The circular city in Finland How Finnish cities are promoting a circular transition May 2019 Executive summary initiatives to a framework from the 4 Finland aims to become a global leader field of transition management, which in circular economy by 2025.1 As an studies how policy-makers can influence increasingly urbanized country,2 Finland’s and support system-wide shifts to cities have a central role to play in sustainability. achieving this goal. While the analysis revealed many To investigate the development of urban creative initiatives meant to foster circular economy in Finland, Deloitte circular innovations, such as start-up conducted a study on circular economy incubators and industrial parks, there activity in the country’s six largest cities: were few experiments aimed at Helsinki, Espoo, Tampere, Vantaa, Oulu, disrupting current unsustainable and Turku in figure 1. production and consumption practices. Researchers in transition management argue that both creative ”Circular economy is and disruptive policies are needed for a very , very closely tied to transition to circular economy to occur. emissions reductions. We have to make people see Figure 1. Cities included in the study. For Finland to claim its spot as a global this." leader in circular economy, there are - Interviewed city representative several actions the cities should take:
and developing core capabilities for a 1 We found that the studied Finnish cities circular transition. see strong potential in the circular Broaden the scope of initiatives beyond economy concept. City representatives In the study, Deloitte identified 59 the construction industry to utilize all the see circular economy as a way to such initiatives across the six cities. opportunities for impact available. The efficiently deliver services for We compared the Finnish collection city government has many tools available citizens, while creating new jobs and of circular economy initiatives to for influencing nearly all sectors of the local economy. greenhouse gas reductions at the an international sample from 83 3 same time. cities. We found that Finnish circular experimentation is stronger in 2 To develop the operating model for construction and process industries circular economy, the cities are working and weaker in sharing economy and Launch more social consumption with key partners, such as universities, personal consumption measures. initiatives that involve urban residents. A start-ups, corporations, and inter- greater emphasis on reducing, reusing, city networks, on a variety of pilot Finally, we conducted an analysis to and repairing can bolster a sense of projects throughout various sectors see how likely a full circular transition in community, while creating new job of the economy. In the process, the Finland’s largest cities is, based on the opportunities. Besides, Finnish citizens municipalities and their partners are municipalities’ ongoing circular economy are already more aware of circular 5 building knowledge, raising awareness, work. To do this, we mapped the cities’ economy than their Nordic peers.
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Top drivers of the circular city Implement bolder, more disruptive policies that shake up the current City officials believe circular economy can help them: ways of doing business and give • Meet climate change goals circular innovations room to expand. • Create new jobs and business opportunities Comprehensive circular economy procurement criteria could be one • Provide services to citizens as efficiently as possible example.
2 Circular construction in focus 20 The study identified 59 different initiatives that the largest Finnish cities are taking to advance a circular 6 transition. These projects range from urban food markets and food waste 4 reduction projects to biogas recovery 2 and expanded recycling hubs. 0 To get a broader picture of the cities’ circular economy work, the study broke down the initiatives by industry and 6
circular economy policy tool. Figure 2 Number of identified initiatives 4 displays the share of initiatives under each industry. Here, construction refers 2 to the use of recycled or renewable 0 materials in city developments, and urban planning is related to the use of zoning and public spaces to support circular economy development. Smart city initiatives include the use of digital technologies or sensors in the built environment to promote resource efficiency. Figure 2. Circular economy initiatives by industry in Finland’s six largest cities A large portion of circular economy work so far has focused on construction and urban planning. As construction and demolition waste (CDW) constitutes a large material flow “The city is in charge of urban planning, infrastructure, for cities, and Finland is meant to raise services, public transport, energy, and more. By having the recycling rate of CDW to 70 percent by 2020 in compliance with the EU Waste responsibility for all those things, the city has quite a Framework Directive,6 this emphasis is tool box that it could use for bringing about circularity.” understandable. Nevertheless, steps - Interviewed city representative should be taken to ensure that other potential areas, such as sharing economy and digital infrastructure initiatives, are not forgotten.
