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Circular economy: the new business model for entrepreneurs – interview with Douwe Jan Joustra, Director, ICE-Amsterdam

Despite having recognised the benefits of a circular economy, it is still a foreign concept in many countries. Perhaps due to the fact that it is too often used as a synonym for recycling and less as a business model. 

On the sidelines of the Climate Change Summit organised in Bucharest on 4-5 October by Social Innovation Solutions, CEENERGYNEWS spoke with Douwe Jan Joustra, Director of ICE-Amsterdam about the reasons behind the slow acceptance of circular economy practices and the peculiar role that carbon could play if we change our perspective towards what is called ‘the king of elements.’

For Mr Douwe Jan Joustra, the economy is the most powerful change agent we have. He recalls that every huge innovation that has ever happened, succeeded only if there were economically interesting returns for entrepreneurs.

“Linear economy has been so successful for centuries already and we have all been educated with this model that it is difficult to imagine a system’s change,” he says. “Especially for an entrepreneur is very difficult.”

However, he points out that we are already used to circular economy models. For example, libraries, where we read a book and we bring it back. Or simply, public transportation: we don’t buy a bus or aeroplane, we only purchase a seat for a certain amount of time. 

“But the success of the linear economy is that it brought each his/her own car, so now we think that owning a car is a right for every individual,” he underlines. “Why not share the car? Of course, this is a model that is very common in many cities. For example, in Bucharest, electric scooters can be picked up everywhere and people are starting to understand that there is no need to own it if we can simply use it.” 

And this is the fundamental aspect of the circular economy: not owners but users. 

“The circular economy is about services,” Mr Douwe Jan Joustra highlights. “Nowadays economical competitiveness around products is very difficult because all of them have the same high quality.”

Today, having competing products is not about the best anymore, but about the best services.

He mentions televisions as an example. They all have the same features and cost more or less. What happens when consumers do not want it anymore and prefer to buy a new one? It simply disappears in the waste system and when products arrive at this stage, all the value has disappeared.

“If it stayed in the hands of professionals, in other words, in the hands of a supplier providing good services as well, it would be easier to reuse at least some parts of it, if not the whole product,” he continues. 

Thus, why is it so difficult? 

“Because selling is the normal business model in our modern world,” Douwe Jan Joustra replies. “But it should be attractive for entrepreneurs. Let me give you an example: Chile is the biggest exporter of copper. If the country would have stopped selling the product itself but selling services and contracts, it would be, by now, the richest economy in the world. We saw this same potential during the COVID pandemic. Companies that had services, for example, cable providers, didn’t have problems at all. The resilience of companies based on circular principles is much more in the long run.”

So, the question naturally arises: is a circular economy 100 per cent achievable?

“We need a lot of system innovation before we come that far,” believes Mr Joustra. “I am sure it will happen because we have no more ways to get new resources. In 2080 there will be a circular economy but I don’t want to wait that long as we all need to live a comfortable life still.”

So, when asked, do we need less or better? We need good. And this means fighting against the deterioration of the materials and doing some good product management so that the quality stays as high as possible. What today is a 90 per cent loss it could be 10 per cent.

High as possible means that the waste option should be the last one.

“We should take care of keeping the products higher in the hierarchy like the whole product at a different location,” he says. “The lower you go, the most value you have lost. Keep away from as long as possible from recycling and waste.”

According to him, a good way to do it is by shifting the focus towards carbon usage as a building block of many products.

“Carbon is called the king of elements,” he says. “Because in chemistry, it is the key element of almost everything. And we find it in diamonds, pencils and everything in between. Carbon is a very good element to use for products. We have a problem when it turns into carbon dioxide. So, we have to find solutions to use the carbon, dividing carbon from dioxide.”

For him, we have a huge knowledge and an enormous chemical industry so it should not be something difficult to achieve. In other words, let’s change our perspective on carbon, trying to have a positive approach. A little bit as it happened for the gas industry: after demonising the gas, we are recognising that we need it, if only for a while. 

“There is an almost infinite amount of carbon available,” Douwe Jan Joustra concludes. “The more you can get out from the atmosphere or production processes, the better. I challenge entrepreneurs to see carbon as the king of elements.”

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