Strategy for

Circular Economy
More value and better environment
through design, consumption, and recycling

Ministry of Environment and Food and Ministry of Industry, Business and Financial Affairs

SEPTEMBER 2018
Strategy for Circular Economy 3

Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Transition to a more circular economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1. Enterprises as a driving force of circular transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

2. Data and digitalisation in a circular economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

3. Circular economy through design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

4. New consumption patterns through circular economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5. A proper functioning market for waste and recycled raw materials . . . . . . . . . . . . . . 31

6. Circular economy in buildings and biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

4 Strategy for Circular Economy

Preface

Economic growth has lifted historically By using less materials and increasing
many people out of poverty and given recycling rates, enterprises can get more
millions of people access to material value out of less.
goods to an unprecedented extent. This
is really positive. However, increasing Also, a transition to a more circular econ-
wealth and more people having access to omy is an important and necessary step
a standard of living comparable to what in the government’s plan of action for
we know in Denmark mean that our contributing ambitiously to the attain-
consumption of natural resources is very ment of the 17 UN Global Goals.
high. It also means that we must view our
consumption with a more critical eye. These are the potentials that the govern-
ment’s Strategy for Circular Economy is
Circular economy is all about making to reap hand in hand with enterprises,
growth sustainable. It means using our consumers, and public institutions.
natural resources and designing our
products in a way that extracted raw
materials are used as sensibly and as
many times as possible. They should not
end up in a dump, but in a new product. Jakob Ellemann-Jensen
Minister for Environment and Food
A transition to a more circular economy
holds major potentials, not only for the Rasmus Jarlov
environment, but also for the competi- Minister for Industry, Business
tiveness of Danish enterprises. and Financial Affairs
Strategy for Circular Economy 5

Initiatives of Strategy
for Circular Economy
1. Promoting circular business development in SMEs
2. Setting up a single point of entry to the authorities for
enterprises with circular business models
3. Expanding the access to financing of circular business models
4. Supporting digital circular options by commercial use of data
and challenges
5. Incorporating circular economy into product policy
6. Boosting Danish participation in European work on circular
standards
7. Promoting circular procurement
8. Increasing focus on total cost of ownership in public
procurement
9. Promoting more harmonised collection of household waste
10. Creating a level playing field on the market for waste and
recycled raw materials
11. Liberalising WEEE management
12. Establishing a fund for the handling of regulatory barriers
to circular economy
13. Developing a voluntary sustainability class
14. Propagating selective demolition
15. Getting more value out of biomass
6 Strategy for Circular Economy

Transition to a more
circular economy
A transition to a more circular economy and wastewater can be recirculated as
holds major potentials for the environ- raw materials of high quality. Surplus
ment and may potentially improve the production and wastage from one enter-
competitiveness of Danish enterprises. prise is used as a valuable raw material
More circular enterprises may reduce in another enterprise. All in all, a more
their costs up to a certain point by uti- circular approach in our production and
lising their production capacity better, consumption can ease the pressure on
using less materials in design and pro- our natural resources and improve the
duction, and by increasing their rate of environment to the benefit of future
recycling and reducing waste arisings. generations.
Enterprises may create more value from
the same volume of materials through However, in some cases it will be expe-
better product design, remanufacturing, dient from an environmental and eco-
and by selling products in the form of nomic point of view to incinerate or
services. landfill the waste instead of recycling it
– among others to avoid recirculation of
In order to ensure that Danish enter- substances of concern.
prises can maintain a high level of com-
petitiveness and supply solutions con- A circular approach may open up for
tributing to a sustainable management an accelerated transition to new busi-
of natural resources and continuous ness models aimed at a rapidly growing
economic growth in Denmark, the gov- global market for green technologies
ernment wishes to promote a rethinking and services. Circular economy presents
of our way of producing and consuming. an evident option for expanding Danish
A more circular economy is called for. strongholds within, among others, bio-
economy, sustainable construction, and
In a circular economy materials and resource-efficient production. Thereby,
products are recirculated, their value is Denmark has the option of becoming a
fully utilised, and wastage is minimised. frontrunner within development and
Buildings and products are designed export of new circular technologies and
for reuse, repair, and recycling instead solutions accelerating the transition.
as for being discarded. It is easy to share
and get access to products and services Denmark has already taken some
without owning them. Biomass is used important steps towards a more circular
for pharmaceuticals, bio-based products, economy. Parts of the Danish business
and food ingredients instead of mere community already work according to
energy recovery. Problematic chemi- circular thinking, as there is a consid-
cals are phased out in order that waste erable economic potential in circular
Strategy for Circular Economy 7

Design and
production

Consumption

circular economy. The Strategy for Cir-

cular Economy, therefore, must be seen
in close correlation with – and as a fol-
low-up to – the Utilities Strategy.

The proposal presented in the Utilities

Recycling Strategy of exposing waste incineration
to competition challenges many years
of favouring waste incineration in the
Danish waste management sector: high
product design, new business models, municipal investments in waste incin-
and increased recycling. Many public eration plants and the local authorities’
institutions have started working position to assign household waste and
actively to promote circular economy commercial waste to those plants have
in their building and procurement created an incentive to fill up the plants
activities. Even if we still incinerate a at the expense of diverting more waste
relatively large proportion of our waste, for recycling.
we become better and better at recycling.
Also, Denmark is among those countries The proposal of the Utilities Strategy
that send the lowest volumes of waste to regarding better access to recyclable
landfill. waste will break down the barriers to
establishing large sorting plants liable
Competition exposure of to increase the segregation of recyclable
the waste management sector waste. In addition, the proposal aiming
In September 2016 the government to abolish citizens’ duty of using munici-
launched a Utilities Strategy promoting, pal services will make it easier for enter-
among others, better utilisation of waste. prises to establish take-back schemes
Thus, the Utilities Strategy constitutes and pursue new innovative solutions of
a key contribution to creating a more recycling, cf. the below box.
8 Strategy for Circular Economy

