Speech by Stientje van Veldhoven, State Secretary for Infrastructure and Water Management, at the GES session ‘Financing new business models to boost resource efficiency and innovation’
“It is possible to grow an economy with less impact on the environment. With less impact on resources. And with lower costs. That’s good news for shareholders. But most of all, it’s good news for the next generations!” Speech by Stientje van Veldhoven, State Secretary for Infrastructure and Water Management, at the GES session ‘Financing new business models to boost resource efficiency and innovation’, 5 June 2019
Ladies and gentlemen,
Thank you for the opportunity to open this session! It’s encouraging to see that global interest in a circular economy is growing.
I’m in a flow.
Yesterday I came back from Helsinki where I had the honour of addressing the World Circular Economy Forum. Bringing together more than 2,000 representatives of private and public organisations, mostly companies like you!
The key message was: it’s time to scale up and speed up. The sense of urgency is growing.
And a lot is happening. The number of circular initiatives is growing. There are pilots, programmes, startups: now’s the time to take things to the next level. What do we need to scale up? That’s the most important question – and perhaps for you, too.
There are two reasons for this growing interest:
First, until now climate talks and actions have always focused on sustainable energy and energy savings. And rightly so. But there’s one aspect that we tend to overlook: smarter, more efficient use of raw materials.
With a world growing to 10 billion people, all wanting a home, proper food, clothes, maybe a car, a smartphone – we are going to need tonnes of resources.
We desperately need scarce raw materials like cobalt, gallium and platinum for our energy transition.
The second reason touches on the topic of this meeting: new economic opportunities.
Smarter use of resources isn’t just good for the planet, it’s also good for business. Not only by making existing systems more efficient, but – especially – by creating more value from waste.
The bad news now is, the economy is terribly inefficient.
The good news is: the economy is terribly inefficient!
So there is ample opportunity for improving market resources efficiency!
By developing new ways of production and consumption, opening up new markets and generating new business models.
More and more companies, big and small, understand that they need to change the way they use resources. Not only to remain competitive in a world where resource security is under pressure, but also to reap the benefits of the global transition to a more circular economy.
According to the EU, a circular economy can result in more than one million new jobs across Europe by 2030. And can have a potential economic benefit of 1.8 trillion euros by 2030.
The question is: how do we get there?
It starts with ambition. The Netherlands is working to achieve a fully circular economy by 2050. By 2030 we want to have reduced primary raw materials use by half. We’re one of the first countries to set an actual target for this.
Why? Because long-term clarity helps businesses take investment decisions.
How do we manage this process? Crucial: we are not talking about businesses; we are talking and working with them to overcome legal and financial barriers.
We’ve drawn up action plans, together with representatives of our leading economic sectors – such as plastics, construction and manufacturing.
- We’re going to expand our producer responsibility strategy, extending manufacturers’ responsibility for waste, as well as providing them with the means for innovations.
- We’re developing new design standards, based on the principle of reuse.
- And we’re stimulating the market, for instance, through circular procurement across central government. Government is a big party on the market, with direct influence on 15 to 20 per cent of GDP.
For example: all military uniforms will be reused. In the past, discarded uniforms were incinerated. Now, there’s a new a business model, with the government as a launching customer.
This year we’ve also adopted a new national programme to implement these agreements.
We’re stepping up our support to innovative entrepreneurs through the Acceleration Centre, together with Dutch employers’ organisations. The centre helps companies adopt new business models, find investors and deal with unnecessary obstacles in legislation.
The good news for all you international entrepreneurs is that there’s an international equivalent. It’s called PACE, the Platform for Accelerating the Circular Economy.
It’s a public-private collaboration between big international companies like Apple and Coca Cola, countries like Japan, Denmark, Indonesia and the Netherlands, and international organisations.
And it was launched at the World Economic Forum last year. PACE members are working together to scale up circular innovations and make global supply chains more sustainable.
I’m proud my country is hosting the PACE secretariat.
Ultimately of course, it’s innovative companies that make a circular economy. And I’m glad to see so many companies are coming up with great circular ideas. Let me mention a few of them.
Auping has developed a take-back system for mattresses in collaboration with one of their major customers, Landal Green Parks. Their mattresses are designed so that they’re 100 per cent recyclable. In the past, discarded mattresses were incinerated or sent to landfill.
So this circular business model is creating new value.
Smart crusher is a company that operates on the principle that ‘trash is cash’. They’ve developed a technology for on-site separation of building and demolition waste. Enabling them to produce new concrete using 15 per cent less cement – cutting costs as well as carbon emissions.
Companies like Black Bear and Ioniqa. Black Bear creates value out of discarded car tyres. A technology with great potential for scaling up, because every country has to deal with this type of waste!
And Ioniqa has developed an innovative technology to recycle PET-bottles, textiles and carpets infinitely.
Very promising initiatives. But to bring this type of innovations to the market can be a challenge. Getting it financed can be a bottleneck.
Ioniqa had a promising new technology, but it needed partners. So it joined forces with Unilever, a big user of plastic packaging. And Indorama, a global PET producer. Together they created a strong proposition, which made it easier to attract investment. Right now they’re ready to scale up, and are building a new plant in the south of the Netherlands.
At the same time, the financial sector is looking at ways to accelerate financing and investments in circular business models. This is not always easy, because existing systems are often favouring linear models.
A group of Dutch banks has recently published some guidelines for investors and companies. I am happy ING is here to share some of their recommendations.
Investors need reassurance that there’s a market for your product. They need to know how you’ll ensure security of supply. But if you’re in the process of creating a new market, this can be hard to prove.
Sometimes, legislation stands in the way of realising the potential of a new technology.
The example of Black Bear which will be presented during this session, illustrates these challenges but also shows they can be overcome.
We’re learning by doing. Partnerships are crucial. A circular business model is a cooperative model.
As I said, the number of successful examples is growing. The key lesson is: find the right partners. Address the need for an active connecting government. You can only create a circular business model together.
The circular economy is starting to spread its wings.
It’s going from startup to scale-up.
It is possible to grow an economy with less impact on the environment. With less impact on resources. And with lower costs.
That’s good news for shareholders.
But most of all, it’s good news for the next generations!