Skip to content
Media
Valtioneuvoston kanslia frontpage

Study: A circular economy offers great potential for green growth in Finland

Government Communications Department
Publication date 23.5.2016 12.14
Press release 221/2016

A circular economy is clearly likely to benefit the Finnish economy more than previously thought. At the same time, it would promote environmentally sustainable economic growth. This is the conclusion drawn by the final report on the research project ‘Improved competitiveness and green growth from circular economy’.

The project’s objective is to provide a comprehensive overview of the potential offered by a circular economy and explore ways in which society can progress towards a circular economy. Circular economy means a new type of resource-wise economic model in which value is created by using materials for as long as possible and reducing the environmental load by minimising wastage in the use of natural resources.

The project presents a limited set of actions to promote the circular economy, predicting that they would increase Finland’s GDP by EUR 1.7 billion and create 5,000 new jobs in the country while at the same time reducing greenhouse gas emissions and raw material consumption by 2.5% and 0.9%, respectively, by 2030.

The positive potential offered by the circular economy for Finland is far greater than previously assumed. In the light of new knowledge and the findings of earlier studies, it is expected that the circular economy will contribute about EUR 3 billion to the GDP by 2030. At the same time, Finland’s greenhouse gas emissions can be cut by several per cent, if all plastic is recycled efficiently and full use is made of the potential offered by biogas in transportation.

The findings suggest that the circular economy may prove a decisive solution in the efforts to foster green growth.

“However, the circular economy needs to be supported by cleantech solutions conducive to more sustainable consumption and production in order to be able to respond to the objective of mitigating climate change. In the circular economy, the greatest environmental benefits are achieved when material flows are replaced by cleaner and more energy-efficient circulation. For instance, petrol could be replaced by biogas made from biowastes. The new products developed by the Finnish forest industry may play a key role in the circular economy,” says Professor Jyri Seppälä of the Finnish Environment Institute and the leader of the project.

A circular economy affects all areas in society

Product design, research and innovation activities will play a key role in creating a circular economy. Efforts are needed at all levels: social, technological and commercial. Researchers think that the transition to a circular economy calls for a reassessment of values throughout society.

To redeem the hopes pinned on the circular economy, it is necessary to achieve changes in production, products, services, private and public consumption and waste management. The current policy measures are aiming at improved materials efficiency with the focus on wastes, whereas the circular economy calls for new ways of using materials without producing any waste at all. Materials can be prevented from ending up as waste through regular maintenance, repairs, sharing and by promoting re-use and remanufacturing.

“It should be more profitable to use recycled than virgin materials. The possible tax policies to achieve this should be analysed with care,” says Jyri Seppälä.

The final project report proposes that business models based on the circular economy also be promoted through infrastructure construction and public procurement contracts.

The project ‘Circular economy in Finland – the operating environment, policy instruments and simulated effects by 2030’ was conducted as part of the implementation of the 2015 Government plan for analysis, assessment and research. The project was carried out by the Finnish Environment Institute, VTT Technical Research Centre of Finland Ltd and the University of Oulu.

Final project report (in Finnish)

Policy Brief (in Finnish)

Further information about the Government’s analysis, assessment and research at tietokayttoon.fi

Inquiries: Professor Jyri Seppälä, Project Leader, Finnish Environment Institute, tel. +358 (0)40 740 1708, jyri.seppala(at)ymparisto.fi; Juha Honkatukia, Senior Principal Scientist, VTT Technical Research Centre of Finland Ltd,  tel. +358 (0)40 304 5561, juha.honkatukia(at)vtt.fi; and Jarmo Muurman, Environmental Counsellor, Ministry of the Environment, tel. +358 (0)295 250 259, jarmo.muurman(at)ym.fi