Circular economy shouldn’t be seen as a cost but as an opportunity for companies to grow

05. 10. 2022

Circular economy shouldn’t be seen as a cost but as an opportunity for companies to grow

Why is the transition to a circular economy a must? What are the opportunities and challenges for companies? All this was discussed at the final conference of the Circular4.0 project in Bled by an enthusiastic and very active community of experts whose mission is to encourage and educate companies in the Alpine region to transition to a circular economy with the help of digital technologies.

The project, which lasted three years and whose leading partner is Technology Park Ljubljana (TPLJ), brought many fruitful results and insights that far exceeded initial expectations. An important community of sustainability enthusiasts was formed, who will continue to strive for a circular economy even after the project is over. All fifteen participating partners, with the help of circular economy and digital transformation experts, provided the necessary training to 295 companies from the Alpine region. 

Companies need the right skills and tools

The transition to digitalization and the circular economy can be quite difficult for the companies. It is important to fully commit to the results and persevere, agreed the conference participants. Raising awareness and building a community are also of great importance, as sharing experiences and knowledge makes the process much easier.

Roberto Sandrini (TPLJ’s external expert) presented the detailed process of the project and the activities carried out in it. He emphasized the importance of the so-called twin transformation of companies, which included digitalization and circularity. During the pilot projects, it was established that companies that have already gone through the digital transformation have a much greater chance of moving more easily and quickly into the mature phase of the circular economy.

To transform the companies, they used three fundamental approaches: circular design, value recovery and optimal use.

During the project, the pilot companies received professional support from experts in circular economy and digital transformation. Their digital and circular maturity levels were assessed using specific tools, and an action plan for transformation was then created based on the assessments and results. Cesar Pacheco from Fondazione Piemonte Innova (project partner) emphasized that great flexibility is required when working with companies that are at different levels of digitalization and circular economy, and that companies need a precise framework on the path of their transformation.

Dr. Albachiara Boffelli from the University of Bergamo, who has been working as a consultant to the companies during the transformation process, expressed her excitement that at the end of the project, the companies are ready for the next step as they continue to increase their level of circularity. She pointed out that transformation at both levels - digitalization and circular economy - is crucial, since circular economy is not possible without prior digitalization.

The European Union is a world leader in the circular economy

"Circular economy is innovation in the deepest sense of the word," said Jurij Giacomelli of Giacomelli Media. The transition to a circular economy is a systematic process that no one can accomplish alone. The European Union has led the way in this area. We have much more advanced transition systems and models than other global regions. Therefore, it is only necessary to continue with the implementation. He added that we can no longer separate energy and materials (resources). Therefore, instead of energy losses, we should also address the "energy for energy" aspect, he said. Circularity has always been the right direction.

A Slovenian success story

Among the pilot companies involved in the transformation process was the Slovenian company Beti d.d., which designed and launched a sustainable underwear line DISCO5 as part of the project. The company's CEO, Maja Čibej, explained that the products are made entirely from sustainable materials that are either recycled or biodegradable, and that they are very durable. Waste has been avoided as much as possible at all stages of the process, and a modular design has been used that allows the products to be recycled. Each product is also equipped with digital identification (digital ID), which ensures transparency and traceability of material and product. Motivation is the key

All participants agreed that the transition to a circular economy is not possible without the right motivation. Maja Čibej pointed out that it is crucial to have motivated employees who must also see the benefits of the transformation on a personal level.

You can also check out other success stories from the project in a virtual showroom here.

Nina Meglič from the Strategic Development and Innovation Partnership - Network for the Transition to a Circular Economy (SRIP - Circular Economy) said that interest in the circular economy outside the community is extremely low and that the future recession will force us to act differently.

Luc Schmerber of the German business initiative BWCON pointed out that product longevity and material efficiency can be a major business advantage. The obstacle lies in the lack of implementation, proper regulation, and legislation. Maja Čibej added that unfortunately it is still money that sets the trends, citing low-cost textile products as an example.

The participants of the conference also highlighted the extraordinary importance of financing or access to financial resources that enable companies to make the transition to the digital and circular economy.

Matic Šerc from Elmibit d.o.o. (Slovenian eVine2Wine project) added that it is necessary to emphasize the consequences of unsustainable business. The more people are internally motivated, the faster changes will occur.

