Can Your Startup Tackle These 3 Circular Economy Challenges?

The Finnish government has a clear vision: Finland should become a pioneer in the circular economy by 2025 and profit from the competitive advantages that a new way of producing and consuming in closed loops would provide. An ambitious aim even though fully backed by recent EU policy on a roadmap towards a circular economy and the elaborate EU strategy on plastics with its recent ban on single-use plastics such as plastic cotton buds, cutlery, plates, straws, drink stirrers and sticks for balloons. Still, the country might need a helping hand from the vibrant Finnish startup world. How so?

Startups for a circular economy

Sometimes, government regulations and EU directives actually lead to innovation, as it was the case with the light bulb. The ban on the conventional incandescent light bulb in 2009 not only caused an outcry among consumers but also made some manufacturers inventive. However, we cannot regulate our entire lifestyle through prohibitions and simply prescribe sustainable consumption and production behavior. In some cases, therefore, entrepreneurship is needed to create new ideas and alternatives. As an initiative from the economy, the Green Alley Award – Europe’s first startup prize specifically for the circular economy – is based precisely on this idea of entrepreneurship, especially on startups with their pioneering spirit, their wealth of ideas and their willingness to take risks. So, the road towards a circular economy goes past of innovative business models that transform waste into resources. Many founders and young entrepreneurs have recognized this potential and are working on smart products, clever services, and innovative technologies, as demonstrated by the business ideas of several finalists and winners of the Green Alley Award in recent years. Their challenge: to create excellence and innovation within three key building blocks for a circular economy in Europe:

Challenge 1: Waste prevention

In an ideal circular economy, waste does not exist at all. For this reason, we are looking for solutions highlighting the use of alternative materials, low material consumption, the extension of the product lifecycle, repairability or multiple uses when designing products. One simple way to prevent, plastic waste, for example, is to stop using plastic and switch over to alternatives instead. When it comes to plastic packaging, a plastic-free life seems almost unimaginable, since consumers currently have few alternatives. This could change at least in the cosmetics sector with a small revolution from Finland: In 2017, the Finnish startup Sulapac convinced the jury of the Green Alley Award with a sustainable alternative to plastic packaging. The two scientists, Suvi Haimi and Laura Kyllönen, have developed a biodegradable packaging material from wood and natural adhesives. The primary component wood is a renewable raw material, which originates from sustainable forestry and thus does not waste any finite primary sources such as gas or oil. In addition, the colorful boxes in Nordic design with their waterproof and impermeable properties have all the advantages of real plastic. The packaging is currently used mainly in the cosmetics industry. The aim of the two founders, however, is to convince other sectors of their alternative packaging.

Challenge 2: Recycling

From Finland as well comes a simple and ingenious solution for reducing the amount of plastic packaging in the booming online retail sector: A service replacing single-use delivery packaging with a sustainable packaging –one that can be returned and reused up to 20 times. The inventor is the startup RePack. Whereas according to estimates, 95 % of the value of plastic packaging material is not retained in the economy but lost after a very short first-use, the returnable RePack bags are made of recycled polypropylene and have a much longer product life cycle. This idea helps to save resources and to reduce the amount of plastic waste in our homes. And, if online customers opt for RePack packaging, they even receive a reward or incentive for returning it. This increases customer loyalty ̶  with a sustainable twist ̶  for online retailers. RePack is now available in nine countries and almost 40 web stores. And for those who would rather uphold zero waste and wonder, what happens to the RePack once it has been used 20 times, Head Designer Juha Mäkelä already came up with a solution: to upcycle the RePack as a backpack. Have you been around Paris lately? Then you might have spotted the handmade RePack in Galeries Lafayette. Of course, the solution offered by RePack is another way to prevent waste. But it also illustrates the importance of a vital precondition for a circular economy: recycling. If there is no alternative to waste prevention, the aim of a circular economy is to recycle leftover materials and reuse it as a secondary raw material. We are looking for innovations and new technologies that simplify the recycling process, increase recycling rates, improve the recyclability of products and enhance the use of secondary raw materials.

Challenge 3: Digital Circular Economy Solutions

Another precondition for a circular economy is to provide information on the circularity of products and materials. In order to create material cycles, both producers and consumers need to be well informed about the quality, quantity, and use of raw materials from waste and its environmental benefits. Digitalization helps to better coordinate and connect material and information flow via technical solutions such as sensors, Internet of Things or blockchain applications. This might sound to be still a long way off, however, many seemingly ordinary digital solutions like apps directly connect to our everyday consumer life. If you would like to prevent food waste, for example, and sign up for the ResQ Club service, which you can use via your browser or a smartphone app, you plunge right into the digital circular economy. With the help of Finnish startup ResQ Club, customers can use an app to purchase leftover food in their neighborhood for a lower price: Restaurants that offer a broad variety of dishes have to reckon with a great deal of leftover food at the end of the day. From there, it’s not far from the road to food waste, which eventually leads to the 222 million tonnes of food thrown away in industrialized countries each year. The startup offers a second chance for food leftovers while at the same time providing restaurants a novel way to transform would-be waste into a new source of revenue.

ResQ Club, Sulapac, and RePack show that Finland is already well prepared for the circular economy challenge. However, there is still some way to go which needs to be lead by creative entrepreneurs with pioneering solutions.

Feeling inspired? Are you, or do you know, a circular economy startup looking to take things to the next level? If so, please get involved or spread the word! Apply for this year’s Green Alley Award by 1st July 2018:

Editor’s note: This post is written by Green Alley Awards.