Luxembourg has its sights firmly set on the road to Circular Economy (CE), recently presenting a new strategy for promoting and developing the CE. The topic is also included in the National Research Priorities for Luxembourg, which came into force in 2020. What are potential barriers to Circular Economy? We speak to two researchers about their findings and research on the topic over the last years.
“The recently launched Circular Economy (CE) strategy is an important next step towards a coherent CE policy for Luxembourg. Although it is too early to estimate its short-term impact and long-term effects, it is good to see the coordinated effort of three different ministries and the close dialogue with many stakeholders in the country,” – Prof Christian Schulz from the Department of Geography and Spatial Planning at the University of Luxembourg, who has led a number of research projects on CE.
Why is Circular Economy (CE) important for the future? The keywords are sustainability and zero waste: re-using as much as possible, in different ways.
“If one assumes that a successful transition towards sustainable production and consumption has to simultaneously build on the three pillars efficiency (e.g. of resources and energy use), consistency (e.g. closed material loops) and sufficiency (e.g. setting limits to over-consumption or to particularly harmful technologies or goods), the Circular Economy can play a key role as is looks beyond single products or sectors. It can make sure that products are conceived in a way that single components can easily be reused within the same or by another industry, and that no waste is produced.” – Prof Schulz
Understanding how Circular Economy objectives contribute to transformative changes
What conditions need to be in place to achieve successful Circular Economy? Research on the topic has already taken place in Luxembourg for some time, for example in the team of Prof Christian Schulz at the University of Luxembourg.
The team has worked on several research projects related to Circular Economy, and ask questions including: What are potential barriers to achieving and shortcomings of Circular Economy approaches? As well as answering this question, the team is particularly interested in understanding how the Circular Economy objectives contribute to transformative changes in routines, corporate strategies and decision making of firms, public authorities, and individuals.
“We looked at three sectors that are particularly relevant in both regions: The building sector, the automotive industry, and what we called the ‘community sector’ that is local, civil society-based initiatives and their activities,” explains Paula Hild, PhD researcher on the CIRCULUX project.
What have the researchers discovered so far?
More awareness needed
One finding is lack of awareness, which also gives way to hesitation. The researchers explain that despite years of public debate on circularity – in Luxembourg for example linked to the Rifkin-strategy – awareness of what circularity is, and its benefits, is still mainly limited to some economic, political and scientific actors.
“A large number of entrepreneurs and the majority of the public still seem to have a rather vague or even no particular understanding of the Circular Economy.
“This lack of knowledge, paired with limited financial resources and personnel capacities, makes many firms hesitant as to adopt Circular Economy principles – at the moment,” explains Hild.
The issue of complex production systems
In addition to lack of awareness, the complexity of production systems, and the interdependencies within global value chains, means that for some industries implementing new processes is harder than for others.
“While, for example, the building sector shows remarkable advances in the conception of modular components, recycling of construction material, and regional sourcing of resources (e.g. for wood construction), other industries show less adaptivity. This is most obvious in the automotive sector where supply firms have less liberty in adapting their production methods and product design because they highly depend on their main customers, that is either major car producers themselves or suppliers of main components for the final assemblage,” Prof Schulz explains.
The team also explains that too much focus on technology can be counterproductive. In many areas, particular attention is given to fostering technological solutions, such as smart homes and smart cities: “These can be single-sided, or even counterproductive if the overall material and energy footprint (e.g. of synthetic insulation material or a smart home device) turns out to be higher than its actual effects,” Hild explains.
Next steps: researching the finance perspective
The team is still processing findings from the CIRCULAR project, and has recently launched a consecutive project, AltFin, also supported by the FNR. Together with colleagues from the Luxembourg Institute of Socio-Economic Research (LISER), the researchers are studying the crucial nexus between the financial industry – and its attempts to become more sustainable – as well as the financing demand of Circular Economy-related activities.
“We are currently preparing regional case studies in France (Paris & Région Hauts de France), Germany (Frankfurt/Main & Saxony), and Luxembourg (the financial centre & the country as a whole). We want to find out how ‘green finance’ initiatives can serve the needs of the ‘real economy’, here different types of Circular Economy initiatives in the corporate and the community sector,” Prof Schulz explains.
Sharing insights for maximum impact
To maximise the impact of their research, the team tries to share their insights with policy makers, entrepreneurs, business associations and community initiatives in Sweden and Luxembourg, through focused workshops, bilateral meetings, public conference presentations, social media as well as through publications targeting a wider audience.
“Members of the project team are in steering committees of Circular Economy related projects, participate in strategic consultation processes (e.g. the current ‘Luxembourg in Transition’ project launched by the Ministry of Energy and Spatial Planning) and are frequently asked to give advice to new initiatives in the public and private sector,” Prof Schulz concludes.
Circular Economy: Part of Luxembourg’s National Research Priorities
The ‘National Research Priorities for Luxembourg in 2020 and beyond’ were approved by the Luxembourg Government in 2020. Circular Economy is part of the priorities, mentioned specifically in respect to green finance, energy and from waste to product.
Read more in Luxembourg’s National Research Priorities [page 17]
New Government Circular Economy strategy for Luxembourg presented in February 2021
On 8 February 2021, the Luxembourg Government presented a new strategy for promoting and developing the Circular Economy in the Grand Duchy. The objectives: to accelerate the implementation of the Circular Economy and to position the country internationally as a centre of expertise in the field.
When the Government presented Luxembourg’s new CE strategy, it was said that the rapid expansion of the Circular Economy is a necessary condition for succeeding with national strategic efforts to fight the climate crisis, protect resources and promote sustainable finance. The strategy provides Luxembourg’s key sectors with a toolbox to bring together public and private players, and to develop the vision through concrete projects.
The strategy was jointly developed by the Ministry of Energy and Spatial Planning, the Ministry of the Economy, the Ministry of the Environment, Climate and Sustainable Development and the Ministry of Finance.
Read more about Luxembourg’s Circular Economy strategy
Publications resulting from the CIRCULAR and CIRCULUX projects (free download)
Schulz, Christian; Hjaltadóttir, Rannveig; Hild, Paula (2019): Practising circles: Studying institutional change and circular economy practices
Taylor Aiken, Gerald; Schulz, Christian; Schmid, Benedikt (2020): The community economies of Esch-sur-Alzette: rereading the economy of Luxembourg.