3 Falling behind on social consumption When compared to the international These results further confirm that To learn more about the actual actions benchmark, the three most underutilized circular construction is a hot topic being taken to support a circular policy tools in Finnish cities relate to for Finnish cities. The emphasis on economy, the initiatives were mapped the promotion of product repair, industrial symbiosis for industrial and to a circular economy policy framework, measures to reduce disposable waste management companies is also adapted from Petit-Boix and Leipold.3 product use, and waste management an encouraging finding from a job This framework classifies initiatives investment. Each of these further development perspective. according to their specific circular suggests that initiatives meant to economy action, such as energy and boost citizen involvement in circular Taken together, these figures show that heat recovery, water conservation and economy are lacking in Finland, Finnish cities are utilizing a range of reuse, or urban food production. Figure especially compared to the international policy tools to drive a circular transition 3 shows six of the most popular policy context. This is a missed opportunity, in multiple industries. The studied tools among the studied cities. as a recent study by Nordea shows that Finnish cities display comparatively Finns are more familiar with the concept strong experimentation in measures Through this framework, we were able of circular economy than the rest of their related to the construction and other to compare urban circular economy Nordic peers.3 heavy industries. In turn, future work activity in Finland to an international could focus on increasing citizen sample of 83 cities provided in Petit-Boix Finally, the three policy areas where involvement in circular economy and and Leipold.3 This reveals which circular Finland is working the most compared addressing individual consumption economy policy tools are more popular to the international benchmark habits more directly. Indeed, several in Finland than elsewhere, and in which relate to construction and heavy of the interviewed city representatives areas Finland may be lagging behind. industry: land occupation and zoning, expressed hope that social consumption promotion of industrial symbiosis, initiatives could create new jobs and and green construction procurement. boost the community aspect of urban areas.
Six of the most common circular economy policy tools
Policy tool Description Example
Green construction Use of recycled or renewable materials in public Use of recycled materials for the procurement infrastructure projects renovation of Helsinki’s Laakso hospital
Land mass coordination using city lots in Land occupation and zoning Repurposing city lands to support circular economy activity Helsinki to reduce soil waste
Topinpuisto in Turku, a hub for textile Developing industrial parks where businesses can Industrial symbiosis parks recycling, side-stream utilization, and collaborate to close the loop collaborative R&D projects
Välimaa in Oulu, a park for waste Waste management Upgrade to waste management for enhanced recycling management companies to utilize investment industrial side-streams
Investments that encourage a modal shift towards active The new tramway in Tampere Green mobility investment mobility and/or public transportation
The Cleantech Garden program in Espoo, Providing coaching, financing and other support through an ecosystem for business, research and Business support schemes collaboration with businesses education around VTT’s Bioruukki Pilot Centre site.
Figure 3. Six of the most common urban circular economy policy tools in Finland
4 Short on disruption While the study identified many creative opportunity and environmental Finally, we also mapped the initiatives initiatives meant to foster circular performance. The cities are sponsoring to a framework from the transition innovations, such as start-up incubators various initiatives to learn how a circular management literature that explains and industrial symbiosis parks for new economy can be implemented. how policy initiatives, such as green research and development, there were construction procurement, connect to few experiments aimed at disrupting “Things have to be based local innovation systems. This ultimately current unsustainable production shows how policy-makers can have and consumption practices. To truly on markets. It cannot be an impact on systemic sustainability promote a sustainability transition, cities supported by the city - transitions. should give more attention to policy it's not goodwill. That is measures that shake up the current something that I like about The framework defines two kinds of ways of doing business. innovation functions: creative and circular economy: it takes disruptive. The first batch of functions While many potentially disruptive policy into account economic explains how policy-makers tools were found to be outside the realities.” foster niche innovations and new cities’ municipal authority, such as a 7 - Interviewed city representative knowledge, such as a new recycling reduced VAT for repair services), certain method for concrete, while the second measures are available to the cities. At the same time, the cities have batch explains how policy-makers Expanding circular procurement criteria made clear that they cannot drive a can disrupt existing systems, such beyond construction materials could circular transition alone. According to as the practice of landfilling CDW. More be one example, as well as working with the interviewees, the private sector, structural policy interventions from partners to phase out unsustainable from start-ups to corporations, has a authorities, such as financial incentives materials. responsibility to provide the business and regulatory approaches, fall into case for circular innovations. One this disruptive category. Both types are A call for business to step up to the representative simply stated: “The seen to be necessary for allowing a full challenge companies are the ones who provide sustainability transition.4 The results of Finnish cities are excited about circular the solutions. Even if the city is active the mapping can be seen in figure4. economy, seeing it as a development in a project’s early phase, you need model that delivers both economic the companies or else there is no way circular economy will succeed.”
