3. Policy recommendations and actions for a circular economy in Groningen, Netherlands

In response to the challenges identified in Chapter 2, this chapter suggests some policy recommendations to implement a circular economy in the city of Groningen, Netherlands. The policy recommendations are accompanied by a list of actions for concrete implementation, according to international practices.

    

Introduction

A total of 17 recommendations have been identified accordingly to the role of the city as promoter, facilitator and enabler of the circular economy (Table 3.1). These recommendations are accompanied by a set of actions aiming to support Groningen’s transition to a circular economy. The proposed actions are indicative and based on international practices while taking into account the local context. These international practices carried out in the field of the circular economy by cities, regions and national governments can serve as inspiration for the implementation of the recommendations. As such, they are not expected to be replicated in Groningen but rather provide the municipality with a set of examples for the development and implementation of the suggested actions.

Table 3.1. Policy recommendations for the circular economy in Groningen, Netherlands
Promoter	Facilitator	Enabler
Make the city a role model	Facilitate co-ordination across municipal departments and across regional and provincial governments	Identify the regulatory instruments that need to be adapted to foster the transition to a circular economy
Develop a circular economy strategy	Facilitate practice exchange amongst public, not-for-profit actors and businesses	Identify financial and economic conditions and opportunities for circular economy initiatives
Promote a circular economy culture	Facilitate the connection between businesses and universities	Implement Green Public Procurement
Promote labels and certifications	Establish a single window for circular businesses and support entrepreneurship	Develop training programmes on the circular economy
Create demand by being a launching customer	Strengthen the existing networks to pick the “low-hanging fruits” from co-operation of local businesses	Create spaces for experimentation
	Facilitate the connection between urban and rural areas	Develop an information, monitoring and evaluation system

It is important to note that:

• Actions are neither compulsory nor binding: Identified actions address a variety of ways to implement and achieve objectives. However, they are neither compulsory nor binding. They represent suggestions, for which adequacy and feasibility should be carefully evaluated by the municipality of Groningen in an inclusive manner, involving stakeholders as appropriate. In turn, the combination of more than one action can be explored, if necessary.

• Prioritisation of actions should be considered: Taking into account the unfeasibility of addressing all recommendations at the same time, prioritisation is key. As such, steps taken towards a circular transition should be progressive.

• Resources for implementation should be assessed: The implementation of actions will require human, technical and financial resources. When prioritising and assessing the adequacy and feasibility of the suggested actions, the resources needed to put them in practice should be carefully evaluated, as well as the role of stakeholders that can contribute to the implementation phase.

• The proposed actions should be updated in the future: New potential steps and objectives may emerge as actions start to be implemented.

• Several stakeholders should contribute to their implementation: Policy recommendations and related actions should be implemented as a shared responsibility across a wide range of actors. The stakeholder groups contributing to this report and to the identification of the actions are represented in Figure 3.1. They have a key role as “do-ers” of the circular economy system in Groningen, Netherlands, along with other stakeholders that will be engaged in the future.

Figure 3.1. Stakeholders map in Groningen, Netherlands

Note: This stakeholders map is based on the 30+ stakeholders that took part in 2 OECD missions to the city of Groningen, Netherlands, in February and September 2019.

The city of Groningen can play a role as promoter, facilitator and enabler of the circular economy strategy. Cities act as promoters when they identify priorities, promote concrete projects and engage stakeholders; they are facilitators when fostering co-operation between stakeholders, citizens and levels of government. The city’s enabler role entails setting the necessary conditions for the circular economy (e.g. updating regulatory frameworks, catalysing funds, etc.). In order to boost the circular economy in Groningen, the municipality could implement the recommendations detailed in this section.

Promoting a vision and a strategy for the circular economy

The city of Groningen can play an important role in promoting the circular economy in the city and its surrounding area. It is widely recognised that Groningen, being the biggest city and the only one expecting population growth in the Northern Netherlands region, can play a lead role in the transition from a linear to a circular economy. It is also important for the city to give a positive example to businesses and citizens for the circular economy to happen and to promote behavioural change. The following section presents possible actions Groningen could implement to boost the circular economy.

Make the city a role model

Making the city a role model for the circular economy would trigger behavioural and business change inside and outside the city. The recipe of success consists in taking risks and accepting failures. The municipality should be an example of change and make this an explicit target, while showing the feasibility of the circular transition with concrete actions. The local government should take the initiative of using sustainable products and building infrastructure in a circular manner, e.g. from roads to buildings. This would send a positive signal to the market and would help brand the city with a new image for the whole country, moving out from a natural gas extraction to a circular economy. There are several examples of cities going in this direction and specific actions: Amsterdam Airport Schiphol rents light as a service instead adhering to the traditional model of buying light bulbs. With this model, Schiphol pays for the light it uses while Philips, as owner of all installations, is responsible for performance and durability (Circular Economy Club, 2019[1]) . The city of Tokyo, Japan, aims to rent materials for the celebration of the 2020 Olympic Games, leasing them after the games.

Key actions:

• Apply circular models within the municipality according to the “practice what you preach” principle, such as:

  • Reduce waste generation (e.g. reducing the use of paper or banning single-use plastics such as cups in municipal events and daily activities).

  • Apply the product-as-a-service model through public procurement (e.g. pay for a lighting service adapted to the municipality’s needs rather than buying light bulbs and appliances; lease a furniture service instead of buying specific furniture, etc.).

  • Promote the use of secondary materials (e.g. all public plastic bins must be made of recycled plastics, an initiative already in place in Groningen since 2018).

