DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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52 • DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • The ‘circularity potential’ dimension takes into account not only total resource consumption and waste generation, but also the potential to avoid and/or valorise that waste. For example, mining and quarrying has the lowest score since initial analysis indicated that there is little dependence on other raw materials, little intrinsic value of the materials handled (since mining is generally the first stage in a value chain), limited avoidable waste generated, and a small potential value to valorise the waste. In contrast, the construction sector has a high raw material dependence and handles materials with high intrinsic value, while generating significant volumes of waste that are deemed feasible to further valorise through circular activities. • The resulting matrix is only a guide to the sector prioritisation – there is always a judgement call involved in the final selection. • In addition to sectors, it is also possible to consider other important contributors to resource consumption and waste in the economy, especially from a consumer point of view. Packaging was included as a fifth focus sector 58 in the Denmark pilot since it represents a formidable challenge in terms of reducing the resource footprint of consumer and other goods. While most data needed to assess the role in the national economy can be found in national statistical databases, assessing the ‘circularity potential’ relies more heavily on expert opinion and judgement. Assessing the ‘circularity potential’ will require a first round of interviews with sector experts and consultation of previous reports (such as the Denmark findings in this report, and the reports mentioned in Table 1 in Part 1). To structure the assessment of the scope for improved circularity, inspiration can also be taken from the ReSOLVE framework laid out in Chapter 1.1. Figure 12 in Section 2.2.2 provides an indicative overview of which ReSOLVE circularity action areas could be worth further investigation in different sectors. It is useful to consider the sectors as ‘anchor sectors’ for their respective value chains. This means that subsequent opportunity analysis would also look at a focus sector’s supply chain and customers. 59 For example, in the Denmark pilot, the selection of the anchor sector ‘Food & Beverage processing’, also involved an analysis of the consumer side to address the issue of avoidable food waste. An alternative to the selection of ‘anchor sectors’ is the direct selection of full value chains. The Netherlands Organisation for Applied Scientific Research (TNO), Circle Economy and MVO Nederland developed an approach for such a value-chain selection mechanism, and is currently applying it to the Dutch economy. 2.2 Assess sector opportunities Once the focus sectors have been selected, the sector-specific assessment can begin. This step can be conducted in parallel sector working groups, and heavily relies on the involvement of businesses. The most relevant circular economy opportunities need to be mapped (Section 2.2.1) and prioritised (Section 2.2.2). For the prioritised opportunities, sector-specific economic impact needs to be assessed (Section 2.2.3), barriers limiting their realisation identified (Section 2.2.4) and policy options to overcome these barriers mapped (Section 2.2.5). The different sector deep dives can be conducted in parallel by one central project team, or managed by individual project managers or small teams. The project team(s) in this step should have disposal of strong business analysis skills and circular economy expertise, including the ability to understand value chains, facilitate discussions with businesses and perform sector-specific quantification of economic impact. Prior experience in circular economy is an important success factor especially for the mapping 58 While not technically a sector, ‘packaging’ is referred to as a focus sector throughout the rest of the document. 59 This perspective also allows the evaluation of opportunities within ‘non-producing’ sectors, as part of the anchoring sector’s value chain.
DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • 53 and prioritisation of circular economy opportunities described in Sections 2.2.1 and 2.2.2. Policy analysis skills are required for the mapping of policy options. In the Denmark pilot, in total, around 25 man-months (5 to 10 persons over a period of 4 months) were dedicated to this step. For this step, it is crucial to intensively engage businesses from the focus sectors and their value chains, in order to: • Get insights and knowledge to identify the most relevant circular economy opportunities and barriers in each focus sector. • Create early alignment on a common direction for the country and the focus sectors. • Further demonstrate circular economy benefits to businesses and build capabilities. It can be helpful to engage a diverse group of businesses, as perspectives on opportunities and perception of barriers may differ between businesses even within one sector based on the business size, business model, product focus and prior experience with circular business initiatives. Engaging selected businesses from other countries where relevant in addition to the focus domestic businesses can help capture international best practices. Industry associations, academics, consumers and other society stakeholders are also relevant to involve at this point. Practically, a mix of individual interviews and sector working sessions is likely to be helpful. Individual interviews work well to capture detailed input on opportunities and barriers. Bringing businesses together in sector and value chain (and, to a lesser extent, cross-value chain) working sessions can complement individual interviews by providing a forum to jointly align on the way forward, and to create a strong network of businesses dedicated to accelerate the transition towards the circular economy. Ideally this network does not simply help to identify opportunities and barriers in the project itself, but continues to exist as a standalone network where circular economy frontrunners can exchange best practices and find partners for circular business opportunities. The Denmark pilot included a series of 90-minute phone interviews with over 25 individual businesses, complemented with an in-person joint working session format that built upon the existing Danish circular economy network ‘Cirkulær økonomi’, led by Ida Auken, Member of Danish Parliament, member of the World Economic Forum Meta-Council on the Circular Economy 2014-2016, and former Danish Minister for the Environment. 2.2.1 Map circular economy opportunities in each focus sector Objective: End product: Create exhaustive overview of possible circular economy opportunities, to be prioritised in Section 2.2.2. Structured map of potential circular economy opportunities for each focus sector, identified along the ReSOLVE framework. The circular economy covers many types of opportunities that can differ significantly by sector and country. It can therefore be helpful to systematically map potential opportunities in each sector before proceeding to prioritise among these opportunities. The ReSOLVE framework laid out in Chapter 1.1, offers a structure for such a systematic screening of opportunities. 60 Using the ReSOLVE framework to identify and map opportunities involves an iterative exercise that begins with a high-level mapping for each focus sector derived from existing circular economy literature, including the reports 60 Ellen MacArthur Foundation, Stiftungsfonds für Umweltökonomie und Nachhaltigkeit (SUN) and McKinsey Center for Business and Environment, Growth Within: A Circular Economy Vision for a Competitive Europe (2015).
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DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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