Interview: Circular Developments in the Czech Republic, NL and Worldwide

1) In Prague you visited the first Czech Circular Hotspot meeting. Why are circular hotspots important?

A circular economy is a system change towards an economy that eliminates the concept of waste and keeps materials in the loop as long as possible at their highest possible value, It is another way of designing, producing, and using resources and another way of looking at and dealing with waste. It requires new collaborations within the value-chain and new collaborations between for example public partners, private actors, the knowledge community, and consumers.

No company, local government, or NGO can implement circular initiatives alone. All partners involved should be willing to participate in this transition, otherwise, the change cannot be made.

We need each other to jointly build a coalition of partners of people willing to contribute to transformative change. To be effective, such networks of partners should be orchestrated. Former Minister Professor Jacqueline Cramer (chair supervisory board HCH) calls this kind of orchestration ‘network governance’.

Circular Hotspots act as a catalyst in this process. They can link the top-down (governmental) actions and bottom-up, entrepreneurial, and societal, actions. They are trusted entities and transition brokers.

 

2) What do you think about Czech Circular Hotspot? How is it organized, and based? Do you think it will work as it should?

I think the Czech Circular Hotspot is still too modest about its capabilities!

They have a tremendous knowledge base on circular economy. They also have a very good network to start with. They managed to form “a coalition of the willing” of very relevant companies and have connections to the government. Now they must motivate and incentivize the network to collaboratively start and scale-up circular actions. That means identifying the actors and market areas with economic potential, sustainable potential, and transition readiness. It can, for example, be actions in circular construction in larger cities converting a derelict area not only into a circular building but also into a new vibrant community, it can be industrial symbioses in industrial areas or circular agro-food innovations in rural areas.

The Czech Presidency of the EU might be a momentum where even more top-down commitment can be organized.

 

3) You are the CEO of Holland Circular Hotspot, how does your hotspot work? What is your daily agenda, what do you help with, and what is the purpose of that institution?

Holland Circular Hotspot is a private-public platform that facilitates the transition to a circular economy at the international level by bringing together government authorities, knowledge institutes, and especially businesses. HCH supports knowledge exchange between The Netherlands and other countries with the aim to stimulate entrepreneurship in the field of circular economy.  In that process, we try to create win-win business opportunities for Dutch organizations and their foreign counterparts. HCH acts as a circular economy specialist and a neutral transition broker. HCH works closely with a global CE network, organizes trade missions, and workshops, and writes sector – and market opportunity reports. HCH is part of the Coordination Group of the European Circular Economy Stakeholder Platform.

We are unique or peculiar because we work at the international level. Back at home we also have another public-private program called the CE accelerator (“Versnellingshuis”) that advances the Circular Economy within the Dutch regions.

The Netherlands has the ambition to be fully circular in 2050 and half the use of non-renewable resources by 2030. Yet it makes no sense to create a circular island of the Netherland if the rest of the world does not follow a similar part. We hardly have natural resources. We are also traders, one-third of our GDP is related to export, and our economies are linked with the wider work. In a way we also need the Czech Republic to become circular for our own future.

 

4) What is the main problem with cooperation between governments, municipalities, private companies, and NGOs? Why can´t they just talk to each other and manage all the circularity issues on their own? Why do they need hotspots?

Although the Dutch government managed to set up an integrated circular economy policy, its implementation couldn’t be realized without the active support of stakeholders.

It is relatively easy to find a coalition of stakeholders willing to join forces.  In the Netherlands, we all realize that if you want to close the loop you have to collaborate. In the example of plastics: to close the loop you need to collect plastics, sort them, recycle it and apply it. If you miss one step nothing will happen. Such initiatives require action from everybody. In the example of plastics, it requires EPR regulation for plastics from the government, communication from local government to inhabitants on how to sort the waste at home, and waste managers that make the quality of recycled materials that industry can use to close the loop at high value and industry that actually redesigns products and applies the recycle.

The starting point is often a ‘coalition of the willing. This consists of the parties that agree on the fact that a system change is needed and are aware they have to work together to achieve it. The ones that spark the transition, often represent a frontrunner group.

