3. The 3Ps framework: People, policies and places

The 3Ps (people, policies and places) framework provides a conceptual framework to make circular economy happen in cities and regions.

People are at the centre of a cultural shift towards new business and governance models within a circular economy. The circular economy is a shared responsibility across levels of government and stakeholders. The business sector can determine the shift towards new business models (e.g. using secondary material, recycling, sharing, etc.). Knowledge institutions contribute to boosting innovation and research. Not-for-profit organisations are at the core of bottom-up initiatives in a wide range of sectors, such as food and the built environment, to raise awareness and build capacities. The role of these stakeholder groups is described below.

The circular economy requires a holistic and systemic approach that cuts across sectoral policies. As somebody’s waste can be someone else’s resource, the circular economy provides the opportunity to foster complementarities across policies, such as environmental, regional development, agricultural and industrial ones.

Adopting a functional approach going beyond the administrative boundaries of cities and regions is important for resource management and economic development. Cities and regions are not isolated ecosystems but spaces for inflows and outflows of materials, resources and products, in connection with surrounding areas and beyond. Therefore, linkages across urban and rural areas (e.g. related to agriculture and forestry) are key to promote local production and recycling of organic residuals to be used in proximity of where they are produced and avoid negative externalities due to transport. At the regional level, loops related to a series of economic activities (e.g. to the bioeconomy) can be closed and slowed.

The below sections will report on the main actors (people), sectors (policies) and scales (places) that have been flagged during the OECD Policy Dialogues on the Circular Economy in Cities and Regions (OECD, 2020[1]; 2020[2]; 2020[3]) and on-going in Glasgow (Scotland), Granada (Spain) and Ireland and through the OECD Survey on the Circular Economy in Cities and Regions (2020[4]).

A wide range of stakeholders is involved in the circular economy. Surveyed cities and regions have involved or plan to include in the design and implementation of their circular economy initiative different type of stakeholders. As several actors have divergent objectives in moving towards the circular economy, it is important to motivate stakeholders towards common aims and create incentives and framework conditions for building synergies at the right scale and minimising future liabilities for society at large. The business sector is one of the key players: the transition towards a circular economy will depend on its capacity to shift towards more sustainable business models (e.g. using secondary material, recycling, sharing, etc.). Citizens, on the other hand, make constant consumption choices and can influence production. Figure 3.1 reports the stakeholders’ group that participated in the OECD Policy Dialogue on the Circular Economy in Cities and Regions and that are likely to contribute to the transition towards a circular economy in the city of Umeå, Sweden. Respondents of the survey have identified the stakeholder groups contributing to development and implementation of circular economy initiatives, as follows: the business sector (80%), the scientific and academic sector (76%), producers and citizens (73%), non-governmental organisations (NGOs) and suppliers (65%), service providers, designers and contractors (63%) (Figure 3.2).

Several national, regional and local circular economy strategies in place recognise the role of SMEs in the transition to a circular economy, as stated in the Dutch, Finnish and Slovenian roadmaps. Small- and medium-sized enterprises (SMEs) have been implementing resource efficiency measures, such as minimising waste, saving energy, water and materials, recycling and reusing materials or waste, while offering green products and services (24% in the EU28, (EC, 2018[5]). Different levels of government can actively support SMEs by: offering them an environment conducive to development (SITRA, 2016[6]); assisting them in developing projects (Government of the Republic of Slovenia, 2018[7]); and channelling financial resources (Dutch Ministry for the Environment and Ministry of Economic Affairs, 2016[8]). In Greece, where the circular economy is part of the country’s growth strategy, actions include improving knowledge and linking entrepreneurship and social economy with technological innovation. In Glasgow, the chamber of commerce supports businesses of all sizes interested in a circular economy, through capacity building, co-operation and signposting to finance within the Circular Glasgow Initiative (Box 3.1). Some enabling conditions are key for SMEs to become more circular, such as: cutting red tapes and adapting regulation to innovation (e.g. including smart product design in the European Union [EU] package on circular economy); increasing co-operation across the value chain from design to end users; and innovating governance and finance.

Innovative businesses and start-ups can benefit from incubators to develop circular-related projects through access to finance, capacity building and collaboration. In Umeå, Sweden, incubators are specialised in five main areas: new business models support (Uminova Innovation), creative industries (eXpression Umeå), life sciences (Umeå Biotech), young start-ups (BIC Factory) and sharing economy (Coompanion Nord). Each incubator provides guidance and support (e.g. access to finance, offering training, networking). There is a demand by the municipality to include circular economy projects in the core activities of the incubators while enhancing circular upgrading (valorisation and new business opportunities). Since 2017, the city of Paris, France, launched a circular economy incubator, Paris & Co. The incubator merges big and small companies and start-ups to promote innovative sustainable solutions for the city and enhance the science-industry co-operation (Paris&Co, 2020[11]). In Groningen, Netherlands, the Circular Economy Hub is an incubator for small businesses and start-ups, and as an information centre, repair hub and second-hand shop. The city of Granada, Spain, is part of the “OnGranada technological cluster”, created in 2014 by the Business Confederation of Granada, involving private and public sector members (municipal, provincial and regional governments) alongside the university, the chamber of commerce, information and communication technology (ICT) business associations and unions. The cluster is incorporating the circular economy as a new area of specialisation, with a focus on waste reuse and resources efficiency (e.g. optimising the use of water in plant cultivation and irrigation through injections; or seeking to recover waste from olive production to convert it into biofuels) (OECD, forthcoming[12]).

