Circular economy and digitalization: Insights from the Netherlands
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? -?Prof. (Dr.) Ella Gorian
I spent my winter vacation in two wonderful cities: Rotterdam (Netherlands) and Indore (India). Despite being in different countries with distinct cultures, these cities share one important focus – the circular economy. A circular economy is a regenerative system aimed at minimizing waste and maximizing the efficient use of resources. Unlike the traditional linear model of “take, make, dispose,” it emphasizes reuse, repair, refurbishment, and recycling.
Both cities have implemented programs for separate waste collection, recycling, urban greening, and creating a favourable urban environment. However, Rotterdam has progressed significantly further in this direction. This progress can be attributed to the implementation of a nationwide program for transitioning to a waste-free economy and the widespread digitalization of circular economy practices.
The journey began in 2016 with the Dutch government’s approval of a program for a Circular Dutch Economy by 2050. In 2017, 180 participants, representing both public and private sectors, signed the Raw Materials Agreement. Over the following two years, these public-private partnership participants collaborated on implementation programs based on the agreement. Transition agendas were developed for five key sectors and value chains: Plastics, Consumer Goods, Manufacturing, Building & Construction, and Biomass & Food. These sectors are not only vital to the economy but also significantly impact the environment. The transition agendas outline how these sectors can become circular by 2050 and the necessary actions to achieve this goal.
In 2019, the Circular Economy Implementation Programme was introduced, translating the five transition agendas into concrete actions and projects for the period between 2019 and 2023. A key objective of the New National Programme on Circular Economy Implementation Programme (2023-2030) is to reduce resource use by 50% by 2030, with the ultimate goal of achieving a fully circular economy by 2050.
Why is the Netherlands so proactive in pursuing these ambitious plans? First, as a country heavily reliant on the logistics industry due to its geographical location, it is strategically invested in resource efficiency. Second, its significant dependence on raw material imports, particularly from countries like China, makes the economy vulnerable to fluctuating import costs.
The Dutch have also embraced digitalization as a critical enabler of the circular economy. By integrating digital tools and smart technologies, businesses can optimize resource use, reduce waste, and enhance production system resilience, contributing to a more sustainable economic model. Collaboration plays a key role in this process. Organizations like Holland High Tech, appointed by the Ministry of Economic Affairs of the Netherlands, work closely with partners such as the Top Sector ICT to foster the development of digital key technologies and innovations that support circular practices. They actively promote the application of digitalization in the smart industry and support initiatives such as the Smart Industry Scaling Agenda, which accelerates and broadens the adoption of digital solutions in the High-Tech Systems and Materials (HTSM) sector. Moreover, these organizations connect existing initiatives, expertise, and resources from European Digital Innovation Hubs (EDIHs) and Regional Development Societies to a broader network. This ensures that businesses have access to the tools and support they need to embrace digitalization as a driving force for circular economy transitions.
And there are several successful examples. Digital platform Excess Materials Exchange (EME) connects companies with surplus materials to those seeking specific resources, facilitating the reuse of secondary materials and reducing waste. By doing so, it cuts environmental impact by 60% and increases the financial value of materials by 110%. Another platform, Madaster, creates material passports for buildings, documenting the materials used in construction. This transparency promotes the reuse and recycling of construction materials, supporting circular construction practices. Introducing the block-chain technology, the founders of Circularise made it possible to ensure product traceability for supply chain compliance. It provides digital product passports that detail the origin, composition, and lifecycle of products, enhancing transparency and accountability.