Government’s Utilities Strategy

– Competition exposure of the waste management sector

In line with the Advisory Board for Circular Economy, Better access to recycling of waste
the government in its Utilities Strategy has pro- The regulation of recyclable waste entails a divi-
posed to expose waste incineration and manage- sion under which local authorities treat parts of
ment of recyclable waste to competition. The gov- the recyclable waste, while private enterprises
ernment wishes to give consumers and enterprises treat others. This division of waste streams may
the option to contribute to the circular transition keep some enterprises from, e.g., establishing
and to secure a more efficient waste management new large sorting plants liable to reduce costs of
to the benefit of households and enterprises. recycling and thereby pave the way for a larger rate
of separation of recyclable materials. In addition,
Enhanced incentives for recycling there is a risk of private investments in recycling
before incineration avoiding the Danish market. This is a limiting factor
The economic regulation of the waste management for competition, innovation, and development
sector gives a higher incentive to the incineration of that would otherwise support a more circular
waste at the expense of recycling. The regulation of economy.
the waste management sector may result in excess
capacity, and local authorities have an incentive to Therefore, in its Utilities Strategy the government
assign waste to their own facilities in order to fill up has proposed a full competition exposure for the
the plants, despite the fact that some of this waste treatment of recyclable waste streams: this will
might have been recycled, and even if other plants create a security in the market and a larger volume
might charge lower fees for incinerating this waste. of waste streams in a way that it will be profitable
This may be a contributory cause of the relatively to establish new large sorting plants separating a
high share of waste incineration in Denmark com- larger proportion of the waste.
pared to other EU Member States, and it prevents
enterprises from seeking the best solution for dis- Today, citizens are under the obligation to use
posing of their waste. municipal services for the collection of waste. This
means that citizens cannot legally take their end-
Therefore, the government in its Utilities Strategy of-life bicycle, e.g., to a scrap dealer who might
has proposed that local authorities must put out create value by recycling the materials into new
for tender their household waste suitable for incin- products. This is a barrier to enterprises taking back
eration. This is meant to ensure that all parties have and receiving products at their end of life, so as to
equal access to the waste and thus that enterprises create as much value as possible from the waste.
finding value in recycling this waste can do so, while
waste that cannot be recycled is incinerated at the Therefore, with its Utilities Strategy the government
most efficient facilities. In addition, the government has proposed that local authorities’ right of assign-
has proposed that municipal and private waste ment and citizens’ duty of use of municipal services
incineration plants must compete on equal terms, are abolished. This is meant to give enterprises a
which will reduce the risk of excess capacity in the better opportunity to contribute to the new circular
incineration industry. transition through, e.g., take-back schemes or new
innovative business models for recycling.
Strategy for Circular Economy 9

Government’s objective and six areas of effort

for circular economy

We have come far, but there is still a large Board for Circular Economy presented
potential for accelerating the transition 27 specific recommendations on 7 June
to a more circular economy in which 2017, along with a vision, objectives, and
the greater value creation generates points of orientation for the Danish busi-
more positive environmental impacts. ness community.
To support the realisation in the Danish
business community of the full potential As a follow-up to these 27 recommenda-
from the transition to a more circular tions the government with this strategy
economy, the government’s Advisory wishes to pave the way for the Danish
10 Strategy for Circular Economy

It is the objective of the government

to promote circular economy, including
better use and recycling of resources
and the prevention of waste.

1
 f. the government’s
C business community driving the circular promote circular economy, including
plan of action for the
transition. It also wishes to create such better use and recycling of resources
UN Global Goals the
indicators for this framework conditions that support the and the prevention of waste. In order
objective are Denmark’s realisation of economic and environmen- to follow progress, Denmark’s resource
resource productivity
tal benefits of the circular economy in a productivity (Figure 1) and the share
(DMC/GDP which will
be replaced by RMC/ joint effort among Danish enterprises, of recycling of total waste arisings1
GDP) as well as the consumers, and public institutions. It (Figure 2) are used as indicators.
share of recycling of
is the objective of the government to
total waste arisings
(excl. soil and mineral
waste, cf. Eurostat).

Historic Business-as-usual
DKK/kg

Figure 1 20
Resource
19
productivity
in Denmark 18

17

16

15

14

13

12
2000 2005 2010 2015 2020 2025 2030
Year

Source: Statistics Denmark, Eurostat (historic data), Danish Environmental Protection Agency, Environmental Project no. 1838 (2016)
Note: Resource productivity is an indicator for how much economic value is generated from the materials used in the production of
products and services. Here, resource productivity is based on domestic material consumption (DMC) in relation to economic
growth (GDP).
Strategy for Circular Economy 11

Figure 2
Waste treatment in the EU
Recycling Incineration (and other recovery) Landfill (and other disposal)

Belgium

Slovenia

The Netherlands

Italy

Luxembourg

Austria

Latvia

Poland

The Czech Republic

UK

Denmark

Lithuania

EU (28 countries)

Germany

Portugal

France

Sweden

Croatia

Spain

Ireland

Finland

Hungary

Slovakia

Cyprus

Romania

Malta

Estonia

Bulgaria

Greece

0 10 20 30 40 50 60 70 80 90 100
Percent

Source: Eurostat
Note: the statement shows total waste excl. soil and mineral waste cf. Eurostat’s waste indicator. The statement of total waste in
Denmark in 2014 has been adjusted by the Danish Environmental Protection Agency, and updated figures are not yet available
in the Eurostat database. “Landfill (and other disposal)” covers all forms of landfilling and incineration without energy recovery.
“Incineration (and other recovery)” covers incineration with energy recovery and backfilling (backfilling is limited, since soil and
minerals are not included in this dataset). “Recycling” covers recycling of inorganic and organic materials.
12 Strategy for Circular Economy

To support the transition to a more circular

economy the government will launch
initiatives distributed on six areas of effort.

