The circular economy requires a different government

“Wherever possible, materials are reused” is what the outline agreement between dutch coalition parties PVV (right-wing Freedom Party), VVD (Conservative Liberals), NSC (Social Conservatives) and BBB (Farmer-Citizen Movement) says. With a text like that, I immediately think of the Sustainable Environment and Circular Economy Directorate, which has been trying to drive a transition with limited resources and policy in recent years. Based on the text from the outline agreement and his track record, the State Secretary responsible does not seem likely to become a booster of this policy. Still, I am not pessimistic. The combination of producer responsibility and the entry into force of the Corporate Sustainability Reporting Directive will continue to have a driving effect on the circular economy. The outline agreement, which is policy-free on this topic, leaves room for a different attitude from the government: less focused on enforcement and new rules, more on collaboration, acceleration and building support. And that may be just the kind of government that the circular economy in the Netherlands needs right now. Whether the State Secretary is a believer or not….

To date, the Dutch National Circular Economy Program has not really come to fruition. This has partly to do with where and with whom this responsibility is invested: the environment department of the Ministry of Infrastructure & Water Management. The challenge in circular economy is to set the frameworks so that the market does its work and companies are enticed to innovate and invest in circularity. In addition to standards and enforcement, this also requires driving cooperation and providing comfort to market parties. This way of thinking and working is much less ingrained at IenW. The discussion is now too often about whether or not companies are succeeding in meeting targets, but does not sufficiently address market developments in commodity trading and how to cooperate with other ministries to become more circular. That the circular economy has not been placed under the responsibility of the new Minister for Climate & Green Growth is therefore a missed opportunity.

This week, Schiedam-based Ecocircle added to the ever-growing list of plastic recyclers declared bankrupt in the past six months. Mainly because of the low price of virgin plastic, the market for recyclate is under severe pressure. And that while there is already a shortage of recycling capacity in Europe. At the moment, due to a lack of capacity, part of industrial waste already has to be recycled outside Europe. In the future, we want more to be recycled. If capacity is not added, then ambitious European circular goals will fall by the wayside. The ministry is struggling to find a solution. A European plastics blending obligation in 2030 and a tax on virgin plastics as of 2027 included in the coalition agreement offer perspective, but as is often the case with circular policies, what is most needed is lacking: clarity, reliability and predictability.

Also part of this puzzle is the space demands of the waste and recycling chain. Spatial planning is one of the biggest challenges of the coming period and that is where responsible Minister Mona Keijzer needs to provide guidance. The change in trend in recent years is that The Hague is getting more and more involved in the planning of the scarce space in the Netherlands. Although the waste sector does not make the greatest claim on available space, the growth of the circular economy also demands a place on the map. Waste collection, sorting and recycling sites are a crucial link in the circular economy and should not be squeezed by encroaching housing developments, for example. We have seen waste companies themselves investing in the relationship with the environment for some time. This will become even more important in the coming years, but it would be nice if the Minister of Housing & Spatial Planning would also consider a place for the waste sector.

We like to look to the House of Representatives to outline a future perspective for these circular challenges, but there we see the same reflex as at the Ministry of Infrastructure & Water Management. The sentiment about business has become very negative in recent years in The Hague. Even in debates about the circular economy, we often saw members of parliament outdo each other in criticizing business in carrying out producer responsibility. The predominant discussions are about specific instruments, such as deposits or the surcharge for single-use plastic packaging. This is unfortunate, because in fact it deals with a relatively small piece of the circular economy. Little attention is paid to more fundamental questions such as recycling capacity and encouraging innovations in plastic reduction. Precisely companies (and not the government) have contributed to better recycling with innovations. That Hague discussions then focus on requiring entrepreneurs to install more deposit machines shows a policy poverty on the subject. Everyone recognizes that entrepreneurs are saddled with too many regulations, but apparently we do mandate that they all install collection machines. Do we realize the true impact on independent business owners? The Human Environment and Transport Inspectorate (ILT) is also participating in this game by interfering in detail with the implementation of producer responsibility.

The fact that both the outline agreement and the new secretary of state say little about the circular economy may therefore prove to be a blessing. Indeed, let’s look at how to improve collection “where possible. It means a new attitude from the government toward circular policies. Less dogmatic loose solutions and requirements on products and materials. Looking more ahead, seeking cooperation to arrive at a shared picture of what our circular economy should look like and building support for it in society. That provides space for the companies in the circular economy, from waste sector to industry, to show how the circular economy can grow.

This opinion piece was published in the August issue of Trade magazine “Vakblad Afval!”.