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Circular Economy

How do we make the energy sector circular?

Not only does the Dutch government want to be fully circular by 2050, it has also set itself the goal of being climate neutral by that year. This means that the percentage of renewable energy must increase from 20% in 2019 to 100% in 2050 (Climate Agreement, 2019). The use of renewable energy is also a requirement for a circular economy, so theoretically the two transitions are mutually reinforcing. In practice, this does not appear to be the case.

For the time being, the energy transition will only increase the consumption of raw materials, for example for the production of solar panels, batteries and insulation material that cannot be recycled at high quality (Copper 8, 2018). This illustrates the importance of circular solutions within the energy transition.

Figure 1: Most solar panels cannot be recycled, while the use of these will have to increase significantly in the Netherlands if the government is to become climate-neutral by 2050 (photo: ArsTechnica).


Due to the political discussion on how sectors should reduce their CO2 emissions, little attention has been paid to the circularity of this transition until 2020. Most solutions are therefore in their infancy, but will be crucial if both transitions are to be completed in 2050. This offers many opportunities for entrepreneurs. The energy transition can be divided into three challenges:

  • The generation of renewable energy;
  • The use of renewable energy;
  • Saving our energy consumption.

Below are three examples of circular solutions to these challenges.

Renewable energy with renewable solar panels

As mentioned earlier, 80% of the energy is still generated by fossil fuels (Energie Opwek, 2019). To replace this with renewable energy, millions of solar panels and thousands of wind turbines will have to be installed in the coming years. Solar panels contain many valuable materials, such as silicone, silver, glass and aluminium. According to CBS, the current solar panels have an average lifespan of 25 years. The first solar panels will therefore have to be replaced in the coming years, but there is still little knowledge and infrastructure to recycle them. To change this, DSM has developed a solar panel that can be fully recycled (DSM, 2019).

Entrepreneurs who want to obtain information about the circularity of renewable energy sources can obtain information from TU Delft.

Collecting hundreds of thousands of batteries

In order to reduce the use of fossil fuels, electricity not only has to be generated in a renewable manner, transport means also have to switch to electric propulsion. At the beginning of 2019, less than 2% of the cars in the Netherlands had an (partly) electric drive (CBS, 2019). In the same year, however, 54% of the newly sold cars had an electric motor, resulting in a sharp increase in the percentage of electric cars (Netherlands electric, 2020). The same applies to other means of transport, such as electric bicycles and scooters. The batteries that are made for this purpose are complicated to recycle, but contain all kinds of scarce materials. There are therefore interesting business opportunities in the collection and recycling of batteries. One company that demonstrates this is EcarAccu, which recycles and refurbishes batteries (EcarAccu, 2020).

Entrepreneurs who want to gain inspiration about the recycling of batteries can contact the Stibat foundation. This foundation was set up by producers of electric bicycles to process the batteries properly after use.

Packing millions of houses with rock wool

In order to comply with the government’s climate agreement, millions of houses will have to be insulated in the coming years. Participants of the National Think Tank estimate that 152 million m3 of insulation material will have to be produced for this purpose. If this material is not recyclable and reusable, it could lead to emissions of 15 megatons of CO2, while the Netherlands will have to reduce its emissions by 56 megatons of CO2 by 2030 (Nationale DenkTank, 2018).

Figure 1: Illustration of the undesired impact that the use of recyclable insulation material can have on the CO2 balance (Nationale DenkTank, 2018).

One option for insulation material that allows this material to be reused is stone wool, produced by, for example, the Rockwool company. Rockwool is made from Ablast, a volcanic rock that is common on our planet. Rockwool also has its own factory to recycle their insulation material and that of others. In this way they create a closed cycle for the insulation material of companies (Rockwool, 2020).

The Amsterdam Metropolitan Area has researched how insulation material can be reclaimed. Entrepreneurs who want to get started can look at the case study here and at the calculation model here.

Economic and ecological gains

In the right way, the energy and circularity traditions can reinforce each other and achieve economic and ecological gains. According to research by the Ellen MacArthur Foundation, when production is circular, emissions of cement, steel, plastic, aluminum and food are halved. Most of this profit is achieved by reducing the energy needs of this production. In this way money is saved, emissions are reduced and less renewable energy needs to be produced (Ellen MacArthur Foundation, 2019).

Another area in which economic gains can be made is the circular design of renewable energy sources and carriers, such as solar panels, wind turbines and batteries. This will reduce the economy’s dependence on critical materials by recycling them internally.

The barriers

While the circular economy offers many opportunities for the energy sector, there are two clear barriers preventing entrepreneurs and policymakers from realising them.

One-sided focus on the energy transition

Due to the imminent danger of climate change, there is more political attention for the energy transition, both internationally and nationally. Political leaders are struggling to get citizens and businesses involved in this transition. As a result, there is less political attention for the circular transition.

Emphasis on energy efficiency

With the political pressure to eliminate the use of fossil fuels and increase the share of renewable energy, the focus of research and development is on the more cost-effective generation and transport of renewable energy. This leads to a lack of knowledge and awareness about circularity in the energy sector.