In brief, the government will:

1. Strengthen enterprises as a driving

force for circular transition

2. Support circular economy

through data and digitalisation

3. Promote circular economy

through design

4. Change consumption patterns

through circular economy

5. Create a proper functioning market

for waste and recycled raw materials

6. Get more value out of buildings

and biomass
Strategy for Circular Economy 13

Broad backing of circular transition In June 2017 the government met in a

Circular economy is a very wide agenda, circular summit with the Confederation
also crossing borders. Therefore, it is of Danish Industry, the Danish Chamber
important to ensure a common Euro- of Commerce, the Danish Construction
pean approach with harmonised frame- Association, and the Danish Agriculture
work conditions making is possible to & Food Council; here, the parties com-
exploit the new opportunities without mitted mutually to lift this agenda. The
creating unnecessary burdens in the Advisory Board for Circular Economy –
form of distortion of competition for the backed by, i.a., these four industry associ-
Danish business community. The gov- ations – has set up an objective of increas-
ernment supports, therefore, an offensive ing resource productivity by 40 percent
EU approach to circular economy in from 2014 to 2030, and of increasing
which efforts are made to create harmo- recycling in the same period from 58
nised framework conditions among EU percent to 80 percent. These objectives
Member States. The European Commis- are exclusively the business community’s
sion’s plan of action and legislative pack- own ones.
age for the promotion of circular econ-
omy in the EU constitutes an important With this strategy the government
contribution to increased competitive- delivers on its promise to accelerate the
ness, resource productivity, job creation, circular development. At the same time,
security of supply, and sustainable use of the strategy contributes to meeting the
natural resources in Europe. Also, a tran- ambition in the government programme
sition to a more circular economy is to for an ambitious and sustainable green
contribute to realising the government’s transition, in which the regards for com-
plan of action for the 17 UN Global Goals. petitiveness and jobs go hand in hand
with regards for our nature and envi-
The government considers enterprises ronment. We now invite the business
as being the primary driving force in the community, local authorities, regions,
transition to a circular economy. It is a organisations, knowledge institutions,
precondition that the right framework and citizens to join forces and contrib-
conditions are in place and that the busi- ute actively to pulling Denmark in a
ness community commits to this task more circular direction.
by being frontrunners. However, only if
all players in society – public along with
private ones – support this agenda can
we succeed in reaping the huge envi-
ronmental and economic potentials to
be gained from the transition to a more
circular economy. The public authorities
must create a framework allowing pri-
vate enterprises to grab the new oppor-
tunities found within circular business
models.
1
 Strategy for Circular Economy 15

Enterprises as
1.

a driving force for

circular transition
2
University of The Danish business community already products and components in a way that
Southern Denmark,
has a relatively high resource produc- they have a long useful life and are read-
2015: Potentials of
material savings in tivity, but there is still ample scope for ily repaired, reused, and recycled. Enter-
Danish industries. improvement. Costs of raw materials and prises may create more value from the
Factor of conversion
processed materials make up a good half same volume of materials, for instance
into labour costs
based on Copenhagen of production costs in Danish industries, through more efficient use of materials
Economics, 2013: cf. Figure 3. in their production, sharing economy,
resource productivity
remanufacturing, and product-as-a-ser-
and competitiveness
in Danish industries. With the optimal use of existing tech- vice models under which they sell the
nologies industry can reduce material access to using products, while the enter-
costs by DKK 21 billion, corresponding prises maintains ownership of them.
in labour costs to savings of DKK 50 per
work hour2. In order to increase access Large enterprises, in particular, have
to new markets and enhance compet- already ventured into the circular tran-
itiveness, enterprises will benefit from sition. But for many small and medium-­
focusing on the development of circular sized enterprises it is difficult to realise
solutions and services. Enterprises may the potential of the development of
improve their business by designing more circular business models.

52% Costs of raw materials and processed materials

Figure 3
Production costs 7% Costs of energy
in Danish industries
18% Costs of services, water, etc.
23% Costs of labour, etc.
Source: Statistics Denmark
Note: Production costs in Danish industries in 2014
16 Strategy for Circular Economy

3
Epinion, 2017 This is due, among others, to lack of product design, production processes,
knowledge, time constraints, sufficient and business models. A survey of 610
venture capital, and to the fact that it small and medium-sized enterprises3
may be relatively more cost-intensive shows that 88 percent of enterprises have
for small enterprises to go through the a positive attitude to circular economy,
transition. Therefore, the government while 51 percent find that they do not
will launch the following initiatives to have sufficient knowledge about circular
strengthen enterprises as the driving economy for using it in their enterprise.
force for circular transition: Lack of advisory services etc. is stated as
a barrier to the development of circular
business models. So despite the fact that
Initiative 1: Promoting circular Danish enterprises see the potential in
business development in SMEs thinking in more circular terms, lack of
knowledge and resources is a huge chal-
Many SMEs have a lack of knowledge, lenge for them when incorporating circu-
competencies, and capacity to reap lar economy into their core business and
the potential benefits found in circular strategic management.