• Clearly communicate to the citizens the goals and progress achieved by the municipality (e.g. percentage of single-use plastic avoided in one year, etc.).

Develop a circular economy strategy

Developing a circular economy strategy would help define priorities and allocate funds. The strategy would serve to build a strong and global vision and a relevant narrative of the circular economy in Groningen that could ensure co-operation across actors and long-term political buy-in. The strategy would enable the circular economy transition beyond electoral cycles, identifying short-, medium- and long-term goals and actions, with the help of stakeholders, to which the municipality is accountable. Furthermore, it would enhance coherence across existing initiatives, develop deeper knowledge of existing material flows in the city, promote better use of resources and more efficient logistics. Examples of circular economy strategies in cities and regions are presented in Table 3.2.

Table 3.2. Circular economy initiatives at the subnational level
City	Country	Initiative
Amsterdam	Netherlands	“Amsterdam Circular 2020-25” (2019)
Barcelona Metropolitan Area (AMB)	Spain	Circular economy promotion programme AMB circular (2019): i) Industrial Symbiosis Metropolitan Project ii) Platform of Natural Resources iii) Circular Economy Table
Brussels Capital Region	Belgium	Regional Programme for the Circular Economy 2016-20 (PREC)
Flanders	Belgium	Circular Flanders, 2016
Nantes	France	Circular Economy Roadmap Nantes (2018) (Feuille de route économie circulaire Nantes Métropole)
Paris	France	Circular Economy Plan 2017-20 (2017) (Plan économie circulaire de Paris 2017-20)
Rotterdam	Netherlands	Rotterdam Circularity Programme 2019-23
Scotland	United Kingdom	“Making Things Last: A Circular Economy Strategy for Scotland” (2016)
Tilburg	Netherlands	Tilburg Circular Agenda 2019
Valladolid	Spain	Valladolid Circular Economy Roadmap (2017-18)
Source: OECD (forthcoming[2]), The Circular Economy in Cities and Regions, Synthesis Report, OECD Publishing, Paris.

Key actions:

Urban metabolism analysis

• Collaborate with universities to carry out an urban metabolism study for Groningen.

• Evaluate the scale of the analysis at the metropolitan and regional levels, with the collaboration of competent authorities.

• Disseminate the results of the metabolism analysis and clearly communicate them to the public.

• Repeat the metabolism flow analysis after a certain period of time (e.g. a year).

Map existing circular initiatives in various sectors

This will enable the city to frame priorities and actions in the short, medium and long term, as well as identify circular sectors and synergies across them. It would also help to improve existing policies and explore the main gaps. Steps are:

• Collect information on existing “circular economy-related initiatives”, such as projects, programmes and plans in various sectors (e.g. food, waste, water, transport, etc.), which implement for example:

  • Regenerative design.

  • Sustainable production practices based on reducing virgin material extraction.

  • Last-mile distribution practices.

  • Sustainable consumption patterns aiming at reducing waste.

• Explore different ways to conduct the mapping, for example through:

  • An online platform to upload initiatives and register projects in the field of the circular economy. It could take the form of an open-source database to be able to research any aspect of circular initiatives. A communication campaign to reach out to all stakeholders will be needed.

  • Offline platforms, gathering input from stakeholders through regular meetings, surveys, interviews and public consultations.

• Identify the core motivations and benefits of the businesses undertaking these initiatives. Consider the following options:

  • Surveys.

  • Meetings/interviews.

  • Public consultations.

  • Events/seminars.

• Update and share the information collected through the mapping.

Define goals and actions

• Define result-oriented and realistic objectives, and ensure that they are coherent with the national and regional levels.

• Define short-, medium- and long-term targets and sub-targets for the circular strategy (e.g. quantity of circular economy-related projects, number of circular building to be constructed, etc.).

Engage stakeholders

The circular economy is a shared responsibility across stakeholders that need to be involved from the phase zero of the strategy to build consensus and vision. The implementation of the circular economy strategy is not just the responsibility of the municipality. Innovative thinkers and motivated entrepreneurs can be consulted to start pioneering activities for example in the agro-food and bio-economy sectors. Architects, urban planners and representatives from the creative industry sector can help with eco-design and in the construction and demolition fields, etc. Steps consist of (OECD, 2015[3]):

• Designing a participative methodology to engage key stakeholders to work on the definition and co-creation of a shared circular economy strategy that reflects their concerns:

  • Map all stakeholders that have a stake in the outcome or are likely to be affected, as well as their responsibility, core motivations and interactions.

  • Define the ultimate line of decision-making, the objectives of stakeholder engagement and the expected use of input.

  • Use stakeholder engagement techniques, ensuring the effective representation of all stakeholders in the process.

  • Allocate proper financial and human resources and share needed information for result-oriented stakeholder engagement.

  • Regularly assess the process and outcomes of stakeholder engagement to learn, adjust and improve accordingly.

  • Embed engagement processes in clear legal and policy frameworks, organisational structures/principles and responsible authorities.

  • Customise the type and level of engagement to the needs and keeping the process flexible to changing circumstances.

  • Clarify how the inputs will be used.

• Organising communication campaigns and activities in the city to raise awareness among stakeholders on the circular economy’s objectives and benefits and how citizens can contribute.

• Creating participation spaces for citizens and stakeholders throughout the different implementation phases of the circular economy strategy. Instruments that can be used to share the ownership of the circular economy transition with stakeholders include:

  • Multi-stakeholder fora.

  • Workshops.

  • Breakfast meetings on the circular economy.