Should India leverage the Netherlands’ experience and why? In my personal opinion, studying the others experience can teach us many things: how to plan and to allocate resources, what the mistakes were and how to avoid them and so on. But it shouldn’t be a mere copying, the positive insights should be implemented in Indian context considering the social, cultural, economic and many other factors. Yes, these two countries are difficult to compare in the aspects of geographic location, size of the territory and the population, etc. But since we, Indians, own the most important resource – our talented and creative people, who are globally known as the IT-prodigies, we can use the Dutch experience in digitalization processes for circular economy. And I can witness the creativeness of our students in sustainability projects – my visit to Indore was to participate as a distinguished speaker at the 4th 365体育投注 conference “Rethink, Reinvent, Reshape: Fostering Business Transformation and Innovation through Digital and Sustainable Practices”, hosted by Daly College of Business Management (DCBM). I met our future inventors, entrepreneurs and managers who sparkled with the unique ideas on making India sustainable. One of the projects especially attracted my attention – students from GSIMR College (Indore) tried to implement the urban planning principles and techniques from the ancient Indus Valley Civilization. Another project attracted my attention by proposing to implement the ethical principles from Bhagwat Gita in modern business practices. Students from P. M. B. Gujarati Science College made a selection of verses that reflect the core ideas for sustainability.
Hence the digitalization in India is on the rise, we can put our sustainability and circular economy projects on digital groove. The Dutch digital platforms I mentioned are adjoined with the construction industry, which is on the rise in India, as well as the digitalization processes. So, our IT-professionals can launch such start-ups state-wise and escalate the transition to the circular economy. The Indore’s experience in shifting to a circular economy is achievable, provided there is strong support from businesses, public engagement, and a commitment from local authorities to improve urban systems. So far, Indore has effectively implemented circular economy principles, particularly in its waste management system. In particular, the Indore Municipal Corporation (IMC) has achieved 100% household waste segregation, encouraging residents to separate waste into dry and wet categories. Afterwards, over 600 GPS-enabled vehicles collects segregated waste daily from households. Approximately 550 tonnes of organic waste are converted into compost daily, which is sold to farmers and landscapers. Additionally, about 20 tonnes of waste are processed to produce 750-800 kg of bio-compressed natural gas (bioCNG) each day, used to fuel city buses and as cooking gas for hotels. Recyclable waste is sold to recycling industries or companies that utilize recycled materials, while non-recyclable waste is sent to cement plants and road development projects. As a result, Indore is known as the India’s cleanest city worldwide and it gains ?4 crore annually through effective waste management.
And such impressive outcomes can be improved by the nationwide digitalization of the circular economy. As 2016 report by the Ellen MacArthur Foundation claims, India could unlock substantial economic, environmental, and social value for its businesses and population: ??40 lakh crore (US$624 billion) annual value creation by 2050, equivalent to 30% of India’s current GDP; 44% reduction in greenhouse gas emissions by 2050 compared to the current development trajectory; reduced traffic congestion and air pollution, improving urban living conditions; strengthened position as a global hub for innovation and technology; lower consumption of virgin materials, water, and artificial fertilizers, contributing to resource conservation; the ability to capitalize on the digital revolution and its associated opportunities.
How to achieve such results? Realizing these benefits requires a comprehensive strategy. Although, the circular economy projects in India are getting popularity among the large enterprises (Mahindra Group, Godrej Group, Hindustan Coca-Cola Beverages and many others), the achievements are impossible without broad attraction of public and private sectors, trade unions, civil society, educational and research institutions. First of all, we need the robust legislative framework: the prompt adoption of the Digital India Act and governmental support for start-ups in IT and sustainability will establish a solid foundation for the digital circular economy. Second, we must develop our treasure – the human capital: investing in education and training programs will create a skilled workforce equipped for a circular economy, as well as educating and engaging consumers to prioritize recycling, reuse, and product sharing should be a core element of a circular economy. Third, we need to get focused on small and medium enterprises and vulnerable social strata. Supporting SMEs and addressing social inequalities will reduce unemployment and poverty (as in case of the Dutch Closing The Loop company that demonstrates impressive results). And finally, we need to enhance the investment climate to attract foreign investments, particularly in intangible assets like technology and intellectual property.
By combining policy, investment, education, and public participation, India can emulate and even enhance the successes seen in countries like the Netherlands.
Disclaimer :-The opinions expressed here are solely those of the author's?and do not represent the views or positions of the institution.?
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