However, the stakeholders find it hard to organize and agree on the ambition and actions needed, since they mostly have different stakes. That hampers consensus on bold steps forward. Also when their circular initiative is successful, the challenge is to scale up and mainstream the initiative. An independent third party is helpful to steer the change, ensuring that the different interests are considered, without endless negotiation.

That is where Circular Hotspots (or sometimes unique personal individuals) come into play. They bring in circular competencies, built trust, and can set a common goal. Professor Cramer for example often acted as an intermediary and could successfully steer the change process from a neutral perspective for example in the Concrete Agreement in the Netherlands. She could help align the stakeholders and accelerate the transition process. She called herself and others in a similar role a ‘transition broker’. The local or national government is also an important partner in the network. Their task is to implement the necessary policy measures.

 

Figure: Roles of transition brokers in various phases (Building a Circular Future, Ten Takeaways for Global Changemakers, Jacqueline Cramer 2022)

 

5) How far are you in this cooperation (government-municipalities-private companies-and NGOs) in Holland and how far is it in the Czech Republic? Compare, please…

The Netherlands has a long history of collaboration. In order to survive in a hostile delta environment, we had to work together to literally keep our feet dry. In a way, it is in our DNA.

In the Netherlands, the first ones to embrace a circular economy were the forward-looking multinationals and the “impatient” young entrepreneurs that wanted to change their future perspectives. When our government realized this momentum in 2016 they embraced a circular economy and put in place an ambitious circular economy objective for our country: to be fully circular in 2050. The fact that the government has put in place this circular moonshot ambition had an effect that municipalities started declaring their own circular ambitions and roadmaps. This, in turn, mobilized the family-owned companies and forward-looking SMEs in these municipalities to take the circular economy seriously.

The NL is now 24.5 % circular according to the Circular Gap Report. We might score better than other countries but we still have a long, long way to go on the road to reaching full circularity.

I have seen inspiring circular innovations in the Czech Republic on the company side and some very good city and NGO initiatives. There is a lot more circular action than people realize, but they call it differently: waste management, resource efficiency, climate adaptation, etc.

There seems to be somehow a certain shyness or modesty or lack of self-esteem?

The starting point for circular action is good but the Czech Republic needs to step up its game and circular ambition if it wants to reach the Climate Goals, keep access to critical resources for its industry or create long-term food security now that the Ukraine war created serious supply uncertainties. Next to industry also the government needs to work along with the industry and NGO initiatives and increase ambition and action.

 

6) What should we do in the Czech Republic to develop this circular cooperation? Can you give us some concrete and specific advice or steps on what to do?

Professor Cramer identified in her book How Network Governance Powers the Circular Economy (2020) 10 guiding principles to spark the transition based on her experience in the Netherlands:

Sparking the transition

Guiding principle 1: The circular initiative starts with a shared sense of urgency.

Guiding principle 2: The implementation of circular initiatives occurs in four sequential yet cyclic phases.

Guiding principle 3: Tasks to be performed for each circular initiative are roughly the same, but the focus is case-specific.

Guiding principle 4: Building a circular economy is a journey with a clear destination but no predetermined path.

Context is key

Guiding principle 5: Focus on the most promising and disrupting innovations.

Guiding principle 6: Map the key drivers and preconditions for successful implementation.

Guiding principle 7: Identify the relevant actors and assess their willingness to join forces.

Succesful implementation

Guiding principle 8: New circular business models should benefit all network partners.

Guiding principle 9: Transition brokers can accelerate circular initiatives.

Guiding principle 10: A transparent division of labor among the relevant actors is indispensable.

 

Another piece of advice is to be pragmatic like the Dutch. Learning by doing. You either win or you learn. If you wait for a perfect world, you are more than likely too late.

The mindset is important. To governments, I would say: the cost of not acting for the government will be much higher than the costs of acting today. Look at a circular economy as an economic opportunity, a business model to tackle fight societal challenges instead of looking at it as a cost,

To businesses I always say: frontrunners have the biggest market opportunity. I really believe that this century is the age of circular opportunity.

If you look at European regulation that is already underway circular economy will “soon” be a regulatory reality. If you wait till you are pushed by regulation all the best opportunities will have been claimed.

 

7) If we speak about cooperation in circularity, what do we exactly have in mind? Waste management? Recycling innovations or recycling facilities? Upcycling? Bottle deposits?