How the government promotes circular economy through higher

education, research, development, and demonstration:

Educational and research institutions about the distribution of the research

support the transition to a more reserve in 2018 and the Finance Act of
circular economy by, among others, 2018 a total of just below DKK 1 billion
offering curricula matching the needs has been allocated for research – funds
of the target group, including within that may be used, among others, within
the transition to circular economy. The circular economy. The funds are distrib-
Ministry of Higher Education and Sci- uted on the following programmes:
ence will discuss the recommendations • DKK 186 million in 2018 within the
from the Advisory Board for Circular themes of “green growth” and
Economy with the management of “bio­resources” under the auspices
higher educational institutions. Circular of Innovation Fund Denmark.
economy has a predominant place in • DKK 88 million in 2018 and approx.
the government’s RESEARCH2025-cata- DKK 25 million a year in 2019­20
logue that forms the basis for strategic to the Danish Eco-Innovation Pro-
investments in research of the future. gramme.
A concrete example of measures in the • DKK 180 million a year in 2018­20
research field is Aarhus University where to the Green Development and
a centre for circular bioeconomy was Demonstration Programme.
established in 2017. In addition, further • DKK 380 million in 2018 and approx.
to the political agreement between DKK 180 million a year in 2019­20 to
the government and the Danish Social the Energy Technology Development
Democratic Party, the Danish People’s and Demonstration Programme.
Party, the Danish Social-Liberal Party, • 31 million DKK in 2018 to Innovayt
and the Danish Socialist People’s Party – a market maturing programme.
Strategy for Circular Economy 17

To overcome these barriers a national get a faster clarification whether a new

effort will be launched to promote circular technology, business model, or production
business development, implementation, method can be applied under current
and upscaling of circular business models regulation.
in SMEs. Concretely, a programme will be
established under which enterprises are
offered 50 percent co-financing for the Initiative 3: Expanding
procurement of consultancy from private the access to financing of
experts about where and how they may
circular business models
development, implement, and upscale
circular business models and, if necessary, Already today we have public and private
also co-financing of the procurement of investment funds with focus on green
supporting machinery and equipment. investments, such as the Danish Green
This is to give SMEs access to exactly that Investment Fund, the Danish Growth
knowledge and those resources that can Fund, and Innovayt. In addition, Inno-
help them convert their enterprise to the vation Fund Denmark grants subsidies
use of a more circular business model. for the development of knowledge and
technology leading to an enhancement
of research and innovative solutions to
Initiative 2: Setting up the benefit of growth and employment in
a single point of entry to the Denmark. This means that capital is avail-
able for enterprises with different levels of
authorities for enterprises maturity, also circular ones, provided they
with circular business models have a business model that is sufficiently
attractive for investors and subsidy funds.
Enterprises working with circular economy Also, a number of private initiatives have
meet new – and often more – regulatory focus on building bridges between circular
barriers than other enterprises. This is business ideas and investors. Today, the
due, among others, to the fact that circu- Danish Green Investment Fund is not
lar business models are innovative, and authorised to provide guarantees; this
that regulation often does not take into instrument is available to other state
account enterprises working across exist- funds.
ing value chains and regulation. In addi-
tion, enterprises find that it may often be Therefore, the government will make is
time-consuming for authorities to give an possible for the Danish Green Investment
evaluation whether new business models Fund to provide guarantees. Thereby, the
can be applied under current legislation. fund will be in a position to finance more
This leads to an insecure investment cli- types of projects. This will give new green
mate and means that enterprises either enterprises, including circular ones, more
give up using new innovative circular tech­ options for finding the necessary financing
nologies and business models, or they for the creation, development, and matur-
choose to establish abroad instead of in ing of their business model.
Denmark.

Therefore, the government will create one

point of entry to authorities for enterprises
with circular business models, so they can
2
 Strategy for Circular Economy 19

Data and
2.

digitalisation in a
circular economy
Digital solutions will increasingly become Initiative 4: Supporting
part of enterprises’ business models,
digital circular options by
public core services, and citizens’ daily life.
Digitalisation entails the opportunity for commercial use of data
storing and analysing huge amounts of and challenges
data. Every day 2.5 sextilion bytes of data
are generated, and 90 percent of all data Technological developments in the digital
have been generated within the last two field and opportunities for developing
years. new business models move faster and
faster. The increased use of digital sensors,
The digitalisation and the large volumes Internet­of­Things solutions etc. that are
of data may contribute to supporting used, among others, to measure material
the transition to a more circular econ- consumption, quality, and quantity has
omy. This may, for instance, be through meant that massive amounts of data
reduced wastage thanks to the use of 3D are generated constantly about different
print and sensors, by smarter consump- material flows. These data are potentially
tion through Big Data, Internet­of­Things, valuable information for enterprises,
and digital sharing economy platforms. since data among others can contribute
Finally, more and better recycling may be to creating transparency about which
achieved by increasing traceability and materials are found in concrete products
sorting of materials using Block­Chain and buildings, where they are found, and
and robots. Also, public and private play- which substances they contain. Data may
ers may increasingly use environmental also work as a driver of innovation in terms
data to qualify and improve decisions. of developing new solutions and services
contributing to an optimisation of material
The government, therefore, will launch flows. For instance, it is possible to reduce
the following initiatives to support cir- transport costs and thus increase the eco-
cular economy through data and digital- nomic profit from recycling, if the waste
isation: bin can tell the waste collector when it
needs to be emptied. In addition, better
utilisation of excess capacity through
20 Strategy for Circular Economy

sharing of, e.g., production equipment The government will therefore initiate an
between enterprises may contribute to analysis of public and private data with
increased productivity and savings for a potential to support circular business
each enterprise. development, and whether there are
public or private data that are concretely in
However, it may often be difficult for demand among enterprises, but difficult to
enterprises to get access to relevant get access to. The analysis will also study
data, and to get a grasp of the potential the potential from using data to promote
of a single data set or identify it in the circular business models. If the analysis
multitude of constantly increasing data shows a major potential from making spe-
volumes. Therefore, it entails a certain risk cific data sets available, two to three pilot
to buy data, especially for small and medi- projects will be launched in dialogue with
um-sized enterprises that only have lim- experts and key public and/or private data
ited resources available for experiments. owners. In addition, the government will
Strategy for Circular Economy 21

expand the existing challenge platform surplus equipment, such as end-of-life

with special focus on green challenges that hospital equipment, construction materi-
may, among others, generate innovative als, etc. The government will also expand
solutions within the utilisation of excess the statistics of Denmark’s resource pro-
capacity in the business community, such ductivity.
as buildings, idle machinery, etc. or public

Government Strategy for Denmark’s digital growth

In January 2018, the government pre- Panel. The Growth Panel has recom-
sented a strategy for Denmark’s digital mended to enhance digitalisation in
growth; it will support good frame- Danish enterprises through a broad
work conditions for Danish enterprises effort within, among others, enhanced
when they are to utilise the opportu- digital growth environments, agile
nities given by digitalisation and new and future-proof regulation, stronger
technology. This will be done, among digital competencies, a digital boost of
others, by following up on the recom- SMEs, as well as better use of data and
mendations from the Digital Growth IT security.

