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Circular Economy: still a foreign concept in CEE

There is only one planet Earth, yet by 2050, the world will be consuming as if there were three. That was the alarming warning of the European Commission when it launched the new Circular Economy Action Plan in March.

These concerns are confirmed if we look at the Earth Overshoot Day, which marks the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate. In 2019, the Earth Overshoot Day was the 29th of July, the earliest ever.

And there are very few signs of things slowing down. Global consumption of materials such as biomass, fossil fuels, metals and minerals is expected to double in the next 40 years, while annual waste generation is projected to increase by 70 per cent by 2050.

Since the first Circular Economy Action Plan was adopted in 2015, Soňa Jonášová, CEO of the Czech Institute for a Circular Economy (INCIEN), has seen the Czech economy slowly changing.

“In particular, the circular economy is developed by companies that logically see it as a huge opportunity,” she tells CEENERGYNEWS. “The Czech Republic boasts many demonstration projects, recycling technologies developed by Czech companies and very interesting research results. But the problem is their multiplication, which is often prevented by poorly set legislation. Statistics still show “circularity”, or the rate of secondary raw material utilisation, at 7 per cent, well below the EU average.”

The case of Greece and Slovenia

The transition towards a circular economy is already underway, with frontrunner businesses, consumers and public authorities in Europe embracing this sustainable model. Greece and Slovenia were among the first countries within Central and Eastern Europe to adopt such strategies.

“National circular economy strategies help the Member States to ensure consistency of policymaking, to create political momentum within the country, to tailor the transition to the Member State own socio-economic characteristics and to support horizontal cooperation and synergies amongst the Member States engaging with similar challenges and opportunities,” a European Commission spokesperson tells CEENERGYNEWS. “Hence, the implementation of the national strategies of Greece and Slovenia will help the countries to accelerate the national transition to a circular economy.”

For Greece, in particular, switching to a circular economy represents both an opportunity and a need considering that the country lags behind significantly compared to other EU economies and its available resources are limited. Therefore, the Greek government is encouraging the idea of eco-design, repair and re-usage, while promoting innovative entrepreneurship models and supporting the bio-economy.

On the other hand, Slovenia aims to become the leader of the transition in Central and Eastern Europe. Its practices underline that the roadmap towards the circular economy is a process that no government is capable of carrying on its own and also cities and local communities must be involved. This has been proven to be true by Ljubljana and Maribor: affecting the behaviour of the citizens and changing their behavioural patterns and habits have led to the formation of a circular culture, which is one of the key factors in enacting change.

Involving the consumers is the key

Other Member States from the CEE region have also adopted or are planning to adopt a Circular Economy National Strategy. However, these commitments remain mostly hidden.

“Maybe not so much less committed, but less engaged,” says Cristian Stroia, Researcher in the Energy, Resources and Climate Change Unit, at the Brussels-based think tank Centre for European Policy Studies (CEPS).

Circular economy still seems to be a foreign concept in the awareness of public perception in this part of Europe, with most discussions on the topic being concentrated in academic and research circles.

“Consumers are generally disengaged from behavioural changes that match their overall positive attitudes towards environmental protection,” he tells CEENERGYNEWS. “For instance, a study from 2016 in Romania showed that the adoption of consumption patterns specific to the circular economy is low for the public when incentives and benefits are absent, even though the consumers were aware and educated on the circular economy.”

In Hungary, the Circular Economy Platform, with the professional leadership of the Hungarian Business Council for Sustainable Development (BCSDH) and with the support of the Bay Zoltán NGO for Applied Research, conducted a survey of the domestic potential of the circular economy in 2019, to identify the most important challenges and to map out the solutions that have already been implemented.

“The results of this online survey confirmed the demand that brought the Hungarian Circular Economy Platform to life: there is a need for innovation, for the presentation of pre-existing business solutions and for the development of new ones to promote the circular economy and related education,” Irén Márta, BCSDH Managing Director tells CEENERGYNEWS.

The transition to a circular economy requires the active involvement of the consumers in changing consumption patterns.

“It must be better demonstrated what circularity means, and companies also need to be more involved in properly informing stakeholders,” she continues. Most respondents think of the circular economy as an expense (38 per cent), although according to international experience, profits have risen at half of the multinational companies that already have circular economic activities in operation.”

Also for the European Commission countries that involve their citizens are a step ahead. When asked to mention a good practice from CEE, the European Commission’s spokesperson underlined two practices, one on a policy tool and one on a method for policy-making.

