CTalks: Holland Circular Hotspot - Freek van Eijk (Part 1)
We are happy to start a new series of articles which are dedicated to interviews from entrepreneurs, subject matter experts, researchers, and directors of prominent organizations in the field of Circular Economy: "CTalks - C: Circular, Chats, Conversations and more"!
We hereby present you the first interview on our series, with Freek van Eijk, from the Foundation Holland Circular Hotspot. Would you like to know how the Dutch enterprises are moving towards circularity and adopting circular economy (CE) in their business models and processes? Here is the part-1 of our interview session with him!
Let’s begin with getting to know you better, Freek. Please tell us a little about yourself, the organization you’re working with and your involvement.
My name is Freek van Eijk. Since June 2018 I have had the honor to lead the Foundation Holland Circular Hotspot. We present the Netherlands internationally as a Living Lab and a Circular Hotspot. The Dutch are collaborative by nature and pioneer (circular) solutions for global challenges.
At Holland Circular Hotspot we believe that creating a circular economy calls for a profound transformation in the way we work, produce, design, teach, invest, and buy. We bring together the best circular practices and lessons learnt from business, knowledge institutes and government. We help to create new coalitions aimed at circular entrepreneurship and adapted to the local challenges. We are successful if we can inspire other countries to embrace circular economy and create business opportunities for Dutch companies and institutes that have a measurable impact on the societal goals.
2. Why do you think CE is central to the way in which we have to redesign our ways for the future?
We, as a planet are facing some major challenges today. Climate change, loss of biodiversity, “the plastic soup” and providing access to resources for our industries are just a few of them. Is it going to get better someday? The ‘OECD Global Material Resources Outlook to 2060’ projects a doubling of global primary materials use between today and 2060. The Ellen Mac Arthur Foundation stated that in 2050 there might be more plastic in our oceans than fish. Seawater rise will impact the deltas of the world (and 80% of global GDP takes place in delta’s!). 1/3 of the food we produce is wasted. To feed the world in 2050 we have to double food production.
Business as usual is not an option!
A transition to a Circular Economy (CE) definitely makes more sense in these circumstances. A CE is often explained as a way to keep resources in circulation much longer and at the highest possible value. For me and many of the CE practitioners, it is not only about keeping materials in the loop but also also about renewable energy, preservation of biodiversity, social inclusiveness and new coalitions. It is another way of designing, producing, consuming and dealing with waste. It is a new economic model, a system change with a fantastic spin-off to sustainability.
Adopting circular economy principles would bring considerable benefits to the EU, such as:
• The overall benefits amount € 1.8 trillion by 2030, double the benefits of the current development path;
• The average disposable income for EU households would increase by €3,000, or 11% higher than the business as usual development path;
• GDP would increase as much as by 11% in 2030 versus today, whereas the current development path shows 4% growth;
• Carbon dioxide emissions would be reduced by 48% in 2030, relative to today’s levels or 83% by 2050; and
• For primary materials from automotive and construction sectors, real estate land, synthetic fertilizers, pesticides, agricultural water, fuels, and non-renewable electricity, material consumption could go down 32% by 2030 and 53% by 2050, compared with today.
3. What do you think that businesses can do to be drivers of the circular economy/closed loop economy?
In a transition to a circular economy everyone has a different role to play and we need everybody on board. The government should set the ambition, set boundary conditions and allow for experimentation. Knowledge institutes develop new insights, enable valorisation of their knowledge and create awareness. Entrepreneurs show guts, take risks, accelerate and are the main actors of a scale-up.
When I see a company that is going circular, I see a company that is working on its long-term continuity and strategy in times that business as usual no longer seem to be an option. Turning to a CE model is a travel that might start with a focus on waste and resource but will most likely evolve into a fundamentally different business approach like introducing products as a service or starting a sharing platform.
Typically, you start in the backyard of your company (“what waste can you prevent and reuse, how much lifetime can you extend, can you turn to circular or renewable input”). Soon companies realise that they have to extend this focus to their suppliers and customers and even the whole value-chain or their industrial park in order to be successful.
Because CE clashes with our present linear economic model, it is about showing leadership, persistence and commitment. But do remember: first movers often have the biggest potential market share. A company should walk the talk and give the example in all its actions, for example in their procurement. It certainly helps to set targets, calculate impact in terms of euro’s carbon or jobs, measure progress and report on it.
4. What are some of the challenges that we could face in implementing a switch to the closed loop economy model?
Some years ago I helped our Ministry of Environment to make an inventory of barriers to a CE. There are many barriers:
Think about institutional barriers. How can we quantify externalities (in €), for example how can we get a sufficiently high CO2 price? This is something we have to work on at an international level and that takes time.
Culture, behavior and awareness are probably the main barriers! Circular Economy has not yet reached the mindset of the people in the living room (contrary to plastics!). Educating the leaders of tomorrow and multi stakeholder communication is key! I am serious when I say that a CE transition is 20% about technical innovation and 80% about social innovation.
People often mention that the existing regulation is an obstacle. It is true that we are looking with old spectacles (based on lessons learned in the past in the linear economy) to new circular initiatives. We have to look closer at the goals behind the regulation in order to prevent regulation to become a barrier. The dynamics are interesting: working at UN level might take 10 years, working at EU level 5 years and working at national regulation could take between 1-3 years. Getting coalitions together at the local level might happen within 3 months!
The Dutch work with so-called Green Deals. A green deal is not legally binding: it is about working with coalitions of the willing to get things done.
Having said these words about regulation I do think that the best entrepreneurs do not wait for the government to make regulation to enable their business model. Did Elon Musk wait for the American president to make regulation for electric vehicles? Real entrepreneurs always find their way to make their models work and regulation is likely to follow the footsteps of these innovative leaders.
Access to finance used to be and still is a barrier for many entrepreneurs. Finance makes the world go round, but especially CE business models with their additional non-financial objectives aimed at societal value, do not fit in the classic tick boxes of financiers.
Knowledge, skills, capabilities are also key. We need to fill the gaps. The speed of innovation is astonishing, and we have to stay tuned. It is however not only about robotics, blockchain and nanotechnology. We have to rediscover lost skill-sets needed for CE activities like dismantling and re-manufacturing too. Also, social skills are increasingly important in a CE: it is about getting parties together and making them collaborate.
Value Hill Illustration
5. Thank you for stressing on social behavioral change along with technology and business. Now, how can the government stimulate circular innovation?
It helps if the (national and local) government sets an ambitious goal that fits with the local dynamics (energy neutral areas, zero emission inner city centers, circular or bio based plastic valley, zero waste factories). At local level it is important to make an inventory of best practices and give a platform to front runners to inspire others. You can help circular start-up to grow and get a market by circular public procurement (mind you, in the EU that represents roughly 20% of GDP!). The local government can be the neutral facilitator that brings actors together for example in industrial areas where waste for one can be a resource to another.
Give room for experimentation and create additional dynamics by letting start-up temporarily use empty buildings. A bottom-up movement with a local hero can be very powerful.
Any government should make CE a cross divisional activity: it is about economy, sustainability, innovation and more. It is also essential that we include circular thinking in educations: our kids are the consumers and the leaders of tomorrow!
The Part 2 of the interview will be published on 10.04.2019.
Next event in April: Click here
Follow them on social media and professional network:
LinkedIn: @Holland Circular Hotspot and @Freek van Eijk
Twitter: @circularhotspot
Facebook: @Holland Circular Hotspot