  • Co-creation methodologies.

  • Feedback loops.

Identify links and synergies

• With existing strategies on climate change, waste and urban plans.

• With the digital sector (e.g. cyber safety, big data and blockchain, and 5G rollout).

Develop a financial plan

• Design a set of actions to put in place the defined objectives, set their expected outcomes and allocate a budget and resources (human and technical) to each of the actions.

• Develop a financial plan for the implementation of the strategy and include it as a part of the implementation process.

• Take into account alternative funding options from all levels of government (e.g. funding to promote the circular economy from the Dutch national Ministry of Infrastructure, the national regional strategies and the SDG implementation programme.

Monitoring, evaluation and communication

• Regularly monitor the progress of the strategy’s implementation; evaluate its impacts to make improvements and communicate the results to the public.

• Explore the available indicators and measurable targets (economic, social and environmental) that can be useful for monitoring the strategy. The indicators proposed by the OECD (forthcoming[2]) can be taken into account:

  Setting the strategy

  • No. of public administrations/departments involved in the design of the circular economy imitative.

  • No. of actions identified to achieve the objectives.

  • No. of circular economy projects to implement the actions.

  • No. of staff employed for the circular economy initiative’s design within the city/region/administration.

  • No. of stakeholders involved to co-create the circular economy imitative.

  • No. of projects financed by the city/regional government/Total number of projects.

  • No. of projects financed by the private sectors/Total number of projects.

    Implementing the strategy

  • Waste diverted from landfill (T/inhabitant/year or %).

  • CO2 emission avoided (T CO2/capita or %).

  • Raw material avoided (T/inhabitant/year or %).

  • Use of recovered material (T/inhabitant/year or %).

  • Energy savings (Kgoe/inhabitant/year or %).

  • Water savings (ML/inhabitant/year or %).

• Clearly communicate the aim and the expected outputs of the strategy.

Promote a circular economy culture

Raise awareness of the circular economy among citizens, businesses and relevant actors and encourage sustainable production and consumption practices would promote a circular economy culture. This can be done through furthering communication (through a dedicated website, communication campaigns, sharing success stories in the media to promote projects and initiatives) and creating spaces for meetings and dialogues. For example, the city of Valladolid (Spain) organises Circular Weekends, during which entrepreneurs connect with one another and join forces on circular projects. Another way to strengthen the circular community would be through “circular economy ambassadors”. The London Waste and Recycling Board (United Kingdom) has started recruiting “circular economy ambassadors” in different companies and local authorities to share the benefits of the circular economy with specific information for each economic sector and to raise awareness in the workplace (LWARB, 2017[4]). In North Karelia (Finland), a regional co-ordination group organises seminars on different topics related to the circular economy in order to raise awareness (OECD, forthcoming[2]).

Key actions:

• Create a dedicated website in order to share knowledge and good practices concerning the circular economy.

• Launch communication campaigns based on success stories and communicate on how citizens and different actors can contribute to it.

• Organise events for knowledge sharing, networking and the promotion of the circular economy at the local level.

• Use social media for quick updates dedicated to circular economy initiatives.

• Promote the creation of a group of businesses focused on the circular economy.

• Promote communications and events for children and students.

Promote labels and certifications

Promoting competition of ideas, awards and certifications for circular economy initiatives would stimulate new ideas and projects and provide implementation support, including funding opportunities and spaces for experimentation. For example, the White Paper on the Circular Economy of Greater Paris (France) includes a proposal to design and use circular economy labels (City of Paris, 2015[5]).

Key actions:

• Consider developing a local label or certification for products, initiatives or organisations that are implementing circular practices in Groningen (e.g. certifications asserting that products manufactured at a local level are produced using secondary materials, etc.).

• Collaborate with universities and research centres to analyse the criteria for circular certifications/labels. For example:

  • Use of recycled materials.

  • Life-cycle analysis.

  • Present a plan for disposal of materials or parts.

  • Extended product lifespan (e.g. long guarantee, reuse of spare parts of a product).

  • Product-as-a-service concept.

• Undertake pilot experiments on circular certificates/labelling.

• Engage in a dialogue with the private sector in order to discuss the development of a local declaration for businesses and organisations to express their commitment with the circular transition.

• Define common guidelines for circular economy products and processes at a local level.

• Promote systematic recognition of good circular practices.

Create demand by being a launching customer

The city can be the first customer to stimulate demand and help business small- and medium-sized enterprises (SMEs), entrepreneurs and start-ups. More specifically, circular design products and technological solutions (e.g. in the recycling processes) need demand for them to be in the market. The local government can stimulate this demand by being the first customer of innovative products and goods. For example, Start-up in Residence (San Francisco, United States) and the Amsterdam Circular Challenge (Amsterdam, Netherlands) connect start-ups and businesses to provide solutions to the city’s problems through transparent selection processes. If the solution provided by a project proves successful, the municipality invests in it or becomes its launching customer. A similar scheme has been adopted by the Dutch national government: through the “Circular Challenge Project”, the government supports financially profitable business cases and can act as a “launching customer” (Ministry of Infrastructure and the Environment/Ministry of Economic Affairs, 2016[6]).

Key actions:

• Define the key challenges that the city would like to address through the possible solutions provided by entrepreneurs, start-ups or companies.

  • Define themes (e.g. related to waste, safety, health, tourism, mobility, technology, etc.).

  • Define steps, procedures and clear rules.

  • Set targets to be reached through the activities.

  • Measure impacts and provide concrete figures.

• Organise a call for projects.