Industrial symbiosis is a way to promote business collaboration and identifying business opportunities. The metropolitan Agency of Barcelona (Spain) designed a Metropolitan Industrial Symbiosis Program that acts as co-ordinator of industrial symbiosis and circular projects while offering municipalities and companies the tools and services for the concentration of data, information and knowledge generated in each of these projects. The Eco Parks in Kitakyushu, Japan, allow recycling waste while producing energy, saving water and creating new business opportunities. In Sweden, the roadmap for industrial symbiosis connects with the urban symbiosis. While the industrial symbiosis allows resource exchanges across companies, urban symbiosis looks at mutual and beneficial exchanges of resources within urban areas and across industries.

Business networks can create synergies within a circular economy. The Network for Sustainable Construction and Real Estate Management in Cold Climates (Nätverket för hållbart byggande och förvaltande) launched by the city of Umeå, Sweden, in 2008 brings together 55 members from all segments of the construction supply chain. Sustainability and the circular economy are key topics for the monthly breakfast meetings and at the annual member meeting (Network for Sustainable Construction and Real Estate Management in Cold Climates, 2013[13]). The network has enabled the creation of a public-private partnership PPP to develop, by 2024, the new Tomtebo Strand city district, which incorporates circular economy principles in its structural plan (Municipality of Umeå, 2019[14]). The Sustainable Restaurants Network (Hållbara Restauranger) involves 14 restaurants in the city for sustainable practices in the food industry and food waste management. On a wider scale, the North Sweden Cleantech is a regional innovation platform focusing on exporting green technology, clean energy and sustainable solutions through business support and networking. A hundred companies are currently part of the platform. Since 2016, the platform has been organising circular economy capacity building events (North Sweden Cleantech, 2019[15]). In Ireland, the National Platform for Circular Manufacturing Initiative 2020-22, CIRCULEIRE, is the first cross-sectoral industry-led innovation network dedicated to accelerating the zero-carbon circular economy. It is a PPP de-risking and delivering circular business model innovation. The Irish Manufacturing Research (IRM) in collaboration with its strategic partners, the Department of Communications, Climate Action and Environment (DCCAE), the Irish Environmental Protection Agency (EPA), and EIT Climate-KIC and 25 industry members are leading the platform. Some of the sectors involved are: building, furniture, packaging and material reprocessing companies. The programme has a dedicated innovation fund designed to foster cross-sectoral systems integration projects (Irish Manufacturing Research, 2020[16]).

Social enterprises also have an important role to play in the circular transition. They can provide alternative and sustainable business models, empowering people and local communities (Box 3.2). Some examples of circular activities include employing vulnerable people or people with physical, mental or psychological difficulties for repairing, packaging and assembling products and creating eco-products from waste (Robedrijf in Rotterdam, the Netherlands; NGO Cais, Lisbon, Portugal); micro-entrepreneurship for informal waste pickers (Triciclos, Santiago, Chile) (Brown, 2020[17]). Quillota, Chile, launched in 2019 an initiative called EcoModa to promote women entrepreneurship while reaching social-related objectives. It aims to create opportunities for female entrepreneurs, from vulnerable areas of the city, through training on eco-technological techniques to reuse and recycle clothes that can be later sold in local markets.

Academia and research centres contribute to creating technical and non-technical knowledge on the circular economy. Knowledge institutions are working on eco-design, bioproduction processes, modular buildings, etc. For example, in Spain, the University of Valladolid (UVa) and the Technological Agricultural Institute of Castile and León (Instituto Tecnológico Agrario de Castilla y León, ITACYL) collaborate on bioeconomy research projects, while a project on the circular economy is underway. In Sweden, the Umeå University School of Architecture has included the circular economy in its sustainable urban development master courses. The municipality of Groningen, Netherlands, the business association WEST and the province of Groningen co-operate within Campus Groningen, one of the biggest campuses in the Netherlands to promote innovation in the energy transition, artificial intelligence, health and, in the future, the circular economy.

NGOs often carry out capacity-building programmes and raise awareness on circular economy practices. The Umeå branch of the NGO Cradlenet Norr, founded in 2015, organises bi-monthly meetings to raise awareness of circular economy issues, discusses challenges with different stakeholders (e.g. SMEs, municipal authorities, business coaches, university researchers and students), organises specialised field visits and participates in international events and platforms on the circular economy. During 2018 and 2019, the Federation of Neighbourhood Associations of Valladolid (Federación de Asociaciones Vecinales de Valladolid) created an online circular observatory to share information on the circular economy and monitor citizens’ level of engagement. The organisation also developed an online “monitoring game” to promote reuse, raise awareness on the circular economy and signal the location.

Services operators in surveyed cities are moving from providers to promoters of more integrated initiatives interconnecting water with waste, energy, land use within the circular economy approach. Waste and wastewater utilities are in some cases the main agents developing circular economy activities in cities or are important partners in circular economy projects. This is the case of the London Waste and Recovery Board (LWARB), which utilises its own funds to deliver a suite of circular economy programmes, or the Maribor (Slovenia) utilities, which funded the WCYCLE Institute, a major bolster to the circular economy in the area. Within the scope of their circular activities, utilities often focus on recovering and reusing materials from waste and wastewater, reducing emissions and investing in soil management and brownfield development, in addition to their traditional waste collection and recycling services. Utilities and service providers in the cities surveyed follow different management models, including PPP models, in the case of the Barcelona Metropolitan Area (Spain) or Austin (USA), almost completely or completely owned by the municipality and surrounding suburban areas, as in the case of Lappeenranta, Finland or Ljubljana, Slovenia.

