do urban agriculture. So, you have to create areas that will connect people to food.
What could you suggest to governments, businesses that are in the transition process to a circular economy? How can mindsets be changed?
An African proverb says, “If you want to go fast, go alone. If you want to go far, go together.” The circular economy is a system innovation and you can’t do it alone, you have to be open. You have to cooperate in the value chain. The other point is not to wait until everything is perfect. You have to learn by doing, learn fast and think fast. But it all starts with the mindset. You need to destroy the linear economy and build the circular in its stead, and while doing that, you shouldn’t be naive. There will be people who resist the change, give them time to adjust themselves to the new situation. Work with them, not against them. Head to wherever there is a momentum. Like automotive, plastics, textiles or giving a new life to empty buildings… First you start with resource savings that will reduce your costs. You use less water, energy and material, but as you move on with an open mind, you realize that you can do much more than that through cooperation. You also create social benefits. As a result, you rediscover your business model and value generation.
Social innovation has also become very important recently in new business models…
We could say 80% is social, 10% is technological innovation. This is critical. The skills of people you recruit becomes important as well in this case. Particularly women employees because they are better at social innovation than men. When I go to conferences on the circular economy, I see that there is an equal number of women and men. Or there are organizations whose teams are made up entirely of women. After all, it’s a system change. Naturally, you are going to use technology to follow the market well. But ultimately it all boils down to collaborating in the value chain.
SKD Turkey and the Circular Economy
At SKD (Sustainable Development Association) Turkey, we are aware of the environmental and economic opportunities a transition to a circular economy will provide. It is important for us that these opportunities are seized by businesses and value is created from waste. Therefore, one of the five focus areas we have identified is “Sustainable Industry and a Circular Economy”.
Last year we started to cooperate with the Dutch Consulate in order to improve the technical capacity of our members on the circular economy. With the support of the Dutch Consulate, we organized a workshop titled “Introduction to Circular Design in Businesses” with the participation of trainers from CIRCO, one of the most important circular economy organizations in the Netherlands. And in May 2019, we conducted Turkey’s first and only certificate training on the circular economy with CIRCO trainers and 20 attendants from 10 of our members. In the coming period we will repeat the three-day Circular Business Design trainings.
The Netherlands is a country that has been making very important efforts on the circular economy and has laid out its state policy and goals. In this context, we would like to express our gratitude to the Consul General of the Netherlands, Bart van Bolhuis and Holland Circular Hotspot Director Freek van Eijk for being kind enough to accept our invitation and participate in the 5th Interaction Meeting of Turkey Materials Marketplace (TMM), Turkey’s circular economy platform. We believe their participation and the information they have provided will be instrumental in further enhancing our cooperation.
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