Setting course for a circular economy

Finland was the very first nation to devise a road map towards its goal of becoming carbon-neutral

Over the past few years, Finland’s Infinited Fiber Company (IFC) has created a miracle: a technology that allows textile waste to be used again and again, preserving 100 per cent quality.

The technology brings enormous social, environmental, and economical impacts to the textile value chain, as well as everybody’s wardrobe, according to the Finnish Ministry of Foreign Affairs.

Petri Alava, CEO of the company, told VIR during last week’s World Circular Economic Forum in the Finnish capital of Helsinki that with the IFC’s technology, one can turn textile, cardboard, and agricultural waste into new natural fibre. Thus IFC can reduce the usage of new materials.

The company is now in co-operation with many global brand names such as Adidas, H&M, Wrangler, Lee, and The North Face.

In its long-term vision, IFC will expand to Southeast Asia, in which Vietnam is seen as a market full of opportunity as the country has entered into several free trade agreements which create favourable conditions for the country to export garments and textile products.

“Vietnam is a great potential market quite suitable for investments by companies like IFC,” Alava told VIR. “We hope one day we can apply our solutions there.”

The company is currently running its 50-tonne pilot plant in Finland’s second-largest city, Espoo, and has plans to increase capacity to 500 tonnes by 2020. IFC employs 11 people, with turnover in 2018 reaching €1.5 million (nearly $1.7 million).

Fostering circular businesses

IFC was among many Finnish companies invited to attend and share experience at the World Circular Economic Forum, alongside the likes of Smart & Clean, Amerplast, Nestlé, Phillips, and Olio.

In another case, Jospak Oy Company is offering smart solutions in packaging. Established in 2014, the company has an annual turnover of nearly €1 million ($1.12 million) and launched a circular economy solution last year.

Food packaging is often made almost entirely of plastics and in Europe as a whole, such packaging accounts for a large share of all plastic waste. Recycling food packaging is not easy because it is often made of materials containing various layers of plastics, the separation of which is challenging.

In this context, Jospak manufactures food packaging that contains up to 85 per cent less plastics than other equivalent plastic packaging. The packaging made by the company consists of a tray that is made of cardboard or corrugated cardboard manufactured from raw materials, and a plastic film that hermetically seals the item.

The packaging is easy to recycle, since the tray and the plastic film can be easily separated from each other and recycled with similar type of waste. The solution can be used in food industry processes.

According to Sitra, the Finnish Innovation Fund operating directly under the supervision of the Finnish Parliament, hundreds of companies in the country like IFC and Jospak have received support in many different ways from the government in order to materialise their dreams.

These companies showcase their novel ideas for their startups, which have attracted hundreds of millions of US dollars from equity funds and even from state funding.

Business Finland, the most important public agency for research funding in the country and directed by the Finnish Ministry of Employment and the Economy, is in charge of supporting enterprises.

“We believe in the power of ideas. That’s why we fund and help Finnish companies grow quicker and develop their innovations to become global success stories,” said Business Finland on its website. “We offer funding for research, product development, and many kinds of business development needs, especially for small- and medium-sized companies. Large companies and research organisations can receive funding for joint projects with smaller companies.”

With this great support, via enterprises’ strong sustainable growth as a key propellant of economic growth, Finland has gradually been realising its ambitious dream to create a circular economy over the next six years.

In fact, the Scandinavian nation is a front-runner in the field of circular economies, with innovative solutions coming from extensive collaboration among the public and private sectors, which has also gained international attention thanks to its wide scope and pragmatic approach.

For Finland, the circular bio-economy is a tool for achieving sustainable development, combating climate change, saving natural resources, and improving the environment, all while generating economic growth and jobs. According to estimates, the circular economy may contribute an annual added value of at least $3 billion to the Finnish economy by 2030.

Finland was the first country in the world to release a national circular economic road map, outlining the way to sustainable wellbeing and a successful carbon-neutral future.

The Sitra has played a key role in establishing the circular economy concept in Finnish society. In the public sector, many municipalities have taken voluntary, active steps towards a more sustainable future, with one example being the Smart & Clean Helsinki Metropolitan. And in the education sector, thousands of Finnish school and university students are learning about applying circular economic principles.

A developed nation of 5.5 million people, Finland is well suited to trying out new innovations, with different partners often in close proximity. The Nordic nation is now carrying out practical circular economy experiments that are providing benefits across all sectors of business and society.

Combining success in education and strong competences in digital solutions, Finland aims at offering unique solutions globally.

“Already a large number of world-class Finnish enterprises have adopted circular economy approaches in their business,” said Ernesto Hartikainen, senior lead of Carbon-neutral Circular Economy under Sitra.

Finland excels in various solutions, from waste management and sustainable future food to new material development. For instance, Finnish firms have been rapidly developing new innovative biomaterials derived from wood. Also, in Finland’s pulp and paper industry, almost all the materials and side streams are being recycled and utilised in producing new products or to generate renewable energy.

“I think Vietnam, in trying to develop its own circular economy, can seek experience from Finland and we stand ready to share that experience,” Hartikainen told VIR.

Lessons for Vietnam

According to Hartikainen, for Vietnam to develop its own circular economy it is necessary for the country to put priorities in specific and potential sectors, then priorities can be expanded towards other sectors, and subsequently a specific master road map for building up the circular economy can be formulated.

“The country also needs to pay special attention to developing high-skilled human resources and raise awareness of using products in an environmentally friendly manner,” Hartikainen said.

Currently, Vietnam has begun to pursue a circular economic model in which the country is calling for the participation of businesses.

Over the past few years, the Vietnam Business Council for Sustainable Development (VBCSD) under the Vietnam Chamber of Commerce and Industry has been implementing a programme on supporting ­enterprises to materialise the circular economy. The programme includes the establishment of a centre for assisting enterprises in this endeavour.

The centre focuses on suggesting policies, incentives, and mechanisms to the government to build secondary material markets, introduce ideal practices of global enterprises to local businesses, and implement initiatives based on the public-private partnerships.

“We are calling for more businesses to join the programme,” said Nguyen Quang Vinh, vice chairman of the VBCSD. He admitted that awareness on the circular economy remains limited. “Only when awareness improves with specific actions, when the state provides more support for enterprises, and when we have a strong business community will we be able to materialise our circular economy.”

Meanwhile, Alava of IFC told VIR that all enterprises who want to develop their business would need some support, which will also ultimately contribute to the world’s efforts in saving the planet from heavier pollution.

“One company alone cannot save the planet. We are looking for like-minded change agents to join forces with us. We want to start an active, uplifting, and fruitful dialogue with countries like Vietnam,” Alava said. “Whether it has financial, brand, or other influential impact, we must keep in touch. The planet needs it, and we have the technology. By using it, together we change the world.”