Finland seeks to become circular economy leader

Finland seeks to become circular economy leader

Finland has set a goal to make the country a global circular economy leader by 2025. The Finnish Government has prioritised investments promoting the circular economy among its new spearhead projects at the time the European Union is preparing to adopt an ambitious Circular Economy Strategy.

The concept of circular economy is based on the idea that all materials are fully utilised and recycled minimising waste. In 2016 Finland adopted the world’s first roadmap to a circular economy. The roadmap outlines the steps to sustainable success creating sustainable well-being and a successful carbon-neutral circular economy over the next years, and Finland draws on the accumulated experience of several decades on how innovative technologies can be deployed.

The national circular economy roadmap was drafted under the direction of the Finnish Innovation Fund, Sitra in co- operation with the Ministry of the Environment, the Ministry of Agriculture and Forestry, the Ministry of Economic Affairs and Employment, the business sector and other key stakeholders. The first circular economy solutions are based on areas where Finland is traditionally strong – such as the use of forests, food production, industry, transport and administration – thus making it possible to offer tens of thousands of new jobs and generating billions of euros in added value each year. Sitra, believes that Finland has a real opportunity to create sustainable well-being and a successful carbon-neutral circular economy over the next 5 to 10 years. Maximising conservation of materials and keeping them in circulation for as long as possible minimises the volume of emissions. The roadmap shows how to make the transition to a circular economy.

According to the roadmap the change will require co-operation across sectoral and industrial boundaries. “The effectiveness of new solutions ultimately stems from the fact that they can be expanded and duplicated both elsewhere in Finland and around the world,” says Sitra Director Mari Pantsar. She stresses that the work is just beginning. “Systematic change will require more fresh and even radical ideas in the future.”

According to Finland’s Minister for Environment, Kimmo Tiilikainen, the circular economy roadmap brings together a large number of existing pilots. Examples include:

  • an initiative to recover waste heat
  • Central Finland’s investment in the use of biogas for transport
  • Helsinki Region’s plans to switch to high-blend biofuels
  • a joint VTT and Aalto University research project on new cellulose-based materials
  • plans in the Lappeenranta region to switch from using imported fossil fuels to domestic renewable energy for its transport needs
  • the City of Turku plans to pilot a zero-waste region
  • a joint forestry sector and Tekes project for the utilisation of forestry by-products
  • a Finnish Technology Industries and University of Jyväskylä project to improve the efficiency of mobile phone and tablet.

The potential gains from conducting business in a circular manner can be considerable. According to Sitra estimates, the circular economy would generate 2 to 3 billion euros in added value each year by 2030. The Club of Rome estimates that over 75,000 new jobs would be created. A report compiled by the Ellen MacArthur Foundation and McKinsey estimates that the annual potential of a circular economy in Europe is estimated to be 1.8 trillion euros a year already by 2030. Furthermore, the European Commission has adopted ambitious objectives in order to assist European companies and consumers in transitioning to a circular economy with resources are utilised in a more effective way.

Going global

One of the focus areas in Finland’s circular economy roadmap is to become a global host nation for the circular economy. In June 2017, Sitra held the first World Circular Economy Forum (WCEF) in Helsinki. The WCEF brings together more than 1,000 business leaders, policymakers and experts to present the world’s most advanced circular economy solutions. The 2nd World Circular Economy Forum took place in Yokohama, Japan from 22-24 October this year. It was hosted by Sitra and Japan’s Ministry of the Environment and co-organized with selected international partners.

The President of Sitra, Mikko Kosonen, opened the event saying: “We need to have something to strive towards and not let our fears of the unknown and of change limit us and our actions.” Finland’s Minister of the Environment Kimmo Tiilikainen stressed that Finland’s EU- and Japan’s G20-presidency in 2019 will be a fantastic opportunity to promote the solutions of circular economy and to fight environmental collapse and climate change. The Finnish and Japanese Ministers also signed the Memorandum of Environmental Cooperation, which will paves the way for more intensive cooperation between universities, research institutions and companies. Jyrki Katainen, the Finnish Vice-President of the European Commission highlighted the importance of cooperation, saying “The circular economy is the industrial leg of fighting climate change,” he stated. “The public sector does not tackle this by itself; we need co-operation with the private sector.” The WCEF2019 will take place in Helsinki, Finland from 3-5 June 2019.

Finnish businesses adapt circular approach

A considerable number of Finnish business sectors have adopted circular approaches in their businesses. Business Finland took a Finnish delegation of companies and research organisations to the event and hosted a stand at the expo area showcasing Finnish cutting-edge circular economy solutions. These solutions can be found in several different business areas; such as transport services and shared use, the sharing economy, new bio products, technical cycles and recycling, and the creation of added value from waste.

“Large Finnish companies have already embraced the change they will be required to make in order to take on the new global challenges they will face,” says Sitra Senior Lead Kari Herlevi. Konecranes is noted as one of the most interested companies in circular economy in Finland. The company specialises in mechanical engineering, manufacture and maintenance of cranes and lifting equipment with net sales over 50 billion euros. Konecranes has been accepted as a tier 1 company in the all Nordic CIRCit research project, which provides scientific support and develops tools and methods to support Nordic companies in their transition towards circularity. Konecranes and the research team will investigate and conceptualise circular business models and new circular products, especially within its service business. ”We see great potential in developing our operations from a circular economy perspective,” says Nathalie Clément, Director, Corporate Responsibility at Konecranes. Our aim is to inspire the market and our customers by offering innovative, eco-efficient solutions. That is why we are participating in CIRCit: to co-create concrete tools to support our processes and seek new solutions and business models based on customer needs and future trends that support circular economy.