“On the policy-making method, I would like to mention the importance of an inclusive method when drafting a circular economy roadmap or strategy,” the spokesperson says. “Amongst others when adopting a similar approach, the Slovenian Government involved stakeholders during the drafting with bottom-up consultations and engaged in an internal public discussion to empower all national stakeholders in the transition, while also ensuring the ambition of the document.”

Economical and political differences

Other than a wary public opinion, there are also economical and political factors. Mr Stroia underlines that all countries from the CEE region are in various stages of economic development and most of them don’t spend much of their GDP on research and innovation. What emerged from a CESP’s EU-funded project, called Cicerone, was that EU countries (CEE included) have fragmented and uncoordinated initiatives for research and innovation in resource efficiency and circular economy.

“The political instability, frequent changes of governments, corruption and public sector inefficiencies make it difficult to develop such a strong political will, let alone for systemic changes such as what a circular economy transition would entail,” Mr Stroia explains. “Progress is therefore slow and gradual and it mostly works best when the EU institutions give direction on the implementation. If we are to use the carrot versus sticks metaphor, it is the sticks that sometimes prove to be more effective for CEE countries to advance.”

On a positive note, Mrs Márta notes how the domestic initiative to reduce plastic waste has been considered to be one of the tools for the transition to a circular economy by the Hungarian State Secretary for Construction, Infrastructure and Sustainability at the Ministry of Innovation and Technology (ITM).

“She established an industry consultation forum on the use of plastic packaging products and disposable plastics with the participation of the economic actors and interest representation bodies of the relevant product range this February,” Mrs Márta says. “The next issue of the industry consultations will be the elaboration of a package of proposals concerning the return system for glass and plastic bottles and metal cans for all types of waste, for an entire waste management sector. In the forthcoming waste management strategy will be developed in the spirit of a circular economy.”

Challenges

The transition doesn’t come without challenges. The Commission identified several obstacles, including a need for the work started on chemicals to be accelerated and empowerment of citizens for them to make informed choices.

Cristian Stroia believes that CEE countries are faced with complex challenges in their transition to a circular economy, including the demonstration of full political backing for the upcoming EU recovery plan (post-COVID-19) which will be based on sustainability principles and Green Deal priorities.

The EU recently reaffirmed the need to have the Green Deal as the engine of the economic relaunch of the EU in the recovery period after the corona crisis.

“Some CEE States (such as Romania, Poland and the Czech Republic) had already initially suggested a slowing down of climate ambitions after the EU Climate Law was announced in March, though this would certainly delay the energy transition in CEE and make it costlier,” Mr Stroia highlights. “How these states would readjust is something to wait and see.”

Mrs Jonášová points at the inefficient legislation as one of the main challenges.

“Companies often come up with such innovative projects that they are ahead of it,” she says. “Furthermore, there is a low level of confidence in recycled products, which, while having to meet the same parameters as primary raw materials, still have consumers’ concerns about quality.”

Role-models

There is nothing more efficient than learning from a positive example. The more good practices are effective, the more the idea of a circular economy will spread in the region. CESP’s Mr Stroia welcomes the increasing number of small initiatives in various domains in CEE, although most of them lack public visibility and market uptake. He recalls an interesting and replicable business process from Slovenia called Econyl Regeneration System, which uses sustainable chemistry to recover nylon contained in waste and reconverts it into raw material while keeping its quality.

In the Czech Republic companies responded very well to the change of perspective in the area of waste management for example. Mrs Jonášová speaks about the uniqueness of the Nafigate Hydal technology, the first in the world on an industrial scale to use toxic waste-waste cooking oil to produce biopolymer, something that she believes could be a project with a global overlap.

Among the 11 good Hungarian practices collected by the BCSDH, Mrs Márta indicates Biofilter, a company collecting and processing used cooking oil which is then utilised as biodiesel.

“Food waste is also utilised as environmentally friendly energy at the biogas plant of Soroksári Road belonging to the Budapest Sewerage Works,” she adds.

In 2017, 14,000 tonnes of organic waste were collected, thereby avoiding the emission to the environment of 20,000 tonnes of carbon dioxide.

This last example is just another proof that new circular business models, recycling, energy and material efficiency and new consumption patterns have a significant potential to cut global greenhouse gas emissions. For the European Commission, it means that the transition towards a circular economy and a climate-neutral economy should be pursued together.

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