One of the utilities’ actions within the circular economy consists in the recovery of nutrients, materials and resources from waste for reuse. For example, the urban wastewater treatment system managed by the municipality of Milan, Italy, specialises in the reuse of wastewater for irrigation, thus reducing the amount of drinking water used and guaranteeing agricultural companies a quality resource. In the city of Granada, Spain, the public-private water utility company transformed the concept of a wastewater treatment plant into a bio-factory by producing energy and new materials (Emasagra, 2019[20]) (see section on “Water” below).

Soil management and brownfield development have been areas of recent development by surveyed utilities. In the region of Flanders, Belgium, the Public Waste Agency of Flanders (OVAM) is working to integrate circular principles in permits and policy instruments such as brownfield reconversion agreements between authorities and utilities. Pilot Back in Circulation (Terug in Omloop) projects are being developed to encourage new policy principles such as the circular economy and creating greater links between urban transformations, economic transition and integrated soil remediation. 

To engage the wider society in circular economy activities, utilities often invest in communication strategies to educate the public on their activities and environmental impact. Starting in 2013, the service operator in Ljubljana, Slovenia, launched a series of consumer-oriented initiatives and facilities for repair, reuse and exchange. This initiative focused on actions and measures for waste prevention (especially food waste) and responsible consumerism such as through the “Get used to reuse” initiative, which uses song, videos, posters, container stickers, events and workshops in district communities for educational and social purposes. Two of the main goals of the Intermunicipal Waste Management Service of Greater Porto (LIPOR), Portugal are to expand the knowledge about the concept of circular economy (SPEED UP programme) and provide technical knowledge of circular economy dynamics, with specialised integrated training (SCALE UP programme).

Utilities collaborate with other stakeholders to promote circular projects. The city of Prato, Italy, signed an agreement to co-operate closely with waste, water and energy operators and the University of Prato to investigate new operational, innovative and technical actions within the circular economy paradigm. In the case of Munich’s Waste Management Co-operation (AWM), Germany, the Halle 2 project involved developing synergies between waste collection and reuse opportunities by opening a second-hand store in 2016, funded by waste collection fees. AWM aims to increase the volume of re-sold items by 100% through information campaigns and stronger co-operation with local companies so that it can eventually cover the annual rent and staff costs of through sales revenue. The Halle 2 project was developed through co-operation agreements with local social enterprises that offer both the specialist expertise needed for the store’s repair and reuse services and the employment and training opportunities key to the project’s vision. It also worked with educational and community organisations to create activities that would encourage people to be more environmentally aware and active. The Barcelona Metropolitan Area (Spain) is progressively putting in place various projects within the Green and Circular Economy Driving Programme for the Metropolitan Area of Barcelona (2019[21]) (2019), such as the Circular Resources Platform (online platform bringing together professionals working on circular economy topics, good practices taking place in the metropolitan area, aiming to connect them with the local industrial sector) and the Circular Economy Group, a space to co-ordinate strategies and promote collaborative work between different municipalities, administrations and private actors.

Municipal utilities participate in regional, national and international circular economy strategies, in addition to their local outreach. For example, the Helsinki Region Environmental Services Authority (HSY) in Finland provides waste management services for the cities in the capital region and also participates in the city’s work on a roadmap for the circular and sharing economy, in addition to taking part in regional and international circular economy projects. The city of Lappeenranta, Finland, promotes the circular economy via the Greenreality Network, a network of energy and environmental companies operating in the South Karelia region by creating growth and new business opportunities for its members as well as the entire area. The network also includes municipalities of the area as well as research and educational institutions. It is co-ordinated by the city of Lappeenranta. Puhas Ltd., the main waste collection and services utility in Joensuu, Finland, is a local partner in the Finnish project Circwaste, which promotes efficient use of material flows, waste prevention and new waste and resource management concepts, which is funded by the EU LIFE programme. Still in Finland, the city of Oulu is promoting new circular economy businesses by developing new circular economy park Välimaa for several operators and companies. The municipal waste company, Kiertokaari Oy, is boosting circular economy business in the Ruskonniitty area (previously, one of the pilot areas in the CircHubs project). In the Greater Porto Area, Portugal, LIPOR implemented an IMPACT ON project to boost the integrated dynamics of circular economy at the local and national levels by aligning its strategies with the global priorities of the Sustainable Development Goals (SDGs), addressing 11 of the 17 SDGs of the United Nations (UN) Agenda. After this first mapping in 2017, for each one of LIPOR’s materially relevant topics, the corresponding SDG was identified, as well as the respective projects within its sustainability agenda.

Almost all the respondents of the OECD survey (2020[4]) identify the waste sector as key for the circular economy (98%), followed by the built environment (75%), land use and spatial planning (70%), food and beverages and water and sanitation (65%) (Figure 3.3). Table 3.1 shows the list of the sectors included in the ongoing circular economy initiatives in cities and regions that took part in the OECD survey (2020[4]). The following section will describe these five sectors in depth.