• Allocate the necessary human and financial resources for evaluating and monitoring the selected initiatives.

Facilitating multilevel co-ordination for the circular economy

The municipality can facilitate collaborations and co-operation among a wide range of actors to make the circular economy happen on the ground. The following section presents potential actions.

Facilitate co-ordination across municipal departments and across regional and provincial governments

Co-ordination across municipal department has several objectives, such as: strengthening synergies across municipal departments to avoid duplications, overlaps and grey areas; clarifying the targets and expectations of the circular economy initiatives within the municipality; developing a common narrative throughout municipal departments while aligning targets. Since circular economy-related activities go beyond the city’s burdens (e.g. input and output of energy, resources and material concern the entire region), it is important to create spaces for dialogue and experience exchange, enhancing common actions and learning processes. Co-ordination across levels of government could: address common circular economy-related issues; align objectives between the city and the region that may hamper the achievement of long-term targets; avoid asymmetries or lack of information between the actors at the local and regional levels. There are several international experiences: to foster co-ordination across municipal departments (horizontal), the cities of Melbourne (Australia), Toronto (Canada) and Oulu (Finland) have created dedicated horizontal working groups, while the Metropolitan Area of Barcelona has formed a body for the co-ordination of Barcelona and neighbouring municipalities within the metropolitan area (OECD, forthcoming[2]). Examples of co-ordination across levels of government (vertical) include: the Spanish national strategy creating an inter-ministerial body bringing together the national government, the autonomous regions and the local governments in the Spanish Federation of Municipalities and Provinces (FEMP); and the Brussels region (Belgium) regional programme for the circular economy (2016-20) co-ordinated by three ministries and four regional administrative bodies.

Key actions:

Co-ordination across municipal departments

• Identify how municipal departments can relate to the circular economy in their policies (e.g. public procurement, environment, innovation, etc.).

• Consider appointing a person or a team responsible for co-ordinating the circular economy strategy with a clear mandate.

• Define the co-ordination tools:

  • Ad hoc meetings.

  • Permanent working group on the circular economy.

  • Technical and political board.

  • Inter-departmental programmes.

  • Co-ordination group of experts.

Co-ordination across levels of government

• Set up a co-ordination platform across the municipality, provinces and region for co-operation on circular economy-related policies. The following governance instruments could be considered:

  • Bodies between regional and local authorities can take the form of committees, commissions, agencies or working groups.

  • Ad hoc meetings for city-province-region co-ordination.

  • Co-operation agreements between Groningen, the region, the three provinces and other municipalities in the region for the implementation of joint projects on the circular economy.

  • Joint actions between the municipality and the region, and set up of pilot projects.

  • Roadmap developed together with the region for co-ordination, harmonisation of objectives and implementation.

  • Shared databases and information systems.

Facilitate practice exchange amongst public, not-for-profit actors and businesses

Facilitating practice exchange amongst public, not-for-profit actors and businesses may foster business opportunities and innovation. For example, a dedicated webpage containing information on circular economy-related activities, sectors and stakeholders can represent the basis for possible new collaborations, while raising awareness of existing opportunities. Several cities and regions have developed online platforms to provide: an online portal on the circular economy (Paris, France), waste-related information in real time (North Karelia, Finland) or open data (Toronto, United States). The city of Austin (United States) created a materials marketplace to foster secondary materials exchanges; Phoenix (United States) developed an online zero-waste assistant to provide recycling information to local residents.

Key actions:

• Create a dedicated webpage containing information on circular economy-related activities, stakeholders involved and calls for projects.

• Create an online or offline platform/network to share good practices and challenges for SMEs and entrepreneurs on the transition to a circular economy.

• Monitor development and activities on the online information platform (e.g. number of updates, their frequency, information uses, etc.).

Facilitate the connection between businesses and universities

Facilitating the connection between businesses and universities stimulates innovation. The municipality can be the link between universities, expecting to develop further knowledge on circular dimensions (e.g. in bio-economy and circular design) and the business sector, looking for new specialised employees in specific sectors. The city could develop an “ecosystem” for the circular economy, fostering collaboration amongst universities, businesses and the government, following existing experiences on digital society and healthy ageing (triple-helix collaboration). The municipality can also create the conditions for start-ups to focus on circular economy-related activities, according to the needs expressed by the municipality itself and in collaboration with research centres and labs. It could provide start-ups and scale-ups with access to business partners, ideas, clients, financing and help share knowledge and expertise, build knowledge for a broad understanding of the circular economy and promote pioneering activities and business models. Together with Arizona State University, the city of Phoenix (United States) created a Resource Innovation and Solutions Network (RISN) Incubator for accompanying businesses in the shift towards a circular economy.

Key actions:

• Consider financial instruments to link the private sector with universities. Some examples are:

  • Research and development (R&D) and innovation subsidies.

  • Financial support to create academic spin-offs and for firms to purchase R&D services from certified researchers from universities.

  • Tax breaks and social security exemptions to companies that hire recent master’s/PhD graduates on circular economy areas.

• Explore potential collaborations across business and universities to strengthen the link between the digital sector in the city and the circular economy (e.g. cyber safety, big data, blockchain, and the 5G rollout). Examples applying digital technologies to the circular economy are:

  • Smart sensors to track and monitor material and resource flows in the city (e.g. waste collection data).

  • Digital material passports and digital material exchange platforms in the construction sector, to make materials information clear and accessible, via open-source software. Box 2.3 presents international examples of material passport platforms.

