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Circular Economy

What policies are still necessary?

With additional and sometimes different policies, the Dutch government can promote the transition to the circular economy even better. For example, definitions of waste and raw materials in legislation and regulations have become outdated. In addition, policy measures still focus mainly on recycling and traditional partnerships, and a tax shift from labour to raw materials has not yet been achieved. In addition to the national level, it is important that the Dutch and European governments continue to manifest themselves internationally for the circular economy. Worldwide, the amount of mined raw materials is still increasing every year.

National level

Implementation of laws and regulations hinders circularity

In October 2019, the Task Force Waste Review published its report on regulatory and legislative barriers to the circular economy. The most important observation made by the Task Force was that the obstacles are not so much found in legislation and regulations, but for the most part in their implementation. Rules are often not interpreted in the same way; experimenting with new production processes is sometimes difficult. The Task Force sees that as a result initiatives remain small-scale, while the step must now be taken towards more and more extensive innovative processes (Ministry of Infrastructure and Water Management, 2019).

The Task Force Waste Review was set up by the Ministry of Infrastructure and Water Management to advise the government on obstacles to circularity in waste legislation and regulations. These laws and regulations originated in the 1970s, when waste became a problem. At the time, the starting point was a linear idea, whereby a product would become a waste. Hence the waste legislation and regulations clash with circular ambitions. The findings of the Task Force have been incorporated in this diagram and worked out in detail in the final report (both in Dutch):

Recommendations of the Netherlands Environmental Assessment Agency

In 2019, the Netherlands Environmental Assessment Agency (PBL, 2019b) made an inventory of where policy measures concerning the government’s circular economy focus on. They concluded that the government should focus its policy more broadly. Below are a few recommendations from the report. Read the complete report (in Dutch) here:

Broaden the policy

Most government (and business) initiatives within the circular economy focus on recycling. Innovations higher up the R ladder, such as re-use and services, are less common, while such innovations generally reduce the use of raw materials to a greater extent. Attention to the full breadth of the R strategies is valuable in the transition to a circular economy. An example is that action for circular design is illustrated in the policy letter with design-for-recycling (Ministry of Infrastructure and Water, 2018). This could be elaborated more broadly, for example with a design-for-repair design for headphones and smartphones.

Often, social initiatives that contribute indirectly to the circular economy are not recognised and supported as such. Examples are community centres, thrift shops and urban agriculture initiatives. Social cohesion and not circularity are often the main objectives, but these activities do contribute to a more efficient use of resources. These activities are important because they create support and awareness for a circular economy and make tangible what circularity can mean at the local level.

Many policy discussions distinguish between ‘linear’ and ‘circular’ or ‘old’ and ‘innovative’. In reality, there are many circular activities that have existed for a long time and are now an integral part of Dutch society, such as the repair of shoes or the sale of second-hand clothing or white goods. These activities are already quite normal, but are often not recognized and recognized as part of the circular economy. This is a missed opportunity, because there is a lot to be learned from these initiatives about possible success factors and limitations for the creation of a circular economy.

Create partnerships

New partnerships are needed to create a circular economy. From their inventory, the PBL (2019b) concludes that there are still few initiatives in which parties set up new collaborations outside the boundaries of their own organisation or their existing partners. It is important that governments stimulate and facilitate new partnerships between companies. This can be done, for example, by involving a director or mediator via the Acceleration House, who helps parties to find and understand each other.

Increase support

Further development of the circular economy requires not only changes in the law and regulations and adaptive policies, but also changes in the habits and attitudes of people and companies. For example, recycling initiatives are more likely to break through and find more applications when negative perceptions about the quality of recyclate change. This would be the case, for example, if a shampoo bottle made of recycled plastic with a different colour were to be considered ‘normal’. Initiatives that combine circularly with local and social goals offer the perspective of solid social anchoring.

Shift taxes

Research carried out by the PBL in 2017, for the report on fiscal greening, showed that taxing the use of fossil fuels at an early stage in the production chain would be an effective greening measure (PBL, 2017). The PBL calculated that the main part of the environmental damage in the Netherlands occurs in the production of materials and semi-finished products. This annual environmental damage is in the region of €7 billion. However, 55% of the total use of energy is not taxed. This makes the potential of fiscal instruments to reduce environmental damage in the production phase great.

International Level

Circle Economy calculated for their report The Circularity Gap Report that by 2019 only 9.1% of the world’s raw materials will be fully recycled. In 2018, this was still 9.5%. Internationally, the world is moving away from a circular economy. The researchers formulated four recommendations to reverse this trend. Three of these recommendations are relevant here:

  1. Develop decision criteria and a measurement framework. This will stimulate the setting of objectives, evaluations and peer review.
  2. Make international knowledge transfer easier. This will accelerate the international dissemination of effective policies.
  3. Build a global coalition for action that is both diverse and inclusive. This coalition will increase the capacity of frontrunners.