Unintended consequences from existing regulation are one of the key barriers hindering circular economy. In Denmark a taskforce has been assigned to discover regulatory barriers to optimising use of resources - and then break them down.
Implementing circular economy policies requires a detailed study of current policies and their effects. In Denmark the Taskforce for Resource Efficiency was established in 2014 as a joint initiative of the Ministry of Business and Growth and the Ministry of Environment and Food, with the goal of boosting the strength of the Danish economy.
The mission of the Taskforce
The taskforce, which is run by the Danish Business Authority, takes a systemic approach to review existing regulations (both Danish and EU) affecting resource productivity and circular economy practices, identifying barriers and finding solutions. Resource efficiency is of particular importance to Denmark as volatile materials prices have a major impact on the manufacturing sector where resources make up 45% of production costs.
How the taskforce is moving forwards
In 2015 the taskforce identified barriers preventing potential increases in resource efficiency in sectors such as manufacturing (including machinery, furniture and food), waste management, construction, and retail/wholesale. The resource streams covered include raw materials, semi-produced goods, water and chemicals. Through dialogue with companies, consultants and business associations in Denmark and abroad the following potential focus areas were identified:
- Import/export of waste: significant barriers to establishing a single market for secondary raw materials due to existing regulations or their uneven interpretation.
- Take-back of products and/or packaging: regulations governing these areas are not sufficiently clear.
- Consequences of definitions of waste: when waste is used as a resource in production, the process is classified as waste handling. This often does not fit the company's own vision of what it is doing. Furthermore, production using non-virgin resources is subject to different regulations than production using virgin materials.
In 2016–2017 the taskforce will establish solution teams for each selected barrier to find the most effective way to overcome it. The full mapping and analysis of barriers is still to be completed and it is not yet possible to publish detailed preliminary findings – updates can be found at on the website (in Danish only).
The Taskforce will identify regulatory barriers and underlying conflicting interests that prevent businesses from utilising their input of materials and water more efficiently. The work of the Taskforce is an iterative process that alternates between business studies, other analysis, and development of solutions in dialogue with companies and relevant authorities.
Tackling each barrier could take the form of changes in specific parts of Danish regulation, in administrative procedures, enforcement, and/or information about the rules. This would involve cooperation with the relevant authorities. However, when the solution is to change EU regulations it is recognised that timescales will be longer.
Takeaways so far
Although it is too early for concrete results, the taskforce has shown how complex resource use is and where there are still some key research gaps. For example, identifying exactly where and how regulations cause a barrier to resource efficiency is challenging, as is finding a model for measuring the impact. Cases where resources flow across multiple industries’ value chains are particularly complicated.
The Danish Business Administration has found that looking at the issue of regulatory barriers through the eyes of the companies is extremely useful, especially when coupled with an understanding how materials, new designs and business models can be coupled to create a more circular approach. This is very powerful when coupled with the government perspective on why the existing rules were put in place, to look across entire value chains and understand the complexity of each barrier, while trying to avoid creating new problems by fixing the old.
Level of Government
Budget of €2.3 million in total 2014-2017. Staffed by five people from the DBA (full and part time) and one from the Danish EPA (full time).
The taskforce will initially estimate gross potential impact (economic and environment) of removing each identified barrier. Once solutions have been identified on selected barriers, their impact will be calculated to show their contribution improved resource efficiency.
Danish Ministry of Business and Growth, and the Ministry of Environment and Food
Similar policies elsewhere
Working group on National Material Efficiency Programme, Finland
Circular Economy Task Force, UK
The Fund for Green Business Development - provides grants and advice to businesses, including on new green business models and green industrial symbiosis, aimed at enhancing their competitiveness and growth, as well as improving environmental performance.
Business Forum for Better Regulation - identifies those areas of regulation that businesses perceive as the most burdensome and proposes simplification measures that the government must either pursue or explain why not ("comply or explain" principle).
For further information
Contact information of policymaker: firstname.lastname@example.org
URL for policy website / report: www.enkleregroenneregler.dk (in Danish only)
Contact information at Ellen MacArthur Foundation: email@example.com