Making a sector “circular” implies rethinking value chains and production and consumption processes. Often the circular economy in cities and regions is seen as a synonymous of waste recycling but it is more than that. Common characteristics of various activities going circular are the following: making products and goods last longer through better design; producing products and goods using secondary and reusable material, and renewable energy while reducing atmospheric emissions; distributing products within short miles and consuming them consciously and sustainably; and transforming waste into a resource.

Cities produce 50% of global waste and it is estimated that globally, by 2050, the levels of municipal solid waste will double (UNEP, 2013[22]; UNEP/IWSA, 2015[23]). As a consequence of the growing population and urbanisation rates, annual waste generation is expected to increase by 70% from 2016 levels to 3.40 billion tonnes in 2050 (World Bank, 2019[24]). Without improvements in the sector, solid waste-related emissions are anticipated to increase to 2.6 billion tonnes of CO2-equivalent by 2050 worldwide (Kaza et al., 2018[25]). Municipal solid waste represents a small share of total waste generated (about 10%) but its management and treatment often require more than one-third of public sector financial efforts to abate and control pollution (OECD, 2019[26]). In 2018, in the OECD area, the average waste per capita per year generated was of 525 kg: 20 kg more than in 1990 but 35 kg less than in 2000 (OECD, 2019[27]).

While recycling is projected to grow, the share of a landfill in municipal waste treatment remains high in OECD countries. Recycling is expected to become more competitive compared to the extraction of primary materials. However, its share remains ten times smaller than the share of mining (OECD, 2019[28]). Data from 2018 in OECD countries show that in terms of municipal waste, recycling is the second-largest method of treatment (26%), after landfill disposal (39%). Some countries recycle more than one-third of the municipal waste they manage (e.g. Belgium, Germany, Korea, Slovenia). The share of municipal solid waste landfilled in the OECD area decreased from 63% to 42% between 1995 and 2018 (OECD, 2019[27]).

Circular waste implies a series of upstream and downstream activities to prevent waste generation and transform waste into resources, amongst others. A circular waste management system is one where waste generation is prevented; the disposable model is replaced by a recovery one; a market for secondary raw materials is in place and secondary materials would satisfy a prominent percentage of the demand of materials for goods production. A circular waste system would develop and commercialise technology to identify, sort and deliver high-quality raw material. Digitalisation and data management should connect products with waste handling (e.g. through the IoT, labelling, etc.) and the design and production phase should take into account feedback from waste handling and extend the life of products and goods.

Plastics is a key sector for several surveyed circular economy strategies and initiatives. A total of 95% of plastic packaging material value is lost in the global economy annually (around EUR 70-104 billion) (Ellen MacArthur Foundation, 2017[29]). As part of the transition towards a more circular economy, the EC adopted in January 2018 “A European strategy for plastics in a circular economy” (Box 3.3). Many cities are putting in place initiatives to support product design, reuse and recycling. The city of Helsinki, Finland, launched in 2019, the Closed Plastic Circle to develop tendering processes that include criteria that promote the increase of plastic recyclability and its recycling share. The aim is to: create efficient and functioning recycling and collection services for different plastic streams (plastic that is currently not sorted and collected from households or plastic waste produced on construction sites and in service industries); find users and refiners for the collected plastics; and strengthen the recycled plastic markets (Smart Clean, 2019[30]). The Environmental Protection Agency (EPA) in Ireland through the Small Business Innovation Research (SBIR) calls upon companies to find innovative solutions for soft plastics (e.g. packaging). In 2015, LWARB and WRAP, in London, United Kingdom, set up Resource London, a collaborative programme to support London boroughs in their provision of waste and recycling services (e.g. collection of plastic tubs, pots and trays as well as plastic bottles to create harmonisation across the city, contributing to and learning from the Global Plastics Protocol) (LWARB, 2017[31]). The Intermunicipal Waste Management of Greater Porto (LIPOR, Portugal) in 2018, signed a voluntary commitment to circular economy principles and the “Vision for the Circular Economy of Plastics” commitment to enhance technical knowledge and boost integrated dynamics of circular economy at the local and national levels (Impact On) (LIPOR, 2018[32]).

Some surveyed cities focus on the zero-waste concept in their pursuit of the circular economy. For example, Phoenix created Reimagine Phoenix to increase the city’s waste diversion rate to 40% by 2020; Austin is advancing towards zero waste through the Austin Resource Recovery Master Plan; and San Francisco aims by 2030 to reduce municipal solid waste generation by 15% and reduce disposal to landfill and incineration by 50%. Phoenix has identified the transition to the circular economy as one of the three main actions to move toward zero waste by 2050. These are: expanding the current recycling programme to remove commonly recycled products from the waste stream (and reducing the number of non-recyclable products from the recycle bins) through public education and awareness campaigns; increasing the number of products recyclable by incubating local businesses to capture new products from the waste stream (e.g. organic waste); and supporting the transition to a circular economy and encouraging the retail industry to provide products that are either 100% recyclable or able to be repurposed at end of life. Austin’s Master Plan includes a chapter on reuse and a chapter on economic development, which called for a partnership with the city’s Economic Development Department to create green jobs through zero waste, create local end markets for recycled materials, support reuse, promote all forms of waste reduction (not just recycling) and encourage both consumer and business behaviour change to support circularity. San Francisco’s Zero Waste Program facilitates the reuse of surplus city-owned material within the government sector and donations to NGOs and schools, and promotes food waste prevention and recovery technologies to facilitate the donation of surplus food.