Government Strategy for growth through sharing economy

In October 2017 the government • Taxes must be paid in accordance

launched a Strategy for growth through with tax regulations.
the sharing economy with the follow- • Denmark must keep up with devel-
ing objectives: opments and be ready for a future
• Denmark must utilise the potential in which the sharing economy must
of the sharing economy, both as a contribute to growth in a sustainable
driver for growth and innovation and smart manner.
and as a lever for better utilisation
of the stock of fixed capital and The objectives for the sharing economy
resources. are supported, among others, by a broad
• A clearer framework for the sharing effort of guidance, a digital reporting
economy must support proper solution for sharing economy, and
functioning markets with good con- simplified tax deductions for rental
ditions for trust, more options, and of summer houses and permanent
competition to the benefit of the residences.
citizens of Denmark and growth.
3
 Strategy for Circular Economy 23

Circular economy
3.

through design

4
European Commission, The design of products is crucial for the Initiative 5: Incorporating
7th Environmental
transition to a circular economy, since
Action Programme to circular economy into
2020 choices in the design phase of, e.g., mate-
rials and chemicals are decisive for the product policy
lifetime of the product, and whether
components and materials can be used Many products are not designed in view
again with a high value. In addition to of repair, dismantling, and recycling. The
the economic potentials in a more circu- European Commission has decided to a
lar design, 80 percent of the environmen- higher extent to incorporate requirements
tal burden of a product is decided in the promoting circular economy in the envi-
design phase4. The design of circular solu- ronmental requirements for energy-related
tions is all about maximising the value of products in the EU Ecodesign Directive.
materials, products, and services through Also, the European Commission is working
a focus on limiting material consumption on a new method of measurement of a
and wastage, increasing the lifetime, and product’s environmental qualities. Both
making repair and recycling easier. issues may potentially give a competitive
advantage for Danish enterprises, since
The government, therefore, will launch they can market their products on more
the following initiatives to promote equal terms all over the EU and better
circular economy through design: visualise their products’ relatively low
environmental burdens. The Nordic Swan
24 Strategy for Circular Economy

The government works for a design of

products in a way that they are part of a
circular economy to a higher extent while
maintaining a high level of protection
of the environment and public health.

eco-label and the EU Flower set up circular maintaining a high level of protection of
economy requirements in some areas for the environment and public health. To
labelled products and services. The eco-­ secure Danish interests the government
labels thereby make it easier for consum- will enhance efforts in relation to EU work
ers, enterprises, and public authorities on requirements for circular economy for
to purchase in a circular manner thereby energy-related products and accounts of
contributing to a market-driven transition products’ environmental qualities. Also,
to a more circular economy. the government will support the dis-
semination of the Swan and the Flower
The government works for a design of eco-labels, and it will work for eco-labels
products in a way that they are part of a promoting even more the circular econ-
circular economy to a higher extent while omy agenda.

How the government works with circular product policy in the EU

The government works for a coher- substances of concern that entail or

ent product policy in the EU, setting may entail a risk for human health or
requirements for both energy efficiency the environment and cause problems
and circular economy for all product in their reuse or recycling. Finally, the
groups for which an overall assessment government works for eco-labels pro-
indicates a considerable improvement moting even more the circular econ-
potential. In addition, the government omy agenda.
works for a phasing out of the use of
Strategy for Circular Economy 25

Initiative 6: Boosting Danish An enhanced Danish effort in this stand-

ardisation work will make it possible to
participation in European work
communicate knowledge from the Euro-
on circular standards pean working groups on standards for
circular economy to Danish enterprises
The development of new international who may be interested in having influence
standards may contribute to the promo- on the standardisation work. Therefore,
tion of the transition to a circular economy the government will work for increasing
in Denmark. Thus, standards may create the Danish influence in the European work
trust and transparency in the market, on the development of standards for
compatible products and solutions, as well circular economy. The aim is to promote
as better access to international suppliers circular economy and to protect Danish
and buyers. At present, Denmark is only enterprises’ interests as much as possible.
represented in half the working groups Denmark will seek to take the lead in the
of the present European standardisation work of developing specific circular prod-
work within circular economy, expected uct standards in order that Danish influ-
to be completed by 2019-20. These Euro- ence is as strong as possible. Therefore, the
pean working groups are now developing government will ensure that the Danish
generic methodological standards for Standards Association can increase their
circular economy that will contribute to involvement in the work of developing cir-
forming the guidelines for future legisla- cular standards at EU level and it will work
tion, requirements for enterprises, meth- for assuming secretariats and presidencies
odological approaches for the frameworks for working groups on the development of
of the circular economy, and altogether circular standards.
affect the future standardisation work for
other products.

