15-11-2024 13:28

Why are the Nordics falling behind in the circular economy?

In the Nordic countries, we like to think of ourselves as environmentally conscious and good at recycling, but the truth is that we are below the world average. Our sustainability expert, Thina Saltvedt, reflects on this gap and how to close it in connection to the Nordic Circular Summit 2024 which will take place in Helsinki this week.
Expert at Nordea Thina Saltvedt
Thina Saltvedt, Lead ESG Expert at Nordea.

While the Nordics might be frontrunners in garbage sorting, the total impact of our high living standards and consumption on the environment is somewhat gloomier. According to the Circularity Gap Reporting Initiative (CGRi) 96% of Sweden’s materials come from virgin sources and in Norway it is even higher at 97.6%. 

We’ve met with Nordea’s sustainability expert Thina Saltvedt who will be one of the speakers at the Nordic Circular Summit to ask her how to close the gap and how Nordic businesses can be a positive factor when it comes to less resource consuming value chains.  

The Nordic countries are often perceived as great at renewable energy and other green technologies. Have we overlooked something when it comes to the circular economy?  

“The living standard in the Nordic countries is high on a global scale, and the Nordic economies are among the world’s wealthiest. The flip side of having this economically sound position is that people can afford to buy consume and throw away products instead of reusing or repairing them. Our material consumption is high and as a result so is the pressure on the environment.” 

“The EU countries produces more than 2.1bn tonnes of waste every day. To promote a shift to a more sustainable model the EU promotes a circular economy involving for example sharing, leasing, reusing, repairing, refurbishing and recycling materials and products as long as possible. It implies reducing waste to a minimum.” 

What is circular economy?

The world’s natural resources are under increasing pressure and it is critical for the environment that resources are used far more effectively to reduce the need to extract new resources.

In a circular economy, the product life cycle must be as long as possible, and products must be repaired, upgraded and to a larger degree reused. When products can no longer be reused, the material can be recycled and used as raw material in new production. This way the same resources are used multiple times and as little as possible is wasted.

According to the 2024 report from the Circularity Gap Reporting Initiative (CGRi) the share of secondary materials consumed by the global economy has decreased from 9.1% in 2018 to 7.2% in 2023 – a 21% drop over the course of five years.

“According to the Circular Gap report the Norwegian, Swedish and Danish economies are less circular than the world average. This means that out of all materials consumed in these three countries, on average only 3.2% are fed back into the economy in the form of recycled materials. The global economy percentage was 7.2 in 2023.  

“Reusing and recycling products are important to slow down the use of natural resources, and in doing so we can reduce our climate, nature and material footprint. However, the most important thing is to consume fewer products. The EU sees a circular economy as a prerequisite to achieve the EU’s 2050 net zero target and to halt the loss of biodiversity.”

Why do we recycle less when we have systems in place and it is a much debated topic?

“While the volume of discussions, debates and articles on the concept of circular economy has increased markedly in the last few years, it is much more difficult to change our behaviour and consumption habits. We can afford to maintain a high level of consumption and at the same time the market is flooded with cheap fast and ultra-fast fashion and other consumer products. We need a real shake-up of our consumption habits and reorienting towards reducing consumption and buying long-lasting, quality products.” 

One major problem today is that the cost of extracting virgin materials is much lower than recycling used materials. 

“Although we are quite good at sorting our waste in the Nordic countries, we have to start thinking about reducing, reusing and recycling as early as from the product design phase. The products need to be designed for upgrading, reuse and repair and the materials for recycling. We need to reorganise our material streams from linear to circular. We need to develop efficient second-hand markets for reused products and materials.” 

“One major problem today is that the cost of extracting virgin materials is much lower than recycling used materials. The circular solutions must be economically sustainable to initiate the transition to a circular economy.” 

“To do so we need to find the key enablers of policy, finance and labour to accelerate progress towards the circular economy. We need to restructure and redesign total value chains to make circular solutions that integrate seamlessly into the society and the consumers’ everyday life.” 

How do you see the role of Nordic businesses?

“Many interesting business opportunities will arise in the transition from a linear to a circular economy. Large businesses must adapt through innovation and intrapreneurship or they risk being disrupted by fast moving entrepreneurs.” 

“By adopting and using technology in a more efficient and innovative way, Nordic companies can contribute to a more efficient use of resources in the entire value chain. Here start-ups and entrepreneurs can form important building blocks.”

 

About the Nordic Circular Summit

Nordic Circular Summit is the biggest conference on circular economy in the Nordics. It is co-hosted by Nordic Circular Hotspot and Nordic Innovation and is an official World Circular Economy Forum Side Event. The annual summit invites an international audience of policymakers and business representatives to explore the circular opportunities of the Nordic region.

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