Besides established companies such Konecranes or Lindström, which have developed sections in their product offerings that are based on circular economy there are a great number of startups on Sitra’s list. In contrast to established companies, start-ups’ entire business concept can be built on solutions to fix very specific problems with a sustainability mindset. Out 98 names on a list of interesting circular economy companies, over 30% are startups in different industries challenging the traditional ways business is done. Some interesting examples from four different industry branches include;

  • Fashion Industry

Zadaa: This marketplace app allows you to buy and sell second-hand clothes from users that share your measurements. A user can simply register on Zadaa, fill out their measure and start browsing clothes.

The Infinited Fiber Company, which has developed a process technology that can turn textile waste into new fibers. However, their promise is that the process can be done an infinite amount of times without decreasing the quality of the fiber. This could be a game changer in the fast fashion industry.

  • Packaging Industry

Sulapac: By utilising renewable and sustainable raw materials, Sulapac is able to produce fully biodegradable packaging material. They use wood from sustainably managed Nordic forests. In addition it has a low carbon footprint and can be processed the same way as plastic.

RePack: RePack offers reusable packaging for online shopping, made of recycled polypropene that protects the goods better than any other single-use packaging in the market.

  • Sharing Economy

Rent-a-Park: Parking spot owners have the possibility to list their parking spots for other people to rent them. This enables to book available parking spaces even before leaving home, helping to eliminate circling around for parking.

  • Food Industry

Verso Food produces vegetarian foods from Finnish fava beans, a sustainable alternative to soy and a great protein and fiber source.

Gold & Green developed the perfect protein choice for both vegetarians and “flexitarians” made out of Nordic oat and bean.

Battery recycling at forefront

At the beginning of 2018 Business Finland launched a two-year Batteries from Finland activation programme, aiming to bring Finland into the international battery market by improving the Finnish knowledge bases on batteries whereby attracting leading battery manufacturers to invest in Finnish production; and support the development of new battery- related business concepts and Finnish battery recycling solutions.

Inspired by Finnish battery recycling research, the European Commission has reached out to Finland to coordinate research into recycling in Europe’s battery industry. The project, which will be led by mining industry company Outotec and Aalto University’s Department of Chemical and Metallurgical Engineering with strong support from Business Finland, aims to place Finnish battery recycling at the forefront of the global circular economy.

Due to the rising use across the EU of electric cars and other electrification, batteries are in increasing demand – by 2020 Europe’s battery market will be worth an estimated €250 billion – and by extension, environmentally sound battery disposal is becoming more of a priority. The European Commission’s Strategic Action Plan on Batteries lays out a comprehensive array of concrete measures which will ensure sustainable, circular Finnish battery recycling practices at every stage of the battery value chain.

Ilkka Kojo, Director of Environment and Sustainability at Outotec, said: “The objective is to return, in an economically viable way, as big a proportion as possible of the battery materials to battery production so that Finnish battery recycling is connected with primary production. In addition, the goal is to define long-term visions, a strategic research agenda and operational programs.”

Next government needs more perseverant approach

This week on the 6th of November Business Finland announced that it has launched the Bio and Circular Finland program. Circular economics is an opportunity for traditionally important industries in Finland but also opens up great opportunities for a new kind of business, states a Business Finland press release. The program lasts four years and has a budget of EUR 300 million. Of this, Business Finland’s innovation funding accounts for EUR 150 million. In addition, the program offers internationalisation services and renews ecosystems, which also attracts foreign experts, businesses and investors to Finland. ”Know-how of bioeconomy and digitalisation enhances the competitiveness of Finnish companies in circular economy. Our strength is in combining of know-how and business models that cross industry boundaries. Versatile, internationally competitive innovations in the circular economy gives Finland’s economy grounds for growth and renewal,” believes Business Finland Director for Bio and Circulatory Economics.

The parliamentary elections next spring will bring Finland a new government. A year after the roadmap, the government issued a program of measures to support sustainable and innovative public procurement, experimenting and testing platforms as well as new product and service innovations and investments. The roadmap upgrade is about to begin and is due to be released in January to serve as a feed for the future government’s program. The government is to use it to pick up administrative or legislative measures, explains Mari Pantsar, Sitra’s director of the carbon-neutral circular economy team. According to Pantsar, the current government has mainly driven the short-term bio-economy priorities. ”We should look at high value-added longevity products. Circular economics is a new paradigm in economic thinking whereas bio-economy is based on raw materials.”

Comment

The world has a demand for circular economy expertise, as diminishing natural resources, overcrowding and overconsumption cause ever-increasing environmental problems. The experts estimate that within a decade the circular economy will become mainstream. Economies that invest ahead of the curve position themselves to lead a high-growth industry. At this year’s Independence Day Reception at the Presidential Palace in December, President Niinistö’s spouse, Mrs. Jenni Haukio, will be wearing a dress made out of birch fibre by Finnish university students. That symbolises quite well where Finland is heading.