Establish a single window for circular businesses and support entrepreneurship

Establishing a single window for circular businesses and entrepreneurship could aim to offer all services, information and administrative support regarding circular economy projects for businesses, in order to reduce transaction costs for entrepreneurs and SMEs willing to be part of the transition. Although not strictly related to the circular economy, the following experiences could provide examples for potential procedures that could be adapted to the design and implementation of circular economy initiatives. In Romania, the National Trade Register Office (Ministry of Justice) operates a single-window shop (Biroul Unic) for business registration in a period of three days. Hungary has established a central electronic contact point to facilitate starting a business or providing services in Hungary (OECD, 2010[7]). The initiative Start-up Slovenia, established in 2014, aims to raise the level of entrepreneurial talent by developing networks that encourage company growth on international markets, contribute to higher capital accessibility and activate various ecosystem stakeholders. The initiative mobilises a network of mentors from various backgrounds to provide entrepreneurs and young firms with tailored advice (OECD, 2019[8]).

Key actions:

• Define a set of circular services, information and support offered by the single window for circular businesses.

• Clarify the objective of the single window for circular businesses (e.g. offer all services, information and administrative support regarding circular economy projects for businesses).

• Provide information on registration, legal framework and investment climate.

• Provide services to speed up the granting of necessary permits and licenses in a centralised and comprehensive manner.

• Provide specific assistance with registration procedures.

• Support entrepreneurship through tax exemption, when possible, capacity building programmes and clear information.

• Launch incubators to foster knowledge sharing and pilot testing.

Strengthen the existing networks to pick the “low-hanging fruits” from co-operation of local businesses

Strengthening the existing networks to pick the “low-hanging fruits” from co-operation of local businesses could make them an active part of the circular economy transition. The networks (e.g. the Food Network, BUILT-IN Groningen) could include additional actors, generating activities related to the reuse of materials, engagement of local communities, etc. with the support of the municipality, when possible (e.g. space, funds, awareness-raising). In 2018, the city of Amsterdam launched the Circular Hotels Leaders Group (Kloplopergroep). A total of 12 hotels have started co-operating amongst themselves and with actors along their different value chains (e.g. by exchanging knowledge; joint purchasing and bundling of waste streams). In Umeå (Sweden), through the Sustainable Restaurants Network (Hållbara Restauranger), the municipality helps restaurants become more sustainable and, in the long run, makes it easier for Umeå’s residents to consume sustainably when eating out. In 2017, the network started with four restaurants but today involves ten additional ones. The network is also developing a certification to show customers which restaurants are incorporating more sustainable ways of working.

Key actions:

• Identify existing networks, their mission and the link to the circular economy (how they can contribute to the transition).

• Determine local networks’ needs (e.g. space to develop activities, access to funds or raising awareness).

• Provide support to existing networks. Possible instruments could be:

  • Space for experimentation.

  • Networking and platform events.

  • Online platforms for information sharing.

Facilitate the connection between urban and rural areas

The local administration has a key role in facilitating a social and urban-rural dialogue in order to get farmers, SMEs, consumers, businesses and knowledge institutions involved in the circular transition and foster new cross-cutting solutions (e.g. some key sectors are bio-economy, food, biomass, construction, delivery, farming, agriculture, chemistry). This would help foster a territorial approach of the circular economy, integrating rural areas as part of the solution, encouraging regional changes in production and consumption practices, and promoting co-operation experiences between SMEs, consumers and knowledge institutions. There are international experiences advancing towards improving urban-rural connections towards a circular economy. Kitakyushu City (Japan) has established a food-recycling loop between rural-urban areas, while in Tampere (Finland), eco-fellows are co-ordinating rural-urban partnerships related to biogas: they work as a hub that brings together different actors not used to being in contact (farms, power plant operators, logistics, etc.). Since 2016, Start-up Sweden, a boot camp for digital start-ups from rural areas in Sweden, is connecting start-ups from rural areas across the country with the entrepreneurial ecosystem in Stockholm. The boot camp takes place four times a year, with each boot camp providing ten companies with the opportunity to go to Stockholm and expand their networks via contacts with other companies, investors, potential customers and partners (OECD, 2019[8]).

Key actions:

• Establish rural-urban partnerships for creating products, material and service loops (OECD, 2013[9]).

• Create circular loops in the agro-food and bio-economy sector; use of organic waste as fertiliser; last-mile type of food production and distribution, etc.

• Foster collaboration across agro-businesses located in the rural area of the city with universities and research centres. For example: to reduce packaging, use of plastic, use various type of waste as resource; reduce transport form the urban centre to the surrounding area and vice versa.

Enabling the economics and governance conditions for the uptake of the circular economy

Implementing a circular economy entails enabling the necessary governance and economic conditions. As such, the city government could explore the following policy alternatives.

Identify the regulatory instruments that need to be adapted to foster the transition to a circular economy

Clarifying the regulatory framework for circular economy practices and addressing overlaps and gaps in regulatory functions would imply a dialogue with the national, regional governments when responsibility goes beyond that of the municipality. Also, it would be key to identify cases in which regulations (e.g. land use, permits) can be adapted at the local level. The city of Amsterdam (Netherlands) developed tenders for land allocation, primarily for new-build projects (Roadmap Circular Land Tendering (City of Amsterdam, 2019[10])) and supported the creation of a circular neighbourhood, Circular Buiksloterham. Once one of the most polluted areas in the city, it is now turning into a circular area for living and working. The type of innovations and solutions promoted by these experiences in terms of urban planning and land tendering (e.g. circular construction, changing of land use) helped overcome the actual administrative, legal and financial obstacles that they face (City of Amsterdam, 2019[10]). In Spain, in 2013, the city of Barcelona launched the pilot programme called Superblocks to respond to the scarcity of green spaces, the high levels of pollution, the high rate of environmental noise, accident data and sedentary lifestyle. Superblocks are urban cells of about 400 m2 that allow vehicles to circulate only along the perimeter roads, while interior streets are reserved for pedestrians and, under special conditions, certain types of traffic (e.g. resident vehicles, services, emergencies, loading and unloading activities). To do this, land-use regulations and mobility plans have been adapted with the aim of reclaiming public space for citizens, making the city more liveable and reducing pollution and carbon emissions.

