Transition to circular economy in the Nordics — how to make it happen?

The Nordic region aims to be a forerunner in the transition to circular economy. For the past two years, together with our Nordic partners, Gaia has looked into how the circular transition of key sectors of industry can facilitate business development and innovation supporting the green transition and biodiversity goals. The final report of our study “Circular Transition in the Nordics” summarises how the Nordic governments and the cooperation facilitated by the Nordic Council of Ministers can help accelerating the sustainable transformation of the Nordic societies.

Cooperation is needed to remove barriers for the circular economy and unleash these benefits. Joint challenges and capabilities in the Nordics are found especially within the key industrial sectors of circular bioeconomy, food and beverage, building and construction, and mobility and transport logistics. New circular business models based on the use of data and digital tools – such as producer responsibility schemes, servitisation, sharing economy models and digital market places – as well as industrial cooperation on sharing material streams can bring systemic change to the use of resources, materials, products, and services within these and other key sectors.

This transition holds promise for significant benefits but will also have complex climate and environment impacts, economic effects, and societal reach. Climate and environmental benefits, such as reduced emissions and waste can lead to improved quality of air, waters and soil, as well as reduced biodiversity loss, if circular economy leads to real decrease in the use of virgin resources and is developed in a sustainable way.

Businesses’ adoption of circular practices will require effort in the short term but is expected to yield cost savings and growing business opportunities in the long run. Socio-economic impacts can differ greatly across and even within regions, as the transition brings changes in industry structures and the employment base. The progress in circular economy is at its best a tool to ensure green transition which is also just and fair by providing means to achieve a more diversified economic base needed in prosperous regional development. The just and fair transition, however, requires special attention since also adverse impacts can emerge.

Our study focuses on how Nordic co-operation can support the development of circular economy and help to remove remaining barriers for circular business development. Among the barriers we identified are those related to lacking or counterproductive regulation and standards, the availability of data needed to scale up new technologies, and the currently underdeveloped markets for circular solutions with linear business operations remaining the cultural norm.

There are several good examples of how policy co-operation on the Nordic level as a supplement to national work and with strong links to EU-level green and circular transition has helped to tear down barriers and support positive operational environments for businesses. Our study suggests that the Nordics can take an even stronger role in cooperating on policies and regulation, facilitating public-private networking and cooperation on public procurement, smart city development, eco-industrial park development, and innovation for a circular economy. Using the Nordic region as a testbed for fast-track implementation of certain policies and practices within key sectors could further strengthen the position of Nordic industries as innovative and sustainable forerunners.

The report was commissioned to Gaia Consulting by the Nordic Working Group on Circular Economy under the Nordic Council of Ministers. The Nordic Council of Ministers is the main forum for official Nordic co-operation, which involves Denmark, Finland, Iceland, Norway, Sweden, the Faroe Islands, Greenland and Åland. The shared vision is to make the Nordic region the most sustainable and integrated region in the world.

The authors Susanna Sepponen, Mari Hjelt and Matleena Moisio are seasoned experts in the field of circular economy. Together with our clients, our consultants help to identify the possibilities of transitioning to a circular economy and to develop new business models based on it.

Read more about the possibilities: Circular Economy | Gaia.fi

Low-Carbon Circular Transition in the Nordics (norden.org)