Transition to a circular economy
Today, Finland is taking steps to increase the share of reusing and recycling and to promote circular economy. In a circular economy, materials are utilized efficiently and sustainably, and they remain in circulation for a long time and safely. Products are also shared, leased, repaired and recycled. Servicification is part of the circular economy, for example, when services replace the ownership of products by paying for their use or results. The circular economy is a new operating method for the economy that produces economic well-being within the limits of the planet’s carrying capacity. It utilises digitalisation efficiently and will renew the structures and operating models of society. The circular economy is a means for reducing the use of natural resources.
Circular economy will replace the linear economy which is based on material overconsumption and the abandonment of those materials after use (cradle-to-grave design) and it will create a new economical base that fits into earth’s carrying capacity (cradle-to-cradle design). Circular economy aims in reduction of the consumption of virgin materials and to decrease environmental damage and also to a more sustainable consumption of natural resource.
The aim of Finnish waste legislation is to prevent danger and harm to health and environment caused by waste and waste management, to reduce quantity and harmfulness of waste, promote sustainable use of natural resources, and to ensure a well-functioning waste management and prevent littering. Finnish waste legislation follows the development of EU’s waste legislation, though in some parts Finland’s waste legislation is even stricter and more wide-ranging than the EU’s regulations. (Jätelainsäädäntö.) In EU’s Waste Regulatory Package has been prescribed on municipal waste recycling rate which should be 55 percent in year 2025, 60 percent in 2030, and 65 percent in 2035. The recycling goals for packaging waste have also been defined in the Waste Regulatory Package: 65 percent of all packaging waste has to be recycled by 2025, and 70 percent by 2035. (Jätesäädöspaketti.)
More information on Finnish waste legislation and the waste legislation package:
- https://ym.fi/en/waste-legislation (available in Finnish and English)
- https://ym.fi/jatesaadospaketti (available in Finnish)
In the Finnish Waste Act (646/2011) it has been prescribed that there is an order of priority considering waste (8§). According to the order of priority the amount and harmfulness of waste should primarily be reduced. If waste is created, then it should be primarily prepared for reuse or secondarily it should be recycled. If even recycling isn’t possible, the holder of the waste is responsible of utilizing the waste in other ways, including as energy. Only in the case where utilization is not possible, the waste is disposed
Economic models that closely relate to Circular Economy
As part of the circular economy operations models products are also being shared, rented, repaired, and reused, and products are turned to services, in which case the ownership of products can be replaced by paying for the right of use (Source: Kiertotalouden strateginen ohjelma). Sharing Economy is based on the sharing of products and services between people. In Access Economy temporary rights to use products or services are being shared through digital platforms. In Peer-to-Peer/Peer Economy trade between two equals or actors happens without intermediary. Platform Economy consists of digital and information system based services that are being used by different actors. (Source: Harmaala ym. 2017.) Thus, there are other economic models that are related to circular economy.
Circular economy is also often connected to concepts bioeconomy, cleantech, and sustainable development. In Circular Economy the material consumption has been planned to be sustainable and in which one part is biobased cycles and thus also bioeconomy can be seen. Cleantech on the other hand is a solution palette that transsects sectors, and in the palette services and products are often being developed by the principles of circular economy. (Source: Sitra 2016, s. 40)
Circular Economy programmes, action plans, and road maps on EU and national level
The European Commission has adopted the new circular economy action plan in March 2020. It is one of the main steps as part of the European Green Deal, which aims in reaching sustainable growth. The new action plan announces initiatives along the whole life cycle of products and targets in how products are designed, promotes circular economy processes, and promotes sustainable consumption. It also aims to ensure that waste is prevented, and that resources are being kept in EU’s economy as long as possible. (Source: Circular economy action plan)
In 2021 the Finnish Government made its decision in principle about the strategic programme of circular economy, which has a goal of making circular economy as the new base of our economy by 2035. Other aims and visions of the programme are i.a. sustainable products and services being mainstream of economy and sharing economy is mundane; the use of natural resources is sustainable; and innovations, digital solutions, smart regulation, and responsible investors, companies, and consumers have achieved circular economy breakthrough. (Source: Kiertotalouden strateginen ohjelma)
Finnish national road map to circular economy aims in speeding up the shift to circular economy in Finland in 2016–2025. The road map highlights the best practices and pilots. The focal point measures have been divided to policy measures, key projects, and pilots. The recycling of materials into resources and components and the energy recovery of materials are also being seen as parts of circular economy. In circular economy product are designed to be reused and recycled to begin with. (Source: Sitra 2016.) One significant factor is seeing natural resources as scarcity when as one of the main measure rises getting material into circulation time after time (Source: Sitra).