Key actions:

• Organise ad hoc meetings or public consultations to build a dialogue across the city council, civil society and private sector to identify the main regulatory and legal barriers and sectors in which actions can be taken (e.g. energy system, second-hand materials, the digital sector, etc.).

• Establish a dialogue with the national and regional governments to identify regulatory instruments that can encourage the transition towards a circular economy, as well as gaps (in particular, when the regulatory and fiscal responsibilities go beyond that of the municipality).

• Share the identified main regulatory barriers and potential alternatives with the regional and national regulatory authorities.

Identify financial and economic conditions and opportunities for circular economy initiatives

Identifying financial opportunities for circular economy initiatives would improve access to funding for circular economy projects in their start-up, implementation and scale-up phases. An option for SMEs would be, for example, to create a scheme to offer subsidised loans or credit guarantees to circular economy companies, in co-operation with private and semi-public financial institutions (e.g. banks, business funds). The idea would be for the municipality/public fund to compensate the financial institution for part of the interest rates or provide guarantees on collateral, to attach a value to the “public good” created by circular economy companies. There are several financial tools, as reported in Box 3.1.

Key actions:

• Liaise with the national government’s departments to clarify existing funding opportunities and with other cities to learn about their experience.

• Create a scheme to offer subsidised loans or credit guarantees to circular economy companies, in co-operation with private and semi-public financial institutions (e.g. banks, business funds).

• Facilitate access to finance and broaden the range of financial instruments for entrepreneurship considering the available funding options and budget capabilities of the city. For example:

  • Traditional instruments: grants, soft loans, loan guarantees.

  • Alternative and non-bank sources of finance: crowdfunding, peer-to-peer lending, business angel networks, venture capital.

Box 3.1. Financing instruments for the circular economy: International practices

There are several initiatives (at the local, national and international levels) that seek to accelerate the transition to a circular economy by improving access to funding for circular economy projects:

• Revolving funds: The city of Amsterdam, Netherlands through the Amsterdam Climate and Energy Fund (ACEF) and the Sustainability Fund invested in more than 65 projects related to climate, sustainability and air quality for a total of EUR 30 million. The revolving funds allow to reinvest revenues within 15 years to fund additional sustainable energy production, energy efficiency or circular economy projects. Each of the funded projects must contribute to the aims of the Sustainability Agenda approved by the City Council in 2015. Regarding the nature of the financing, the ACEF provides funding in the form of loans, warranties and/or share capital, subject to a maximum of EUR 5 million per project.

• Venture capital and growth capital: The London Waste and Recycling Board (LWARB) supports circular businesses through the Circular Economy Business Support Programme. The venture capital fund supports circular economy small- and medium-sized enterprises (SMEs) in various steps of start-up financing and in scaling up businesses that are already in the market. Moreover, the LWARB, through the Circularity European Growth Fund 1 operated by Circularity Capital, seeks investment opportunities in circular businesses with proven cash flow and profit, which need significant capital to scale up.

• Loans and funds: The European Investment Bank (EIB) offers medium- and long-term loans for large scale circular economy projects and indirect financing through local banks and other agents for smaller projects, particularly related to SMEs. Other new circular economy project models can also be financed by the European Fund for Strategic Investments (EFSI),1 and InnovFin2. In 2020, the EIB within the Urban Agenda Partnership for the Circular Economy launched the “Circular City Funding Guide” to provide an overview of available financing tools to cities, businesses and stakeholders wishing to advance towards a circular economy. Different types of financing tools are organised under the following categories: guarantees, equity, debt, grants and alternative funding sources.

• Bonds: Private banks are showing an increasing interest in the circular economy transition. In 2019, for the first time, a private Italian bank issued a “sustainable bond” for circular economy projects (EUR 750 million were allocated to this end). A Dutch bank plans to allocate EUR 1 billion in the next 5 years to finance circular projects with the objective of saving 1 million tonnes of CO2 in 5 years. Selected projects receive an initial circular assessment and are guided in the identification of circular opportunities. The network FinanCE, created in 2014, gathers commercial and public banks and institutional investors interested in supporting the circular transition.

Source: C40 Cities (2016[11]), C40 Good Practice Guides: Amsterdam - Sustainability Fund and Amsterdam Climate and Energy Fund, http://www.c40.org/case_studies/c40-good-practice-guides-amsterdam-sustainability-fund-and-amsterdam-climate-energy-fund (accessed on 6 June 2019); London Waste and Recycling Board (2019[12]), London Waste and Recycling Board Website , http://www.lwarb.gov.uk/ (accessed on 6 June 2019); EC (2019[13]), Improving Access to Finance for Circular Economy Projects, https://doi.org/10.2777/983129; EIB (2019[14]), The EIB Circular Economy Guide Supporting the Circular Transition, http://www.eib.org/attachments/thematic/circular_economy_guide_en.pdf (accessed on 2 August 2019); London Waste and Recycling Board (2019[15]) Circular Economy Investment for Businesses in London, http://www.lwarb.gov.uk/what-we-do/circular-london/circular-economy-investment-for-businesses/ (accessed on 5 August 2019); OECD (2019[16]), OECD Highlights of the 1st OECD Roundtable on the Circular Economy in Cities and Regions, OECD, Paris; Urban Agenda Partnership for Circular Economy (2020[17]), The Circular City Funding Guide, European Investment Bank, https://www.circularcityfundingguide.eu/ (accessed on 6 February 2020); OECD (forthcoming[2]), The Circular Economy in Cities and Regions, Synthesis Report, OECD, Paris.

