Meet the Actors: Circular economy enablers in the Mediterranean
Business models in a circular economy: challenges and enabling factors
Why does a new economic system need new business models?
One of the main challenges in countries of the Mediterranean Basin is reaching higher levels of resource efficiency and sustainable waste management. This challenge is an opportunity for green entrepreneurs who like to apply circular economy business models. But what are the business opportunities and models exactly? For such models to flourish, business ecosystem should be favourable. But, which main factors such as infrastructure for waste collection, financing models, supporting policies should be addressed in the business ecosystem? What are the issues common in the North and South and how do they differ from each other?
What did we aim at?
The objective of this session was to provide an overview of business models and initiatives driving the Circular Economy in the North and South and to identify priority factors in the business ecosystem that all actors should be addressing.
Find out the business models of the circular economy, challenges faced and the enabling factors
The panel was moderated by Burcu Tunçer, Team Leader at SwitchMed and Lara Listens. The panellists were:
- Key note speaker: M. Sven Herrmann, Business Research Analyst, Ellen MacArthur Foundation.
- Ms. Pilar Chiva, Director of the Prevention and Fostering Recycling Area, Waste Agency of Catalonia
- M. Jean-Jacques Dohogne,Circular Europe Network, member of Association of Cities & Regions for Recycling and Sustainable Resource Management (ACR+)
- M. Ignasi Cubiñá, Director and Partner, Ecointelligent Growth
- M. Nicola Cerantola, Senior Expert in Sustainable Design & Circular Economy, Ecologing
- M. Alfredo Balmaceda, Director, Zicla
- Ms. Sylvia Calvo, Associació de Moda sostenible de Barcelona
- M. Ferda Ulutaş, Turkish Technology Development Foundation (TTGV)
- Ms. Ines TEMIMI, Collectun 3D
What business models take part of the circular economy vision?
M. Herrman started the session framing circular economy in general and types of circular economy business models found especially in the North as well as requirements for a favourable circular economy business ecosystem.
Next, a first group of speakers explained the story behind their business models and the challenges and ‘asks’ from ecosystem supporting agents:
Alfredo Balmaceda, Zicla - reusing of waste:
They began 10 years ago with a different idea, to centralise waste from everywhere and put it in the market. Nowadays the business has evolved and they contact businesses to take care of their waste and introducing it as raw material for others.
Ines Temimi, Collectun 3D - E-waste business:
They work on recycling of e-waste. 395 tonnes of e-waste have been recycled to date. In order to gather raw materials, institutions recycle their equipment and have to give it to official entities. Collectun 3D organise awareness campaigns to collect district waste. She remarked that the EU legislation promoted the change.
Sylvia Calvo, Associació de Moda Sostenible Barcelona - Sustainable Fashion:
They upcycle coffee bags from different countries. They achieve to make life span of products last longer and give a new use to a product that was not thought about before. There are more examples in fashion using other materials such as plastic bags or tubes. Sylvia said that we need to go to circular economy and to give new value to waste.
Ferda Ulutas, Turkish Technology Development Foundation (TTGV) - Industrial Symbiosis:
In 2011 the implementation stage started. It was supported by BTC financially. The project is quite unique since it is a private sector initiative financed by private sources. However, it involves developing infrastructure at the national level. One of the concrete actions was the implementation of demonstration projects, with different flows of materials. One of these projects consisted on bio-remediation material production from cotton seed waste. Now the material is being produced at a commercial scale.
Which are the challenges to enable favourable business environment? Which policy instruments and business solutions could address those challenges?
This second group of speakers presented policy instruments and business solutions addressing challenges mentioned earlier.
Ms. Chiva explained that most of their activities such as prevention and recycling have circular economy principles at its core. As part of the Catalan Government they are also involved in the Strategy to promote circular economy in which one important goal is to promote eco-design.
Some tools and activities that the Waste Agency of Catalonia is developing are: the Catalonia Eco-design Award which was first for recycling and now it is for design initiatives (this year they have received almost 200 candidatures, some of them from Mediterranean countries as they have launched for the first time the Euro-Mediterranean category); the network of by-products to promote the valorisation of waste; last year 200 tonnes of industrial waste were re-used; financial instruments and grants for prevention and eco-design projects which funds come from landfill taxes of industry; through the Eco-box they advise companies on circular economy; and, participation in two circular economy networks: Ellen McArthur Foundation and the Circular Europe Network.