Transformation to circular economy requires cross-sectoral collaboration, resources and a clear strategy. Road maps are the base of this work. Finnish Innovation Fund Sitra has put together and published an open guide which can be used as a tool for constructing an own circular economy road map on national, municipal or organizational level. Start your journey to circular economy today! Access the guide.
Circular economy projects and circular economy in business
Finland has countless of circular economy projects, i.a. on legislation and business models. You can find a list of some projects
Many companies have also shifted towards circular economy in their business models. Here you can find Finnish company examples on circular economy
Circular economy business models
Circular economy reshapes the way individuals, communities, cities and government works and functions. More and more, the industry is based on sustainable resources and renewable energy, services instead of ownership, durable products, shared resources and material reuse. Even companies business models reshape. The way the profit used to be made, no longer applies.
There are five business models based on circular economy:
- Product as a service: offering services instead of products.
- Renewability: using renewable and recyclable materials as well as renewable energy in product planning and production
- Sharing platforms: increasing the level of use of goods and resources and prolonging their life using digital platforms. This can include renting, selling, sharing and reuse.
- Prolonging product’s life span: products are in their original use as long as possible by renovation, repair and remanufacture.
- Resource efficiency and recycling: effective solutions, recollection and reuse of products and recources that are at the end of their lifetime.
These business models offer new ways to create added value through service and digitalization.
Ministry of Environment. Strategic programme to promote a circular economy. Searched on 26th November 2021 on: < https://ym.fi/en/strategic-programme-to-promote-a-circular-economy >
Sitra (2016). Leading the cycle: Finnish road map to a circular economy 2016-2025. Sitra studies. Searched on 26th November 2021 on: < Leading the cycle: Finnish road map to a circular economy 2016-2025 – Sitra >
Sitra (n.d.). Kriittinen siirto: Suomen kiertotalouden tiekartta 2.0. Haettu 19.11.2021 osoitteesta: < https://www.sitra.fi/hankkeet/kriittinen-siirto-kiertotalouden-tiekartta-2/ >
Suomen virallinen tilasto (SVT): Jätetilasto [verkkojulkaisu]. ISSN=1798-3339. 2019, Liitetaulukko 2. Jätteiden käsittely 2019, 1 000 tonnia . Helsinki: Tilastokeskus [viitattu: 22.11.2021]. Saantitapa: http://www.stat.fi/til/jate/2019/jate_2019_2021-06-16_tau_002_fi.html
Harmaala, Toivola, T., Faehnle, M., Manninen, P., Mäenpää, P., & Nylund, M. (2017). Jakamistalous (1. painos.). Alma Talent
Euroopan komissio. Circular economy action plan. Haettu 17.11.2021 osoitteesta: < https://ec.europa.eu/environment/strategy/circular-economy-action-plan_en > SYKE (2021). Kohti kiertotaloutta. Haettu 17.11.2021 osoitteesta: < https://www.syke.fi/fi-FI/Tutkimus__kehittaminen/Kiertotalous > Ympäristöministeriö. Kiertotalous. Haettu 17.11.2021 osoitteesta: < https://ym.fi/kiertotalous >
Ympäristöministeriö. Jätelainsäädäntö. Haettu 17.11.2021 osoitteesta: < https://ym.fi/jatelainsaadanto >
Ympäristöministeriö. Jätesäädöspaketti. Haettu 17.11.2021 osoitteesta: < https://ym.fi/jatesaadospaketti >