Implement Green Public Procurement

Green Public Procurement (GPP) is a strategic governance tool to foster a circular transition. Circular economy principles could be included in tenders to stimulate circular building, such as insulation and energy saving, reuse of materials, use of locally produced materials and dismantling options. The cities of Toronto (Canada), Copenhagen (Denmark), Paris (France) and Ljubljana (Slovenia) provide examples of local governments that have started to implement circular economy criteria in their public procurement procedures. The city of Ljubljana included environmental requirements in its tenders as part of the technical specifications, as a condition for determining the qualifications of the provider or as a criterion for selecting the most favourable bid. Paris was one of the first cities to adopt a scheme for responsible public procurement in February 2016. By 2018, 43% of the city’s purchases were linked to the circular economy and 14% of them included “circular economy” criteria. The city of Toronto created the Circular Economy Procurement Implementation Plan and Framework to use its purchasing power as a driver for waste reduction, economic growth and social prosperity (City of Toronto, 2018[18]) In 2016, the municipality of Copenhagen defined a number of environmental criteria for public building and construction projects, such as for resource efficiency, recycling and reuse of materials (Copenhagen Municipality, 2016[19]). The municipal departments planning a building project would need to include at least two alternative materials for each building part when doing the life cycle assessment (LCA). The department will choose constructions with the lowest negative environmental impacts. At the same time, the reuse of old bricks is being promoted thorough public procurement (Salmenperä et al., 2017[20]).

Key actions:

• Include circular standards in the technical specifications, procurement selection and award criteria, as well as in contract performance clauses (e.g. reuse, durability, reparability, second-hand or remanufactured products).

• Adapt the public procurement evaluation system, highlighting the value of social and environmental ratings in comparison with the price criteria.

• Establish clear requirements in tenders in order to foster the quality, maintenance and design of products. Several tools could be applied, such as: life cycle analysis (LCA); eco-label; and eco-design.

Develop training programmes on the circular economy

The development of training programmes in the circular economy, with a sectoral focus on upstream and downstream waste management, agro-food, product re-design, and construction and demolition, in collaboration with universities and research centres, would encourage technical and non-technical capacity building among public officials, stakeholders and citizens. There are several examples of cities that promote training programmes for capacity building and sharing good practices such as the following: the Public Waste Agency of Flanders (OVAM) (Belgium) as part of “Flanders Circular” offers a Masterclass on Circular Economy. In four half-day sessions, participants discover the opportunities for their business in a circular economy. The city of Glasgow (United Kingdom) has organised workshops and events to build capacity and share good practices. The Chamber of Commerce of Glasgow also provides capacity building programmes for businesses aiming at transitioning to a circular economy.

Key actions:

• Review and analyse the required skills and capacities for carrying out all the activities associated with designing, setting, implementing and monitoring the circular economy strategy. This could include the capacity to:

  • Design circular economy plans/programmes that are realistic, result-oriented, tailored and coherent with national and regional objectives.

  • Involve stakeholders in the planning of the circular economy strategy.

  • Ensure adequate financial resources by linking strategic plans to multi-annual budgets and to mobilise private sector financing.

  • Design and use monitoring indicator systems.

  • Carry out evaluations.

• Develop targeted capacity building programmes within municipal departments (e.g. procurement, legislation).

• Develop targeted capacity building programmes for the private sector (e.g. starting with stakeholders from selected sectors).

• Start collaborations with the universities.

• Create tailored educational content on the circular economy concept for schools.

Create spaces for experimentation

Creating spaces for experimentation and sharing benefits as well as costs and risks with stakeholders would provide suitable facilities to test and pilot new circular economy projects, while encouraging collaborations. The municipality could provide experimental spaces that could also be labelled (e.g. Circular Innovation Spaces) to attract stakeholders, such as entrepreneurs and scientists. Since 2010 in Paris, France, the Urban Lab has accompanied more than 200 experiments and consolidated a methodology to support effective experimentation in 4 main stages: i) the definition of the experimental project and its evaluation; ii) a search of the experimental site; iii) the deployment of experimentation; and iv) valuation and transformation. In order to facilitate access to these experimental sites, the Urban Lab has been working for 10 years, in the development of a legal framework that start-ups can refer to for the development of their projects (e.g. a model agreement for using publicly owned spaces for a fixed period of time (Urban Lab, 2019[21]).

Key actions:

• Create spaces for experimentation, such as circular districts; streets, areas or neighbours for circular innovation and pilots; living labs and ad hoc events for co-creation;

• Set rules and objectives for the use of these spaces that can be labelled as Circular Innovation Spaces.