The waste sector holds challenges and opportunities towards increased “circularity”. A number of actions are likely to accelerate the circular transition, from removing harmful subsidies, providing risk-sharing financial instruments (European Union, 2019[35]), but also applying incentivising schemes for separate collection and recycling, such as the pay as you throw system, or differentiated tariffs. Nevertheless, there is a general lack of information and data. In many countries and cities, information remains insufficient to monitor total waste streams, their recovery and the use of secondary raw materials in the economy (World Bank, 2018[36]). Many stakeholders flag that there is uncertainty around the concept of waste and how materials can be reinserted in production processes when they are still reusable but, by law, they are qualified as “waste”. In addition, roles and responsibility in the sector are highly fragmented, creating overlaps, gaps and mismanagement.

The building sector is responsible for 39% of all carbon emissions worldwide (World Green Building Council, 2017[37]; Ellen MacArthur Foundation, 2020[38]). Demographic and economic growth, increasing income levels associated with the growing demand for goods, services and housing represent a challenge but also an opportunity to make the sector more circular, reducing its carbon footprint. The circular economy can contribute to reducing the sector’s CO2 emissions by minimising material use and maximising reuse.

Circular building is different from sustainable building: the circular way of building consists of rethinking upstream and downstream processes to minimise waste production and maximise resource use. It also implies new forms of collaborations amongst designers, constructors, contractors, real estate investors, suppliers of low- and high-tech building materials and owners, while looking at the life cycle from construction to end of life. Key phases can be identified as follows: planning, design, construction, operation and end of current life (Stronati and Berry, 2018[39]).

  • Planning in a circular way implies considering the entire lifecycle of the asset, including alternative use through repurposing and reassembly. Examples are modular approaches so that materials and buildings’ blocks can be easily dismantled and reused. The city of Amsterdam, Netherlands, applies smart design for buildings more suitable for the repurposing and reuse of materials and improves efficiency in the dismantling and separation of waste streams to enable high-value reuse and to create a resource bank and marketplace where materials can be exchanged between market players (Circle Economy et al., 2016[40]). The city of Prato, Italy, conceives the circular economy in the built environment sector as a means to “rethinking the city”. The objectives are to: create new economic and social opportunities without consuming new resources and green land (following the paradigm of the “zero volume” growth); improve the environmental performance of buildings and infrastructures in their entire life cycle; propose new urban scenarios in line with the most recent regional legislation addressed to the limitation of agricultural land consumption.

  • A proper design in the project phase takes into account the material choice, the consumption of water and energy in buildings to reduce consumption and minimise waste and possible reuse of buildings. The Public Waste Agency of Flanders (OVAM, Flanders, Belgium) in collaboration with the Walloon Public Service (SPW) and Brussels Environment Agency (Brussels Environment) developed an online open-access calculation tool called “Tool to Optimise the Total Environmental Impact of Materials” (TOTEM). The TOTEM helps architects, designers and builders to assess the environmental impact of building materials to increase the material and energy performance of buildings (Wille, 2013[41]). Amsterdam, Netherlands, promotes circular area development in urban design, an integrated approach to construction, including climate-proof infrastructure, with special attention paid to closing cycles.

  • The choice of materials for the construction phase entails identifying more sustainable materials and minimising the variety of materials used. In the city of Paris, France, besides meeting all mandatory requirements established in the NF HQE Base, a certification for the construction sector, to be considered circular, construction projects should reach at least 40% of the points established in a “circular economy profile” (e.g. inclusion of a waste management plan, use of recycled materials, development of life-analysis calculations, eco-certification of wood, considering deconstruction processes, establishing synergies with local actors in the surrounding areas, among others) (HGB-GBC, 2017[42]). Material passports and material banks can foster reuse of construction materials and provide constructors and clients with reused materials (Box 3.4).

  • The way a site is operated and run also has a direct impact on the circularity of a project. The operation phase concerns the use of energy sources and embedded technologies in buildings to enhance resource efficiency. The operation also includes data and innovative technologies as enablers to extending the life assets, which delay the shift towards a second life or the end of life. For example, Paris, France, recovers heat from wastewater to heat and cool public buildings and has also developed a network of non-potable water users to optimise water consumption. Maribor, Slovenia, has deployed a spatial analysis of the use and production of heat in the city to optimise energy use.

  • The end life of a building would create a new life for the waste material produced. Three levels of circularity can be identified: repurpose an existing asset, components and materials with no major transformations and in the same location; reuse an existing asset for the same purpose, but in a different location; reuse of components and materials of existing assets, in the same and different location (Stronati and Berry, 2018[39]). Particular attention is paid to spatial planning, given the city’s relatively strong role as a commissioning authority for public space and in the realisation of its own accommodation and the granting of permits for construction and demolition.