Where do we stand with regulation?

Marija Čebular Zajec from the Ministry of Economic Development and Technology presented the Slovenian Industrial Strategy (SIS 2021-2030), which focuses on green, creative, and smart development. The strategy's goals are in line with the European Industrial Strategy and focus on green and digital transformation, as well as strategic autonomy and resilience. The strategy also envisions addressing crisis situations, such as a disrupted global supply chain.

The three pillars of the strategy are:
- transition to a low-carbon circular economy
- decarbonization of energy-intensive industries
- industries based on wood and other natural bio-based materials.
The goal of sustainable mobility has also been added.

61 guidelines have been drawn up for actions that are already being actively implemented as part of the Recovery and Resilience Plan. In addition, 15 public tenders have already been announced in this area, with a total value of 670 million euros.

From the EU's point of view, the guidelines were presented by William Neale from the European Commission's Environment General Office, who spoke about the implementation of the European Green Deal. This envisions Europe as a just and prosperous society with a modern, sustainable, and competitive economy free of emissions and greenhouse gases by 2050 with economic growth that no longer depends on resource consumption.

He also said that circularity will be an official condition for launching the product to the market. One of the biggest changes will also be the requirement to provide product information that serves as a digital passport that customers can scan on the product. He emphasised that the essence of the circular economy is to preserve value. It is necessary to use existing technologies and not cheap technologies. The regulation is expected to come into force in two years and will be an extremely powerful tool for consumers and ensuring product quality.

Matija Pavlovčič from the Government Agency for Development and European Cohesion Policy (EUSAIR facility point) said that they are creating an innovation environment in the Adriatic-Ionian macro-region and that the circular economy does not mean recycling, but building value chains. 

What will the future bring?

The main recommendations and project conclusions are that to transit to a circular economy, companies need financial resources or financial injections, supportive legislation, appropriate technologies and innovations, and suitable infrastructure and knowledge.

Maja Čibej pointed out that it will be crucial to start thinking in terms of reducing economic growth, with GDP no longer being the only indicator of growth and success. Circular economy companies begin to generate profits much later than companies that do not practice a circular economy, and the existing economic system does not yet function in a way that promotes the reduction of economic growth in favour of a better quality of life, which in turn leads to a cleaner environment, a fairer social system, etc.

Marko Mitrovič, founder of the Optifood platform, where food waste finds new users instead of ending up in the trash, pointed out that 1.3 billion tons of food waste are generated every year. He said that it is necessary to start creating harmony in the economy and focus not only on maximization, but on optimization. He emphasized several times that we do not have a good system and that we definitely need the Ministry of Circular Economy. What we need is a unified platform and a holistic approach that works systematically to establish a circular economy in the broadest sense.

He predicted that in a few years, competition in the circular economy will be much greater and that in the next ten years, 70 percent of processes will be digitized.

Marco Galanti of Technology Transfer and Innovation (Agency for Innovation) said that products and services are becoming more and more complex and that in the future there will be many companies that will be very well specialized in their niche. He added that it is necessary to highlight the benefits of the circular economy, which actually saves resources and not the other way around. He warned that non-sustainable business will become very expensive for companies in the future.

Roberto Sandrini closed the conference by saying that we are facing a difficult time, which will be linked to the struggle for material and energy resources. The growth in the future will inevitably be linked to the circular economy and digitalization. It will not only be important to involve business, but also the environment, politics, and society as a whole.

Aleš Pevc, head of the Technology Office and a visionary of the XR lab at the Technology Park Ljubljana, added that the Circular4.0 was a revolutionary project that started a community movement and pushed the boundaries of sustainability. In 2017 or 2018, when the idea of the Circular4.0 project was born, no one was talking about circular economy. Today it's very different, also on behalf of this project.

"The circular economy should not be seen as a cost, but as an opportunity for companies to grow. The circular economy trend is a river that can no longer be stopped" Roberto Sandrini.

If you want to watch the recording of the entire conference, it is available HERE .

PPT presentations are available HERE

For any further questions, initiatives, and advice on circular transformation, please contact Majda Potokar at the Technology Park Ljubljana: