The biggest barriers to the circular industry are within the Laws and Regulations

We desperately need the participation of the business community in the transition to a circular economy, because much of the practical implementation lies with companies.

However, it is currently very difficult for companies to start a circular project. Innovative projects that are desirable in a circular economy are thereby confronted by several interdisciplinary challenges: think of (1) the financial feasibility in a competitive market where usual products are produced with greater efficiency and (2) with more technical practicality, or (3) the social acceptance of new hitherto unknown products and materials. But the biggest, and also one of the first, challenges that hinders a company before any production can take place at all are the laws, regulations and permits required to build and operate a plant.

Casus: Black Bear Carbon – end-of-life recycling of car tires

A recent example is the startup Black Bear Carbon. This recycling company has the ambition and resources to build a new factory in Limburg for the recycling of end-of-life car tires. These “end-of-life” tires will be converted into the materials carbon black and oil. These products can then be used again in the production of new car tires, for example. Carbon black thereby provides the mechanical strength and UV resistance/color of the rubber. But a legal barrier arises here, because on paper the company is a waste processor, which automatically classifies the products made as waste. This has major implications for the future of Black Bear Carbon, which is in danger of getting bogged down within the large body of rapidly changing and specialized environmental legislation.1,2

Figure 1. The recycling of discarded car tires. Source: The Limburger2.

Casus: Rotterzwam – (re)using coffee grounds

Apart from the fact that a (mandatory) VIHB registration documentation had to be present for transporting industrial waste, it was not legally allowed to grow food on coffee grounds (waste) until mid-2021. So this also applied to a few containers of coffee grounds on the cargo bike of the startup Rotterzwam, which already started transporting coffee grounds and growing Oyster mushrooms on this waste stream in 2013.

For transporting, collecting, trading and/or brokering commercial waste, a registration on the national VIHB list is mandatory. This made Rotterzwam the smallest transport company of industrial waste materials in the Netherlands with a ‘fleet’ of one cargo bike. While traditional mushroom growers, who use straw (also a waste stream from the food industry), do not have to meet these requirements.

Similar to the aforementioned case of Black Bear Carbon, there was no legal basis present for the business activities of Rotterzwam until 2021. Unlike Black Bear Carbon, it doesn’t cost millions to grow mushrooms on coffee grounds, and so Rotterzwam could just start doing it, especially since the demand for Oyster mushrooms made it possible. Thus, they have been selling oyster mushrooms for 8 years before submitting an extensive substantiated request to the DCMR Environmental Department Rijnmond at the end of 2020 to make a legal judgement on this.

On Monday 21 June 2021 at 12:03 pm the time had come. Rotterzwam received the decision from the DCMR: based on the information provided by Rotterzwam, it can be concluded that the use of coffee grounds from various holders can be seen as continued use and that there is no question of disposing of them within the meaning of Article 1.1, first paragraph, of the Environmental Management Act, but of continued use.3

It is clear that this is not so ‘easy’ to say for other raw materials, but for natural residual flows such as coffee grounds, many companies could and should have a (temporary) permit on the table tomorrow, if the government is serious about its ambitions.

The discussion

For example, there are many companies for which the regulations are very prohibitive because it is not possible to meet the legal requirements. This has the consequence that many circular projects get stuck and therefore are not implemented.

On the other hand, not every circular project is directly justifiable either and it is good that – up to a certain point – a threshold exists for the reuse of “waste”. After all, it also has to be done in a safe and truly sustainable way. But it seems that the toolbox needed to make these decisions is not sufficiently present. Especially among governments and the competent authorities that grant the permits. These are struggling with a shortage of capacity to supervise applications properly and responsibly. This is not only due to the time available, but certainly also to a lack of guidelines and/or further training needed to properly guide circular project applications.

Transition to a Circular Economy requires social and political action

It is therefore up to the government to more strongly support and also initiate the local opportunities within the transition to circular business management circularity. There are plenty of policy goals set at both the (inter)national level and also locally, but there is often a lack of the roadmaps/guidelines/action points needed to achieve these goals. Also at the European level, it is essential that other countries pursue similar sustainability goals so that the market remains competitive and there are no major contrasts across national borders. But to push all countries in the same direction and to obtain unanimity for this is even more difficult than to achieve at national or local level.

It is good that at EU level work is already being done on the end-of-waste criteria for plastics and textiles, but this development should not be implemented before 2024. Moreover, there is a lot more than just materials within the plastics and textiles sector that need to be considered! Therefore, the Netherlands could already take a lead in this and also extend it to different waste streams, such as for example natural/bio wastes or wastes coming from the largest industrial sectors, such as construction, household goods and automotive industries. Indeed, in the Netherlands, the Environmental Management Act and the Activities Decree do not yet have a specific exception for circular projects either. At the moment the legislation cannot sufficiently facilitate our circular goals for 2030 and 2050.

What is clear, therefore, is that there needs to be change in:

  • The definition of waste: because it still assumes a linear economy, and not a circular one. Companies that want to reuse a secondary raw material or used product are therefore often bound by these linear waste regulations.
  • Supporting circular initiatives: for example, through an interim exemption status for good initiatives.
  • Building and (re)educating the toolbox (not only knowledge!): this should lead to a future where everyday decisions can be made with a circular consideration framework.

What does Ecoras do in terms of laws & regulations?

There are a number of initiatives that aim to change the above mentioned bottlenecks, such as the Legal Platform Circular Economy4. This is implemented by the Hanze University of Applied Sciences in Groningen and Ecoras, in cooperation with various organizations.

Furthermore, circular chains are usually broad and cross-disciplinary: think of the chemical-technical, ecological, economic, social and legal aspects involved around the recycling of rubber tires or other plastics. Therefore, there is a need for the aforementioned disciplines to sit down together more often and work together to solve broad circular challenges. The Transition Center for Circular Plastics will contribute precisely to this with the goal of paving the Dutch road to a fully circular plastics economy by 2050. This center will become part of the broad innovative chemical activity taking place around Chemport Europe5 and Greenwise Campus6

1 (Consulted on 23/02/2022)

2 (Consulted on 05/05/2022)

3 (Consulted on 05/05/2022)

4 (Consulted on 05/05/2022)

5 (Consulted on 05/05/2022)

6 (Consulted on 05/05/2022)