Idle capacity of buildings should also be considered for better use of resources. In cities, a number of dismissed buildings can be used as a testbed for the circular economy experimentation or can have a second life, avoiding new constructions. Consumer behaviours are also changing the way spaces and buildings are used. Typically, with the increasing use of online shopping, high streets are rethinking their purpose. Empty buildings in the city centre can have an alternative use for social activities. A dataset on empty buildings can help to map these available spaces. In Groningen, Netherlands, a project of using the disused sugar factory aims to create a “zero-waste” neighbourhood: The De Loskade is projected to be a “removable” and “short stay” neighbourhood. As a “pop-up” neighbourhood, temporary properties will be dismantled after the rental period that ends in 2030 and rebuilt in other areas. Extensive pilots and testing are taking place at De Loskade, for example gas-free installations and off-the-grid and energy-efficient homes (Municipality of Groningen, 2019[45]; Van Wijnen, 2019[46]).

Land use and spatial development policies have critical importance in creating more sustainable cities (European Environment Agency, 2015[47]). Carbon emissions and energy consumption are closely linked to the urban form, as several key sectors related to urban density have a considerable impact on energy consumption (e.g. transport and building sector) (Kamal-Chaoui and Robert, 2009[48]). Cities have an important role to play, as while the demand for energy continues to keep an increasing trend, there are opportunities to expand or replace energy infrastructures with renewable energy technologies (IEA, 2009[49]). Circular spatial planning policy should aim to shape the physical structure of a city in order to support local circular material flows. Urban planners should take into account the spatial and infrastructure requirements that circular economy activities (reuse, collection, distribution or resources and material flows) could have in each relevant sector (water, bioeconomy, built environment, recycling) (Ellen MacArthur Foundation, 2019[50]).

Cities can use different tools to foster circular urban planning: from land use regulation to urban planning and circular land tenders. The city of Amsterdam, Netherlands, developed a “Roadmap Circular Land Tendering” for land allocation, primarily for new-build circular projects. The Roadmaps is planned to be used for tenders also for transformation, renovation and demolition (in Amsterdam Smart City (2018[51])). Another example in the city is the development of a circular neighbourhood, the Circular Buiksloterham. Once one of the most polluted areas in the city, it is now turning into a circular area for living and working. Some of the policies adopted by the city include the development and construction of circular and sustainable buildings, receiving sustainable energy supply generated at the local level, the experimentation with smart grid solutions, and the creation of parking spaces for bicycles and shared mobility options (Municipality of Amsterdam, 2018[52]).

Cities are major food consumers, but also food waste producers. A total of 2.9 billion tonnes are annually destined to cities (resulting 0.5 billion of tonnes wasted) (Ellen MacArthur Foundation, 2019[53]). According to the Ellen MacArthur Foundation (2019[54]), achieving a regenerative food system in cities will entail an annual reduction of greenhouse gas emissions by 4.3 billion tonnes of CO2-equivalent and the generation of annual benefits worth USD 2.7 trillion by 2050. This is very relevant, taking into account that by 2050, cities will consume 80% of food (FAO, 2020[55]). Various experiences show that circular food systems in cities and regions are based on strengthening synergies across the food value chain, from production to distribution and waste handling.

Some cities promote local food production. Paris, France, is planning to relocate part of its food production to reduce transport cost and related greenhouse gas emissions. In Maribor, Slovenia, a digital platform (INNO RURAL) connects local food producers and customers to shorten delivery routes and share information on what products are sold and where (e.g. markets localised on Google maps). The concepts of urban agriculture and collective composting have also been developed in several cities within the context of closing the urban food loop. In Brussels, Belgium, in order to increase the urban food production, the 2015 Food Strategy Plan provides access to crops in areas above ground such as rooftops and cellars (Brussels-Capital Region Government, 2015[56]). Nantes Metropolitan Area in France has deployed a Territorial Food Project since 2018 to promote local, sustainable and accessible food for all.

Many surveyed cities set up initiatives to reduce food waste within the hospitality, food service and wholesale sectors. In the case of London, United Kingdom, measures include: promoting the Sustainable Food Cities Network; supporting public authorities (GLA family and London boroughs) and private companies that procure catering contracts promoting the food waste hierarchy; strengthening policies for dedicated space for food waste (and all other recyclables) in all new housing developments. In 2017, the city of Umeå, Sweden, created the Sustainable Restaurants Network to connect restaurants with local producers and to guide citizens towards sustainable choices. Examples at the national level are provided in Box 3.5.

In a circular economy, food waste should be reduced as much as possible or transformed into usable products for agriculture. For example, the city of Groningen, Netherlands, launched Food Battle Groningen to raise awareness on reducing food waste. Local not-for-profit organisations are taking the lead in this sector by pushing the demand towards local food consumption, reducing food waste and promoting urban agriculture. In Finland, the food market is one of the circular priorities and plans include creating a market for organic recycled nutrients, minimising food waste by creating specific incentives and support biogas systems and other renewable energy solutions in agriculture in order to replace the use of fossil fuels. Slovenia has also prioritised the food system and taken action to implement the zero-waste concept in food consumption by: customising menus in public institutions, installing compost containers and informing, educating and integrating different stakeholders around the importance of ecological and sustainable agriculture, the conservation of soil and water quality and the revitalisation of degraded land. The city of Toronto, Canada, has put in place the Urban Harvest programme to help reduce food waste and benefit the broader community by collecting surplus fruit and vegetables from residents’ backyards and redistributing them to local food banks and programmes. The city of Guelph aims to become Canada’s first technology-enabled Circular Food Economy, reimagining an inclusive food-secure ecosystem that by 2025 increases access to affordable, nutritious food by 50%, where 50 new circular businesses and collaborations are created, and circular economic revenues are increased by 50%. The programme aims to make the most of its distinctive characteristics (the presence of major agri-food industry players, agriculture research institutions and a developed household organic waste collection scheme) to: grow food regeneratively and locally when possible; minimise food waste; and design and market healthier food products (Government of Canada, 2020[61]).