Political agreement on Joint Chemical Effort 2018-21

The political agreement on a joint and DKK 4 million to an enhanced

chemical effort between all the parties effort towards harmful substances in
of the Danish Folketing contains sev- PVC, including substitution with other
eral elements in support of a circular types of materials. Finally, DKK 6.1
product policy. DKK 4 million has been million has been allocated to an effort
allocated to having more products supporting enterprises’ innovation with
covered by the eco-label scheme along regard to substitution of undesired
with efforts to increase knowledge chemicals in production and products
about it. In addition, DKK 4.1 million with better alternatives – among others
has been allocated to efforts regard- to avoid that chemicals with adverse
ing circular economy and chemicals effects on human health and the envi-
in plastics aimed specifically at a ronment become a barrier to circular
follow-up to the EU Plastics Strategy, economy.
4
 Strategy for Circular Economy 27

New consumption
4.

patterns through
circular economy

With changed consumption and con- Initiative 7: Promoting

sumption patterns enterprises, citizens,
circular procurement
and the public sector can support the
market for circular solutions. By leas- In their procurement of products and
ing and sharing products – or buying a services enterprises and public institu-
service instead of a product providing tions can contribute to pulling the market
this service – it is possible to increase the towards a more circular economy. By
utilisation rate. By demanding circular demanding circular solutions it becomes
solutions it is possible to save money more attractive for designers and produc-
and increase recycling. At the same time ers to offer circular products and services.
it becomes more attractive for designers However, procurers often lack knowledge
and producers to think in circular terms, about how to incorporate relevant circular
and by repairing and maintaining con- requirements for suppliers and how to
tinuously it is possible to expand the design tender documents to promote
lifetime of purchases. circular products and services. In addition,
procurers often lack knowledge about the
The government, therefore, will launch economic and environmental benefits
the following initiatives to create new associated with procuring circular solu-
solutions through circular consumption: tions. Finally, the dialogue between procur-
ers and enterprises ahead of a purchase or
a tender is often limited, as there is also a
28 Strategy for Circular Economy

lack of tools making it easier for procurers among procurers, and transparency and
to set the relevant circular requirements. knowledge-sharing among enterprises
and public players. The Task force on green
The government will ensure that Denmark procurement will be developed to focus
continues to be among the frontrunners in more on circular economy and it will be
green and circular public procurement. This expanded to aim – in addition to public
will be done, among others, by extend- institutions – also at private enterprises.
ing and developing the Partnership for Finally, an analysis of environmental and
green public procurement and the Forum economic consequences of procuring
on sustainable procurement that have in a circular manner in various fields will
recently been given a joint Secretariat for be conducted. The analysis will, among
procurement in order to ensure co-think- others, study where it makes most
ing and coordination. Also, the portal economic and environmental sense to
“The responsible procurer” will be further procure green and circular products and
developed, again with increased focus on services.
circular procurement, a competency boost

How the government promotes circular economy through teaching

Already today, circular economy is The government will initiate that

part of the curricula of children, young circular economy is further included
people, and adults in the primary in curricula when new teaching and
and secondary schools as well as in inspirational materials are developed.
refresher and vocational training. This will cover, among others, the new
• In primary school, teaching in nat- preparatory basic education for which
ural, social, and domestic sciences educational curricula and curriculum
covers skills and knowledge about programmes setting up the concrete
circular economy, including sustain- contents and targets of the subjects
ability and resource use. will be established in 2018. The gov-
• In high school, circular economy ernment will also pursue a dialogue
may be taught in natural, technical, with the Council of adult and voca-
social, and economic sciences. tional training (so-called VEU council)
• In vocational schools and in labour about how to give circular economy a
market training, circular economy larger role in vocational and refresher
may be included in the curricula training.
where relevant.
Strategy for Circular Economy 29

Raising of repair limit for cars

In September 2017, the government percent in 2019 and 75 percent from

entered an agreement with the Danish 2020 onwards. In the statement of the
People’s Party on a conversion of car repair cost a deduction is made of DKK
taxes. The agreement entails, among 5,120 if one or more airbags are to be
others, a raising of the repair limit – i.e. replaced. In addition, a general de min-
how large a proportion of the value imis threshold of DKK 25,000 is intro-
of, e.g., a traffic-damaged car may be duced for the statement of the repair
repaired without triggering a new reg- cost. By repairing cars the production of
istration tax. The repair limit for cars is a new car is postponed and scrapping
raised from 65 percent in 2018 to 70 of the old car is avoided.

Initiative 8: Increasing focus alone. Therefore, the government will

on total cost of ownership in prepare a number of new total cost and
life cycle tools, and it will incorporate costs
public procurement or revenues from waste management and
resale in existing and new tools. In addi-
In connection with public procurement tion, the government will analyse the issue
focus is often on the purchase price instead in more detail, prepare guidelines, and
of total costs of procurement, operation, integrate total costs of ownership in the
maintenance, and waste management or future digital strategy for building.
resale. The same applies to public building,
even though today there is a requirement More dissemination and development
for total cost of ownership calculations for of total cost of ownership and life cycle
buildings exceeding a certain size. assessments may contribute to ensuring
a better decision-making basis for public
The government works for including to procurers and developers in relation to
a higher extent total costs and life cycle long-term economic conditions and envi-
assessments in the decision-making basis ronmental impacts of the solutions to be
for public procurement and building, so chosen. The guidelines will contribute to a
that the public procurer and developer maturing of the market, and a more valid
make their decisions based on total costs foundation will be created for the use of
of ownership instead of the purchase price total cost of ownership calculations.
5
 Strategy for Circular Economy 31

A proper functioning
5.