As mentioned earlier Circular Economy is another way of designing, producing, and using resources and another way of looking at and dealing with waste.

Companies often start with waste management but soon realize that alone they can only improve maybe by 5%. If they reach out to their suppliers and customers they are likely to increase the improvements significantly. However, if you only focus on waste management and resource efficiency you are likely to lose out to the competition again.

New start-ups bring in new business models, digital innovations, and platforms. Streaming services dematerialized the entertainment industry.

In a circular economy waste management and recycling is the very last step.

Companies have to be open to new collaborative innovations and move to earlier phases in the value chain.

An architect should not look at the building phase only but work with financers, real estate managers, facility managers, and waste managers on a total cost of ownership approach.

Like that, a building can be designed modular, energy positive, and set up as a temporarily material depot with a high residual value

By adopting new business models like “products-as-a-service” the ownership and the responsibility for the lifecycle stay in one hand. Manufacturers will benefit from a steady stream of revenue and get more value from the same amount of materials by potentially keeping them in circulation longer, which also saves on energy, materials, and other resources. Customers benefit because they only pay for what they need, the service. Both sides are likely to benefit from a more active, ongoing relationship.

A car only drives 6% of its time. As a car manufacturer, you can make a car more efficient or instead increase the time that a car is actually used thus focusing on the 94% that a car is not driving. New mobility-as-a-service solutions ask for collaboration between for example IT companies, public transport managers, manufacturers, service providers, and consumers.

Medical scanners and other capital-intensive goods contain scarce resources. Instead of discarding them at the end of a lifetime you can remanufacture and update them and find a new market for the scanners. This makes perfect business sense for companies like Philips Healthcare but asks for new capabilities, new contract arrangements, and exploring new market segments.

What do you see when you look at an orange peel? Do you see waste or do you a potential application of the peel as soap or perfume or fibers? To valorize orange peels waste collectors such as Renewi collaborate with Supermarkets like Jumbo that dispose of orange peels, innovators like Peelpioneers that valorize the orange peels, and retailers.

 

8) What is the ultimate target of circular hotspots? The ideal situation we want to achieve?

We want to accelerate the transition to a circular economy and get to an economy that eliminates the concept of waste and keeps materials in the loop as long as possible at their highest possible value. For me, a circular economy is also about renewable energy, preservation of biodiversity, and social inclusiveness.

The Platform for Accelerating Circular Economy (PACE) has an inspiring mission to double Global Circularity every 10 years (at the moment, the part of recycling of raw materials globally is 8.6%), and set a clear agenda for focal areas based on the best available evidence and strengthen partners’ engagement toward shared goals to accelerating the pace of circular economy next to networking and using all available knowledge to address barriers.

It would be great if the circular hotspots of the world could adopt this mission.

 

9) How did the covid situation and the Ukraine war affect the circular development? Is it slowing down or the opposite – boosting up?

The Ukraine situation is heartbreaking.

It is also another violent wake-up call after the wake-up call caused by the pandemic.

During the pandemic, we realized how dependent we were on long supply chains and that there is a need for more resilient, more local supply chains. Consumers, after long lock-down situations, have come to appreciate sustainability and healthy food. No, the Ukraine war has made the dependency on Russian gas very visible. At the same time, it also comes with the realization that the dependency on other resources like the rare metals (that we do not have in Europe) and the desperate need for our energy transition and mobility transition is even bigger.

The full extent of the interruption of food exports from Ukraine to the Czech Republic and the rest of the world still has to manifest itself. Food price increases can quickly turn political and create a need for larger food self-sufficiency. That momentum should also be used to create more restorative and circular agriculture.

Never waste a crisis. The fast and collective political European response to the Ukraine war is promising. I think that after today we will collectively look more strategically at critical resources and the crucial role of the Circular Economy.

Today Circular Economy has found a place in EU plans and some of our national plans, but unfortunately, the circular economy is often linked strongly to Climate Change. Circular Economy is more than just a tool to lower GHG emissions. It should also be seen as a transformative mechanism and key in any strategic resource plan and environmental plan.

 

The original post of Ecoista (Czech) is available here:

https://www.ecoista.cz/budte-pragmaticti-jako-nizozemci-radi-guru-obehoveho-hospodarstvi-freek-van-eijk/