Applying circular principles to the water sector is not new. Yet there is room for improvement and significant investments are foreseen to avoid linear lock-in now and in the future. Overall, significant investment is required to renovate and improve water infrastructure, such as water supply networks. According to the OECD (2016[62]), a total of 92% of surveyed cities (48 cities from OECD and non-OECD countries) reported significant challenges in terms of updating and renewing water infrastructure. Due to obsolete infrastructure and leakages in water supply systems, an average of 21% of water is lost before distribution. Globally, by 2050, the required investment for water supply and sanitation is estimated at USD 6.7 trillion (OECD, 2018[63])(OECD, 2016). As the future water infrastructure still has to be constructed, there is an opportunity to avoid linear lock-in based on the “take-make-dispose” logic.

In the water sector, circular economy practices can help improve environmental quality, while generating business opportunities and enhancing social well-being. Managing water in a circular way implies: reducing the use of water in the production cycles; ensuring more sustainable water flows; reusing water for specific purposes taking into account the effects on health and the environment; generating energy and recovering a wide variety of materials from wastewater treatment.

Cities have incorporated water and sanitation into their circular economy initiatives. For example, Amsterdam, Netherlands, focuses on closing local nutrient cycles. It combines water reuse techniques with educational programmes and procurement tools; the Barcelona Metropolitan Area, Spain, prioritises the creation of a water cluster and provided funds for research and development (R&D) in the sector. It promotes the creation of a water cluster with different stakeholders and adopts an intersectoral approach, in relation to the interplay of the water sector with others, such as food and design. Water-related initiatives in Flanders, Belgium, consist of supporting companies in closing water loops and facilitating demonstration projects. The Partnership Circular Flanders created spaces for stakeholder collaboration with a strong technical innovation approach. In Rotterdam, Netherlands, actions concentrate in the health sector through filtering wastewater, while Paris is advancing in wastewater energy recovery to heat and cool public buildings and using technology to monitor water consumption in green public spaces (Romano and Cecchi, 2020[64]) (Box 3.6).

Water can be treated for reuse in recharging aquifers, supplying agricultural systems, as well as for refrigeration in industrial processes, irrigation of parks and gardens, street washing and even for drinking water. For example, in Singapore, in 2003, the Public Utilities Board (PUB), Singapore’s national water agency, introduced NEWater, high-grade reclaimed water produced from treated used water, which exceeds the drinking water standards set by the World Health Organization and the United States Environmental Protection Agency. NEWater is used primarily for non-potable industrial purposes at wafer fabrication parks, industrial estates and commercial buildings (OECD, 2016[62]). In the city of Granada, Spain, the bio-factory transformed the concept of a wastewater treatment plant by producing energy and new materials (OECD, forthcoming[12]). In 2019, the bio-factory almost reached its 100% energy self-sufficiency goal: 18.91 million m3 of treated water have been reused for irrigation and for the maintenance of the minimum ecological flow of the local Genil River. In addition, from the 16 525 metric tonnes of fresh sludge material produced in the bio-factory in 2019, 14.3% was reused for compost and 85.7% for direct application in the agricultural sector (Emasagra, 2019[20]). A similar example exists in Santiago, Chile, where three bio-factories – La Farfana, La Florida and Mapocho-Trebal – located in the metropolitan region, currently treat 100% of the wastewater of Greater Santiago. The bio-factories allow a clean portion of water to be returned to the Mapocho River and the rest to the farmers on the metropolitan region.

The 3Ps analytical framework (people, policies and places) can help diagnose key governance components to enable circularity in the water sector. As for the “people” component, water operators can determine the shift towards new business models (e.g. fostering water reuse, decentralised water solutions, etc.). Citizens, on the other hand, can make choices regarding water consumption and waste prevention. On “policies”, the application of circular principles to water entails fostering policy coherence between water and energy (e.g. energy recovery from sludge sewage treatment), water and agriculture (e.g. wastewater sludge used as organic fertiliser) or water and construction (e.g. wastewater sludge as input for construction materials). Finally, on “places”, linkages across urban and rural areas (e.g. related to bioeconomy, agriculture and forestry) are key when it comes to recycling organic residuals to be used in proximity of where they are produced and to avoid negative externalities due to transport. The use of wastewater sludge generated in cities could provide compost and organic fertiliser to (peri-)urban farms and contribute to closing local nutrient cycles (Wielemakera, Weijmaab and Zeemanab, 2018[67]; Romano and Cecchi, 2020[64]).

Circular economy initiatives take place at various scales, varying from a micro-level, such as a neighbour, to the metropolitan and regional levels, where in some cases, linkages across urban and rural areas are particularly relevant. In 2012, the OECD and the EC elaborated the concept of functional urban areas to define metropolitan areas reflecting commuting zones, in terms of connections between cities and surrounding areas. By looking at the “functions” beyond the administrative boundaries of cities, policies can more efficiently respond to specific issues. The circular economy is a complex concept, which, according to the activity, sector and value chains, can take place at various scales. As such, the “functionality” should be taken into account for policies development and implementation at the right scale.