market for waste

and recycled raw
materials
Even if we design, produce, and con- Initiative 9: Promoting
sume according to circular principles,
more harmonised collection
waste will still be generated. In order to
support a more circular economy public of household waste
authorities must give the right incen-
tives for recycling waste and ensuring Today, we have an unharmonised waste
high-quality recycling, in order that it management system in which every local
creates the highest possible value and authority designs its collection schemes
the lowest possible environmental for household waste and sets up its own
burden. A waste management sector sorting criteria. This means that private
exposed to competition and a proper waste collectors and waste treatment
functioning market for waste and recy- operators must adapt to different local
cled raw materials may have a catalysing solutions, and this creates a fragmented
effect on circular economy, since it gives market. The result is lack of economies of
enterprises better access to valuable scale when waste is treated, limited com-
wastes, opportunities for economies of petition, sub-optimal solutions in waste
scale, and competition for the best solu- collection and in the communication with
tions. Also, more harmonised conditions citizens.
and enforcement of rules will create a
level playing field for enterprises all over The government wants to have more uni-
the country. form waste collection in view of securing an
environmentally superior waste manage-
The government, therefore, will launch ment, at the same time releasing business
the following initiatives to create a proper economic profits from a more efficient
functioning market for waste and recycled waste collection through a larger and more
raw materials: proper functioning marked. Therefore, the
government in close cooperation with,
among others, local authorities, industry
associations, and the business community
32 Strategy for Circular Economy

will prepare common guidelines on sorting innovative business models with which
criteria and collection schemes for house- enterprises get the optimum benefit out
hold waste. The guidelines must take into of the waste. It also reduces the incentive
consideration, among others, differences to manage waste correctly. Finally, it is dif-
between urban and rural communities, ficult for enterprises to attain economies
blocks of flats and single-­family homes, of scale and to establish efficient solutions
as well as the ambition level for recycling. for higher rates of recycling when they
are active in several municipalities under
different framework conditions.
Initiative 10: Creating a level
playing field on the market The government wishes to create equal
terms of competition for enterprises
for waste and recycled raw irrespective of the municipality they are
materials domiciled in. At the same time, the govern-
ment will promote a more proper func-
Enterprises state that waste regulations tioning market for waste and recycled raw
are administered in an unharmonised way materials without compromising require-
by the local authorities. In practice this ments for quality, public health, and the
means that something that is classified environment. Therefore, the government
as waste in one municipality is not nec- will create a more harmonised adminis-
essarily seen as waste in the neighbour tration and enforcement of the rules for
municipality, or the same waste is classi- waste and recycled raw materials – both
fied as recyclable in one municipality and in Denmark and internationally. This will
suitable for incineration in the neighbour be done, among others, by investigating
municipality. Also, municipal supervision how administration and supervision tasks
of enterprises’ waste management varies for waste and recycled raw materials can
much and is in many cases limited. The be gathered in one unit. In addition, waste
unharmonised administration and super­ management supervision will be aimed at
vision creates an unlevel playing field enterprises with the highest risk of viola-
among enterprises across municipal bor- tion of rules, and where the environmental
ders. This reduces competition and consti- risk of non-compliance with the waste
tutes a barrier to the development of new rules is highest.

National plastics action plan and expansion of the deposit-return system

In autumn 2018 the government will to the recycling of 52 million more

launch a national plastics action plan. bottles. Plastics is a very useful prod-
The plastics action plan will cover, uct and in many cases essential. It is
among others, an expansion of the therefore difficult to imagine a daily
deposit-return system to cover also life without plastics, but they must be
bottles used for fruit juices and fruit used smarter and more consciously
concentrates; this is expected to lead and in a cleaner quality.
Strategy for Circular Economy 33

Initiative 11: Liberalising Initiative 12: Establishing

WEEE management a pool for the handling of
WEEE contains a number of valuable regulatory barriers to circular
metals and other materials, but the busi- economy
ness economic potential is far from utilised
today. This is due, among others, to the fact A pool will be established for regulatory
that up to 50 percent of collection takes measures promoting circular economy.
place outside the official collection system The pool may be used, among others, for
and that the reuse value is lost, since collec- a focused follow-up to analyses of, e.g.,
tion has focus on recycling. In addition, the waste and bioeconomy. The pool will also
present market structure gives a low risk allow for prioritising later any needs for
appetite for investments in the necessary further analysis and implementation in
technology development. connection with, e.g., the Utilities Strategy,
which is assessed to contain key initiatives
The government wishes to liberalise man- for the promotion of circular economy.
agement of WEEE in a way that utilises the
value of materials to a higher extent. The
government will therefore give certified
enterprises the opportunity to collect WEEE
from households for reuse and recycling,
making it easier to choose a legal waste
management and simpler to supervise the
legal collection. In addition, a gentler collec-
tion of WEEE must be introduced in order
to preserve the reuse potential.

Six revised waste directives with new targets for recycling

In May 2018 six revised waste directives of packaging waste must attain at least
5
In a specific Danish
context it is important were adopted at EU level; they contain, 65 percent in 2025 and 70 percent in
to note that municipal among others, a number of ambitious 2030.
waste = household
and binding objectives for recycling of
waste and similar
waste from other waste in each Member State. The waste directives also contain a
sources (in Danish: number of new requirements for, among
husholdningsaffald
The recycling of municipal waste in all others, source-separation of organic
og lignende affald fra
andre kilder) Member States must attain at least waste from 2023 and extended pro-
55 percent in 2025, 60 percent in 2030, ducer responsibility for packaging waste
and 65 percent in 20355. The recycling from 2025.
6
 Strategy for Circular Economy 35

Circular economy
6.

in buildings and
biomass

The building and construction sector and Initiative 13: Developing a

the food industry have some of the larg-
voluntary sustainability class
est economic and environmental poten-
tials for circular economy in Denmark. The building sector is challenged by a
The building and construction sector relatively high consumption of new raw
alone accounts for around one third of materials for the production of construc-
all waste arisings in Denmark, and large tion materials and contents of substances
parts of the waste from this sector are of concern in buildings. The limited trace-
recovered today at a very low value. The ability of construction materials deterio-
market for recycled raw materials can be rates the opportunities for recycling and
strengthened by separating those wastes reuse of high value. The embedded energy
that contain substances of concern and for new buildings can constitute up to 50
by getting hold of the valuable materials percent of the energy consumption over
arising when buildings are demolished the entire life of the building. Today, no
and disassembled. In the food industry requirements are made for including con-
biomass – for instance residues from agri- struction materials’ so-called “embedded
culture, forestry, fishery, and food manu- energy” – i.e. the sum of all energy used for
facture – can be converted into biological production and waste management – in
components that can be recovered for buildings’ energy calculation.
various purposes. For example, through
biorefining of biomass it is possible to If at some point of time an international
produce sugar, lignin, methane, fat, and building passport is developed, it will give
proteins that can enter the production better opportunities for the recycling of
of pharmaceuticals, food, feed, materials, construction materials and a reduction
and energy. of costs for maintenance and renovation.
Also, better opportunities can be created
The government, therefore, will launch for more systematic management and
the following initiatives to get more removal of construction materials contain-
value out of buildings and biomass: ing substances of concern.
36 Strategy for Circular Economy

