Circular economy opportunities in the U.S.

The U.S. is catching up on the race to meet the carbon neutrality goal set out in the Paris Climate Agreement. It has made an ambitious commitment to reduce its emissions through a variety of measures, including a transition to a circular economy. As the world’s largest economy striving for a sustainable economy, a collaboration between the U.S. and the Netherlands seems promising.

Are you thinking of doing business in the U.S.? Get an overview of facts and figures, the political landscape, selected focus areas and relevant upcoming events and networks. You can also download the printable and compact 2-pager below!

An overview of the most important information for business in The U.S.

Economic indicators

  • Surface area: 9,831,510 km²
  • Population (2020): 329.8 million
  • Nominal GDP & Ranking (2020): $20,893.8 billion; #1
  • Imports from the NL (2021): € 35,105 million
  • Economic growth (2021): 5,7%
  • Purchasing Power: $63,358
  • Ease of doing business rank (2020): 6
  • Corruption perception index score:  67/100
  • Unemployment rate (2021): 3,7%
  • Currency: U.S. dollar
  • Time difference NL: 6 hours (EST)

Circular economy indicators

  • The recycling rate of municipal solid waste (2021):  32.1%, 94 million tons
  • Renewable energy sources (2021): 12.4% of total U.S. primary energy consumption; 19.8% of total utility-scale electricity generation
  • Global innovation index (2022): 2/ 81

"In the United States, we recognize a couple of opportunities in B2B and G2G, particularly in the built environment, plastics, batteries and textiles."

Embassy of the Kingdom of the Netherlands in the U.S.
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Policy landscape

Climate change is among the Biden administration’s top priorities, making the transition to a more sustainable economy inevitable. The federal government aims to be carbon-neutral by 2050, aiming for a 65% reduction in greenhouse gas emissions by 2030. In 2035, all new vehicles are expected to be electric. To achieve the goals, the administration has viewed the circular economy as key, as reflected in the 2021 Executive Order on Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability. In the order, Biden directed each agency to minimize waste, manage and prevent waste, support markets for recycled products, and promote the transition to a circular economy.

Furthermore, the House of Representatives passed the Inflation Reduction Act of 2022, which earmarks $369 billion to address the climate crisis by providing incentives for clean energy development. Up to $1.5 billion was allocated to promote technologies that reduce greenhouse gasses and increase the efficiency of industrial process heating, materials production (e.g., metals, cement, plastics, and chemicals), and water treatment processes, among others.

On the State level, in 2022, the State of California signed a Memorandum of Understanding with the Netherlands, reconfirming the collaboration on sustainable mobility, circular economy, climate change and resiliency started in 2019. The PIB Circular Neighbourhoods California-Netherlands provides follow-up by offering comprehensive solutions for issues such as circular and green design, circular and sustainable building methods, digital twins, retrofitting, and reuse of materials and water.

Although the circular economy has been recognised as a strategy for achieving sustainability goals, it is often referred to along with other terms. Several U.S.-based organisations often refer to environmental, social, and governance (ESG), C02 reduction, carbon neutrality, or regenerative cities in their sustainability plans. The circular economy is primarily associated with waste management and recycling, with pioneers in the field including Calrecycle and Stopwaste.

Policies relevant to Circular Economy

Under the law, the Environmental Protection Agency (EPA) is developing three new waste prevention, reuse, and recycling programs: Solid Waste Infrastructure for Recycling Grant Program; Recycling Education and Outreach Grant Program; Battery Collection Best Practices and Voluntary Battery Labeling Guidelines.

The strategy aims to improve and advance the national recycling system for municipal solid waste (MSW). The strategy is consistent with and supports the implementation of the National Recycling Goal to increase the recycling rate to 50% by 2030.

It is the most comprehensive law ever passed by Congress to address plastic problems. The law mandates EPA to work with key partners to identify innovative uses for plastic waste, recommendations to overcome recycling barriers, incentives to create new end-use markets for recycled plastics, and ways to minimize new plastic waste.

Battery

Large-format lithium-ion (LiB) batteries are an essential component of a carbon-free energy transition in the U.S. and around the world. In the U.S. alone, stationary battery energy storage (BES) is expected to increase from 523 megawatts annually to 7.3 gigawatts in 2025, and there are expected to be 46 million electric vehicles (EVs) on U.S. roads by 2035.

As BES capacity in the U.S. increases, so will the amount of LiBs consumed. The volume of LiBs that have reached the end of their utility for EV applications is estimated at two million units per year by 2040.

To respond to this challenge, under the Bipartisan Infrastructure Law, EPA is developing best practices for battery recycling and labeling guidelines to be completed by September 30, 2026. The best practices are to be implemented by the state, tribal, and local governments, including U.S. territories and the District of Columbia that are technically and economically feasible to carry out by battery collection and recycling programs. Meanwhile, the Guidelines aim to improve battery collection and reduce battery waste.

Currently, North Carolina and California are the only states in the U.S. with policies that directly address reuse and End of Life (EoL) management options for LiBs used in mobile and stationary BES systems.

Given the above, closing the loop for LiB at the end of life requires close collaboration. There are many opportunities for cooperation between the Netherlands and the U.S., particularly with regard to knowledge transfer in the collection of battery collection policies. There is also the opportunity to provide technologies for battery reuse, recycling, and repurposing.

Plastics

Currently, there is no legislation on single-use plastic at the federal level. The Break Free From Plastic Pollution Act was originally introduced in 2020. However, as of March 2021, the bill was still before the Senate for consideration. EPA is currently developing action plans and strategies for electronics, plastics, food loss, waste, and organics.

Regardless, some states have taken significant steps to reduce plastic waste. Eight states have banned single-use plastic bags: California, Delaware, Connecticut, Maine, Hawaii, Oregon, New York and Vermont.

In addition to the ban, some states have also implemented extended producer responsibility (EPR). In California, the Plastic Pollution Reduction & Recycling Act (SB 54) transferred the cost of recycling infrastructure, recycling facilities, and collection and sorting equipment from taxpayers to packaging manufacturers. Maine, Oregon, and Colorado have also enacted EPR laws for plastic packaging.

Besides the policy on the government level, there is a notable initiative called U.S. Plastic Pact, which aims to redesign plastics to ensure plastic items are easier to recycle, re-use or to compost. The pact brings together local governments from Arizona to Texas to California, NGOs, the U.S. Composting Council, and companies. In light of that, Dutch companies have the opportunity to offer solutions, especially in terms of recycling, upcycling plastic waste and offering bio-based packaging solutions.

Built Environment

There are several challenges to making circular construction and buildings a reality in the U.S. They range from costs to the existing regulations and codes that hinder the reuse of building materials to risk aversion among stakeholders in the sector.

Notwithstanding, several organisations have initiated the transition to circular buildings by providing measurable achievement and independent ratings for building design & construction and health & well-being. Some well-known examples are LEED, WELL and Green Globes.

The system has encouraged stakeholders to achieve good ratings. In Seattle, all city-owned properties are required to meet the LEED Gold Standard. In California and New York State, the number of buildings with LEED are increasing. Some cities are also making ongoing efforts to accelerate circular building. For example, the City of Los Angeles has been actively seeking to engage cities worldwide in developing smart building strategies.

Sports facilities are also expected to focus more on circularity. What began as an effort to cut costs is now increasingly influenced by the revenue opportunities created by the environmental and social responsibility expectations of corporate partners and fans.

There are many opportunities for Dutch companies. For example, in the field of circular design, bio-based materials and solutions to re-use construction or demolition waste. There is also a strong need for technologies that contribute energy efficiency and water conservation and re-use.