reative u cti s isru tive u cti s 35
30 C1 Knowledge creation, development, and diffusion 2 25 3 4 5 20 6 C7 Influence on the direction of search 5 0 D2 Significant changes in regime rules 3 Number of identified initiatives 4 5
0 2 3 4 5 6 2 3 4 Framework adapted from Kivimaa and Kern (2016)
Figure 4. Circular economy initiatives mapped to functions of creative disruption
055 Don't let it go to waste disrupting old ways of doing business. This study was carried out as a thesis At its core, the circular city is an urban Otherwise, the circular economy project by Nicolas Dolce for the Aalto development model that minimizes opportunity may simply go to waste. University School of Business. material and energy waste of all kinds. It represents a new mindset that unlocks Methodology Contact the potential for fresh business ideas, Data collection for the study included If you would like to learn more about our while delivering environmental benefits. interviews with city representatives and study or circular economy in general, a review of strategy documents. One please get in touch with us: By bringing the private and public limitation is that only projects explicitly sectors together around sustainability communicated as contributing to circular Marika Määttä work, the circular economy concept economy were ultimately included. Sustainability Services presents a rare opportunity. If Finland This means that certain solutions that Email: [email protected] is to become a circular economy leader contribute to circular economy but are Phone number: +358 (0)40 758 2804 by 2025, simultaneously meeting climate already commonplace in Finland may goals and driving economic opportunity, not have been included in the analysis of Lauri Byckling cities and their key partners must initiatives. Clients & Industries Leader broaden the scope of their circular Email: [email protected] economy work, involving citizens while Phone number: +358 (0)40 513 2226
Works cited
1. Sitra. (2019). ”The critical move. Finland’s road map to the circular economy 2.0”. Available at: https://www.sitra.fi/en/projects/critical-move-finnish-road-map-circular-economy-2-0/
2. Takala, Anna and Björksten, Tuomo.. (2014). ”Finland’s flight from the country”. YLE. Available at: https://yle.fi/uutiset/osasto/news/flight_from_the_country_how_finland_moved_from_rural_areas_to_the_cities/7677896
3. Petit-Boix, Anna and Leipold, Sina. (2018). “Circular economy in cities: Reviewing how environmental research aligns with local practices.” Journal of Cleaner Production. 195.
4. Kivimaa, Paula and Kern, Florian. (2016). “Creative Destruction or Mere Niche Creation? Innovation Policy Mixes for Sustainability Transitions.” Research Policy.
5. Nordea. (2019). “Circular economy on the rise”. Available at:https://www.nordea.com/fi/vastuullisuus/artikkeleita/circular-economy-on-the-rise%20.html
6. European Commission. (2008). “Waste Framework Directive: Construction and Demolition Waste”. Available at: http://ec.europa.eu/environment/waste/construction_demolition.htm
7. Orange, Richard. (2016). “Waste not want not: Sweden to give tax breaks for repairs.” The Guardian. Available at: https://www.theguardian.com/world/2016/sep/19/waste-not-want-not-sweden-tax-breaks-repairs
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