The government wishes to strengthen Initiative 14: Propagating

circular economy in the building sector
selective demolition
without compromising public health,
safety, durability, productivity, and terms Already today enterprises have an obliga-
of competition. Therefore, a voluntary tion to source-separate their waste so it
sustainability class will be developed in can be recycled. But far from all enterprises
the building regulation, and it must be comply with the rules. In fast and rela-
investigated in this work, among others, tively unplanned demolitions construction
whether construction material’s embed- materials are often mixed, which makes it
ded energy must be included. The future difficult to separate the valuable parts of
voluntary sustainability class may increase the waste. It also increases the risk that sub-
resource efficiency in the building sector stances of concern are recycled or recovered
as well as the extent and value of reuse instead of being managed safely in a land-
and recycling of construction materials. fill. Where existing rules focus on recycling,
In the development work it must also be so-called “selective demolition” leads to a
investigated whether the sustainability higher focus on the reuse of construction
class can contribute to an acceleration of materials.
the phasing out of substances of concern
in buildings, to an increase in extent and The government wishes to promote the
value of reuse and recycling of construc- reuse of construction materials in new
tion materials, and to a reduction of total buildings and reduce the loss of value
energy consumption. in connection with demolition. This will
be done, among others, by making it
Also, analyses will be commissioned relat- simpler for developers to comply with
ing to embedded energy to be used in con- existing rules, making communication
nection with the energy framework calcu- with authorities smoother, and expanding
lation for buildings. In view of improving the practise of selective demolition. Also,
the traceability for substances of concern the government wishes to create a level
in the building sector, increasing the value playing field for the many enterprises
of construction materials, and reducing that comply with the rules today. There-
maintenance costs and environmental fore, the government together with the
and human health risks, the government business community will look at ways to
will commission an analysis in order to make standardised demolition plans and
ensure an early safeguarding of interests training. Based on an analysis of economic
in connection with a future international and environmental consequences it will
standard for building passports. be agreed in dialogue with the business
community which buildings and renova-
tions should be covered by selective dem-
olition. Initiatives must be in accordance
with the government’s burden stop. In
addition, the government will improve
the traceability of construction waste.
38 Strategy for Circular Economy

Initiative 15: Getting more wishes in cooperation with the business

community to contribute to creating new
value out of biomass
market-driven value chains in view of
More biorefining can create market oppor- increasing volumes as well as the value
tunities for new types of crops and crop- of a sustainable biomass production. The
ping systems that utilise photosynthesis a government will also work for establishing
larger part of the year and produce larger a think-tank for food waste with private
volumes of biomass. In addition, prevent- players in order that the work of preventing
ing food waste in the entire value chain food waste is anchored broadly in society.
can bring down the environmental burden Projects conducted in the think-tank will be
from the entire food industry and reduce co-financed with private funds. Initially, the
costs for enterprises and citizens. think-tank will be established for a four-year
period and will be evaluated regularly. The
The government wishes to create adequate aim is to make the think-tank self-financing
framework conditions for utilising the value in the longer term perspective. Inspired
of biomass as much as possible. Therefore, by the UN Sustainability Goals about food
the government will analyse whether all rel- waste the think-tank will, among others,
evant externalities have been considered in enhance the knowledge level and coopera-
the present subsidy structure. The analysis tion across the value chain and disseminate
can constitute part of the basis for a future knowledge to a broad range of public and
national Bioeconomy strategy setting the private players in view of making Denmark
long-term direction for the development of among the international frontrunners
bioeconomy in Denmark. The government regarding prevention of food waste.

Other government measures promoting bioeconomy

In June 2017 DKK 8 million was allo- In addition to this, with the political
cated to a pilot plant for the biorefin- agreement on focused regulation
ing of green biomass promoting the from January 2018 DKK 25 million was
use of agricultural crops with more allocated to the development and
positive climate and environmental commercialisation of biorefining, for
impacts than, e.g., cereal crops. The instance the establishment of green
biorefining of clover grass produces biorefining plants around the country.
juice for biogas, press cake for cattle Further, with the agreement between
feed, and protein concentrate for the government, the Danish Social-­
high-performance feed. The purpose Liberal Party, and Danish People’s Party
of such a pilot plant is to qualify, opti- about business and entrepreneur initi-
mise, and demonstrate this technol- atives a fund of DKK 20 million a year
ogy. The aim is to reduce the price of in the period 2019-25 was allocated
such facilities and create a market pull for the production of sophisticated
and to survey expected effects. biofuels.
2018/19:3

September 2018

Ministry of Environment and Food

Slotsholmsgade 12
DK-1216 Copenhagen K
Tel.: +45 3814 2142
E-mail: [email protected]

ISBN digital: 978-87-93635-91-3 (pdf version)

ISBN print: 978-87-93635-82-1 (print version)

Design: e-Types
Photos:
Front page, GXN / Adam Mørk
Page 9, Universal Robots
Page 20, Rafal Rodzoch
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Print: Rosendahls

The publication can be downloaded from: Verif ied

environmental
mfvm.dk management
regeringen.dk REG. NO. DK-000250
Ministry of
Environment and Food
Slotsholmsgade 12
DK-1216 Copenhagen K
Tel.: +45 3814 2142