At the neighbourhood level, projects take the form of pilots, testing the effectiveness of technologies but also responses from citizens. For example, in 2018, the City Council of Valladolid and Ecoembes started a circular economy pilot project in the neighbourhood of La Victoria. The objective of the project was to achieve separate collection by 60% by 2030, in line with the European objectives. The initiative began in March 2018 and concluded in April 2019. During this time, the rate of separate collection rose from 32.8% to 51.3% (Valladolid Municipality, 2018[68]).

Some projects test their feasibility on university campus. The EPA in Ireland set up a partnership with the Irish University Association to develop the Campus Waste Project. Since the end of 2019, the EPA works with seven universities in Ireland with a focus on waste generation, in particular in relation to food and plastic waste. The agency is working to track and monitor the waste generated in the public bins located throughout the campus, the food service areas and in campus accommodation. The EPA conceives a university campus as a small, medium-sized town. Results from the project could inform interventions in city neighbourhoods or towns and help improve waste prevention. In 2018, the city of Valladolid, Spain, and Ecoembes through the Sterling Project installed ten intelligent yellow containers for plastic containers and cans on the Valladolid Campus. These containers are equipped with filling, temperature and humidity sensors. Through an application, the containers are able to automatically identify the users who use them. Each time the Sterling container is used, the user will receive a Sterling point. Each month, participants who have accumulated 10 or more Sterling points can win 1 of the 3 gift cards (equivalent to EUR 20) offered by the project organisers. The project benefitted from municipal grants launched in 2018 (Valladolid Municipality, 2018[68]).

Circular-related projects at metropolitan area and regional levels focus on industrial symbiosis, amongst others. The Barcelona Metropolitan Area (ABM), Spain, is putting in place the Metropolitan Project of Industrial Symbiosis, co-ordinating industrial symbiosis projects with circular economy initiatives at the metropolitan level. The Municipalité Régionale de Comté des Sources (Canada) and the economic development organisation Synergie Estrie foster industrial symbiosis projects through the networking of businesses in the region by exchanging by-products from their industrial activities, such as residual materials, water, energy and resources, both material and intangible, called synergies.

Due to economy of scale, some surveyed service operators operate on a metropolitan level. They embrace circular economy principles in their activities. In Umeå, Sweden, to reach economy of scale, water and waste services are operated across several municipalities. Since 2016, Umeå’s public waste and water company, Vakin, started acting as water provider in the municipality of Vindeln (Sweden) and has broadened its responsibilities with the mandate of promoting capacity development in the region towards closing the loops in the water and waste sectors. Dunedin, New Zealand, provides and manages development, infrastructure and community services across its district. The city has a statutory responsibility to promote effective and efficient waste management and minimisation within it and currently provides waste and diverted material services and facilities in both urban and rural areas. In Milan, Italy, the water utility company manages the purification plants that are in charge of the reuse of wastewater for irrigation in the rural areas adjacent to the urban core, reducing water consumption. The utility is investing in recovering nutrients and energy from the water plants (e.g. by producing biomethane from wastewater, the recovery of fertilisers and phosphorus).

At the regional level, some identified initiatives are related to the food sector and bioeconomy. The Lisbon and Tagus Valley Regional Development Co-ordination Commission, Portugal, launched the process for developing a regional strategy with a particular focus on the circularity of food and building materials in the metropolitan area and the region. The Castile and León’s Circular Bioeconomy Strategy is the first regional bioeconomy strategy in Spain. One of the objectives is to promote the demand and development of markets related to the bioeconomy. The strategy incorporates circular economy principles such as applying life cycle analysis, promoting product-as-a-service business models, fostering reuse and repair actions, recycling and reusing organic waste (Government of Castile and León, 2019[69]).

The metabolic connection between urban and rural areas creates opportunities for collaboration within the circular economy approach. For example, in the province of Groningen, Netherlands, the Local Making Space project (2019-2020) aims to set up a local value chain and establish a link between creative industries in the city and its rural area. The initiative aims to create new products from renewable resources available within the territory of the province (House of Design, 2019[70]). In Tampere, Finland, a local sustainable development company (Eco fellows) is co-ordinating rural-urban partnerships related to biogas. They work as a hub that brings together different actors that have not usually been in contact before (farms, power plant operators, logistics, etc.). In Kitakyushu City, Japan, a food recycling loop between rural-urban areas has been established to use compost generated in urban areas as fertilisers in rural areas or as a source of energy for the city. In Valladolid, Spain, the Municipal Food Strategy (Alimenta Valladolid, 2018[71]) intends to improve the co-ordination between urban and rural areas and create employment opportunities whereby the city can act as an agro-incubator for responsible consumption and local production. It foresees the creation of a “land bank” (banco de tierras) that the municipality could rent to local producers at affordable costs. Moreover, the municipality is planning actions to improve the measurement, traceability and quality of organic waste from urban (e.g. hotel and restaurant sector) and rural areas. The city of Lisbon, Portugal, created spaces for local producers to sell their products in the city (e.g. food market areas where it is possible to purchase products of local origin or organic or sustainable production). This measure aim to encourage the growth of the number of producers and farms in the surrounding areas.


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