M. Dohogne explained they work at the regional level and run projects in Mediterranean countries. He stated that circular economy has rather been invented in the (south) Mediterranean. They recycle more than we do, but they do not notice from the Administration. The reason is that it happens within an informal sector. So this informal sector should be embraced and they should work together. This is what they do in Rabat with a sorting system were the waste pickers now work (at better sanitary conditions). They promote small stores to repair and reuse. The materials that cannot be used are sent to a cooperative to extract the rare metals. Therefore Circular Economy is a job creator.
M. Cerantola said that their role as enablers is to try to unlock the complex system in which we are living in. He said we are skipping important aspects such as economics and human nature. What do we have to do to enable green entrepreneurs? Create tools to strength the business side, guiding them in the business design creation. We are not succeeding with the current way of doing and therefore green entrepreneurs need to be guided.
M. Cubiña said that first thing to understand is how to build in a different way. How to develop trust in a non-conventional way? To achieve that transparency is needed and the way of sharing information also needs to be changed. So, we need to look for the right stakeholders.
Circular economy is about developing new business models it is not only about waste remarked M. Cerantola. Most people in the region are looking for money and for technical support. But the important thing is the exchange of information (sharing information is critical to develop the circular economy model).
Which are the enabling factors of circular economy?
Working groups exchanged knowledge and gathered inputs on the enabling factors of circular economy.
- Financing mechanisms:
Identified the following problems: difficult or lack access to finance (for this more networking is needed), lack of regulations (for example taxes), knowledge gap (financial institutions do not have enough information), liability (some institutions require too much liability for small entrerpreneurs) and lack of transparency
Presented existing solutions: crowdfunding and taxes
Proposed future solutions: incentives, a road map on how to establish funds for green financing, rules for Public Procurement and regulation improvement
- Business support schemes:
Identified the following problems: lack of knowledge about the customer, lack of demand from the end user, lack of supply chain, lack of good marketing for these kind of products, lack of cross-sectoral collaboration, obsolescence of products and lack of training and incubation on circular economy
Presented existing solutions: Social marketing, crowdfunding, green investments, second hand markets, lobbying, innovative business models and innovative programmes and, more knowledge about the customer.
Proposed future solutions: to create a community market for the products, start promoting different product-service systems, virtuous legal and financial network, circular design training and dissemination etc
- Regulatory incentives:
Identified the following problems: lack of Sustainable Procurement Strategies, absence of legal binding goals, lack of market for raw materials, lack of good governance, lack of awareness from individuals, lack of dialogue between different interest groups and lack of incentives.
Presented existing solutions: legally binding measures, tax reduction for green products or technologies, compilation of best practices, financial incentives (including correct pricing for waste and landfills) and sustainable public procurement.
Proposed future solutions: mandatory SPP, full cost accounting, fully integrated policy making, current approach for policy makers and consumers to move in the right direction. Solve the issue of lack of transparency and monitoring.
- Consumer acceptance:
Identified the following problems: confusing information for consumers (lack of useful information, too many ecolabels existing bringing confusion, in some cases it is or it is seen as “green washing”), price concerns (it is usually expected to be more expensive by the consumer that is not always willing to pay more), cultural aspects (perception of disgust- we are not used to repair products and use them during a longer period), supply is not good enough (distribution is not easy for small manufacturers).
Presented existing solutions: sharing good examples, increasing public awareness, enforcement of existing regulations, support for policies/incentives, collaboration between producers and consumers, economic instruments to benefit this products or taxes for bad products.
Proposed future solutions: promoting awareness and action from children to inter-curricula education, connecting consumption with environmental and health messages, getting on board strong brands for selling the message, promote agreements on the global tax trade return.
The main three messages that can be underlined from the various group discussions were:
- There is lack of governance on the topic and there are no strong regulations for the promotion of circular economy: the use of financial incentives or the mandatory application of SPP actions are some of the many ways to change things from the regulatory point of view.
- There is lack of transparency or lack of information (or too much confusing information) concerning existing initiatives and tools: awareness raising, good marketing campaigns and information exchanges among relevant stakeholders, should be key to find solutions to these issues.
- Green entrepreneurs must be supported for the promotion of Green Businesses that will work on the concept of circular economy, for this it will also be important to create a network of raw materials. Financial support is needed for innovative ways of doing business within the circular economy framework.
Let's continue the discussion
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