Develop an information, monitoring and evaluation system

Generating an information, monitoring and evaluation system would help reach a better understanding of what the circular economy is and improve policymaking and implementation. For instance, in the case of the building sector, data on material for construction would help understand what kind of materials are used for building and how they can be used in the future (see Chapter 2). Mapping empty buildings would help avoid new constructions and plan alternative use of existing ones; mapping input and output of material flows would help establish priority actions. For the future, monitoring and evaluating the achievement of set targets and goals of the circular strategy in the short, medium and long term, would represent an important feature that would help identify how “circular” the city is and what works, what does not work and what can be improved (Box 3.2).

Key actions:

• Create an information, monitoring and evaluation framework, considering environmental dimensions (e.g. resources, waste and circulation processes), material flows (water, energy, products, food, transportation, information, people) and social aspects (circular jobs created).

• Generate open data sources if possible (e.g. the publication of consistent and up-to-date information about how people and public vehicles move around the city and other forms of open data can boost the development of innovative start-ups).

• Make the most of the 5G rollout in the city by exploring its application as an enabler to circular economy-related activities, adding to the sectors already selected: health, energy, traffic, agriculture and living environment.

• Explore the innovative solutions that big data, the Internet of Things and blockchain tools can provide to the circular economy (e.g. real-time information to make last-mile logistics more efficient).

• Collect information on empty buildings, materials used for construction and waste streams and make it publicly accessible.

• Make inventories of circular economy initiatives and update them regularly.

• Make an inventory of laws and regulations that can foster the transition from a linear to a circular economy.

• Use output indicators to evaluate the results of the strategy (e.g. CO2 emissions saved, raw materials avoided, use of recovered materials, energy savings, etc.).

• Self-assess how “circular” the city is by using the OECD self-assessment framework (OECD, forthcoming[2]) (Box 3.2).

• Incorporate the information system into the online circular economy information platform that should be regularly updated and easily accessible.

• Share with citizens and stakeholders the outcomes of the strategy and the impacts through a website.

Box 3.2. The proposed OECD Circular Economy Scoreboard for Cities and Regions

The proposed OECD Circular Economy Scoreboard for cities and regions consists of a self-assessment of key governance conditions to evaluate the level of advancement towards a circular economy in cities and regions. It is composed of ten key dimensions, whose implementation governments and stakeholders can evaluate based on a scoreboard system, indicating the level of implementation of each dimension (Newcomer, In progress and Advanced).

Table 3.3. OECD Circular Economy Scoreboard for Cities and Regions
	Level of advancement
	Newcomer	In progress	Advanced
Circular economy framework	The city/region is planning to develop a circular economy strategy but has not started yet.	The circular economy strategy is under development.	Existence of a circular economy strategy with specific goals and priorities, actions, sectors and a monitoring framework.
Co-ordination mechanisms	There are no co-ordination mechanisms in place but under development.	Existence of dialogues across levels of government, but not focused on the circular economy.	Co-ordination mechanisms across levels of governments to set and implement a circular economy strategy or initiative are well established and functioning.
Policy coherence	The circular economy initiatives are still not aligned with other related policy areas (e.g. climate change, sustainable development and air quality).	The circular economy initiatives are aligned with some specific related policy areas (e.g. climate change, sustainable development and air quality) but they are still fragmented.	Existence of overall policy coherence between circular economy initiatives and related policy areas (e.g. climate change, sustainable development and air quality).
Economy and finance	No current financial instruments in place but planned.	Existence of a budget dedicated to environmental spending that is foreseen to be used also for circular economy projects.	Existence of a funding programme and economic incentives for circular economy projects with specific objectives, prioritised sectors and a monitoring framework of the outcomes.
Innovation	There are no spaces to test and pilot but planned.	Design of spaces to test and pilot circular economy projects under development.	Existence of spaces to test and pilot circular economy projects.
Stakeholder engagement	Existence of an initiative for the mapping of the most relevant stakeholders in the city/region.	Existence of a dialogue with stakeholders for the design and implementation of the circular economy strategy.	Existence of participation spaces for stakeholders through which input is used for the design and implementation of circular strategies.
Capacity building	Existence of capacity building programmes on green and sustainable economy fields.	Existence of capacity building programmes for activities associated with designing, setting and implementing a circular economy initiative.	Regular capacity building programmes for activities associated with designing, setting, implementing and monitoring the circular economy strategy.
Green Public Procurement	Green Public Procurement is being developed.	Existence of a green procurement model including environmental criteria (e.g. reduction of CO2 emissions).	Existence of a circular public procurement framework (e.g. waste diversion from procurement activities, raw materials avoided and percentage of recycled content).
Data and information	Identification of data on waste management and information campaigns to prevent waste generation.	Existence of data on waste management and information campaigns on the circular economy.	Existence of an information system on the circular economy. Data are publicly available and citizens and business informed of the opportunities related to circular business models and behaviours.
Monitoring and evaluation	No monitoring or evaluation framework in place.	Existence of a monitoring and evaluation framework that includes environmental aspects.	Existence of a monitoring and evaluation framework that includes environmental, economic and social aspects.

According to the self-evaluation, the city/region will identify its own level of advancement toward the transition to a circular economy, identify gaps and set its own targets for improvement. The methodology for self-assessment consists in a scoreboard system that can indicate the level of advancement of circular cities and regions towards the transition. Sub-indicators to better specify each dimension are under development and will be tested in the case studies of the OECD Programme on the Circular Economy in Cities and Regions.

Source: OECD (forthcoming[2]), The Circular Economy in Cities and Regions, Synthesis Report, OECD Publishing, Paris.

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Notes

← 1. For more information: www.eib.org/en/efsi/index.htm.

← 2. For more information: www.eib.org/en/products/blending/innovfin/.