What are the Nordics Key Sectors Ripe for Recycling
- Plastics
Only 13% of plastics are currently recycled, and much of it is downcycled. As plastics emit nearly 3 tons of CO₂ per ton burned, they present a high-potential area for circular solutions like chemical recycling and reuse as feedstock. - Textiles
Textiles have low recycling rates and are often incinerated or landfilled. Innovations in fiber separation and chemical recycling make this a prime sector for circular transformation, especially with EU targets for recycled content. - Steel and Aluminum
Both metals have high embodied carbon and are currently underutilized in secondary production. Improved sorting, purification, and circular supply chains can help meet growing demand while drastically cutting emissions. - Construction Materials (Cement and Wood)
Construction uses vast amounts of virgin material, much of which is overused or poorly recycled. Prefabrication, design optimization, and material recovery systems are now being developed to improve circularity. - Food Waste
Roughly 130 billion EUR of food is wasted annually in Europe. Solutions include redistribution, biowaste valorization, and converting residuals into biogas or biomethane—key to both food system efficiency and energy transition.
The Four Priorities for Nordic Policymakers
1. Set Clear Circular Targets Across Sectors
The EU must move from general aspirations to sector-specific mandates. This includes establishing recycled content quotas for plastics, textiles, and batteries, and enforcing landfill bans. For example, the Packaging and Packaging Waste Directive proposes 30% recycled content in packaging by 2030, creating billions in market potential. Clear targets provide the certainty businesses need to invest in circular infrastructure.
2. Price Externalities to Shift Market Incentives
Carbon pricing must be extended and fully internalized in material markets. Incinerating fossil-based materials like plastics is set to cost €300–400 per ton in CO₂ taxes. This changes the economics in favor of recycling and reuse. The expansion of the EU Emissions Trading System and Carbon Border Adjustment Mechanism ensures that CO₂-intensive products face real costs, pushing companies toward circular alternatives.
3. Build Enabling Infrastructure and Innovation Ecosystems
A robust infrastructure is essential to handle increased recycling and advanced waste sorting. Policymakers must support the deployment of new technologies like chemical recycling, digital tracing, and carbon capture utilization. Public-private partnerships and targeted R&D incentives are key to scaling these innovations and building the circular industrial base.
4. Ensure Fair Market Access and Limit Export Loopholes
Circular materials must be economically viable. This means ensuring product standards, labeling, and green public procurement favor recycled materials. At the same time, restrictions on waste exports and environmental dumping ensure materials stay within Europe’s circular loops. Coordinated action here will solidify Europe’s global leadership in sustainable resource use.
How are They Doing?
The Nordic countries are actively advancing circular economy initiatives by focusing on four key policy priorities: setting clear targets, pricing externalities, building infrastructure and innovation ecosystems, and ensuring fair market access. Here’s how each country is implementing these strategies:
| 1. Setting Clear Circular Targets Across Sectors |
- Finland aims to become a carbon-neutral circular economy society by 2035. The Strategic Programme for a Circular Economy sets objectives such as doubling resource productivity and the circular material use rate from 2015 levels, and capping the use of domestic primary raw materials to 2015 levels by 2035.
- Sweden introduced a national strategy in 2021 for transitioning to a circular economy. The strategy emphasizes sustainable production and consumption, toxin-free circular flows, and increased innovation.
- Denmark has developed a national plan aiming to transform its economy into a more circular one. While the plan outlines visions and aims, most measures are voluntary, and the European Commission suggests this approach might be insufficient to meet the targets.
- Norway has set binding targets for material recycling in household waste: 55% for organic waste by 2025, increasing to 70% by 2035; and 50% for plastics by 2028, increasing to 70% by 2035.
| 2. Pricing Externalities to Shift Market Incentives |
- Denmark plans to implement the world’s first carbon tax on agriculture, charging farmers €100 per cow to address environmental concerns. This tax aims to mitigate the negative externalities associated with greenhouse gas emissions from livestock farming. See the article from last year here on forumNordic.
- Finland is developing economic incentives to reduce natural resource consumption and CO₂ emissions. Measures include energy-related taxes and waste taxes to promote material circularity, as well as a mining sector tax commencing in 2024.
| 3. Building Enabling Infrastructure and Innovation Ecosystems |
- Finland showcased its circular economy innovations at the World Circular Economy Forum 2024, highlighting public-private partnerships and regional initiatives like the Helsinki-Uusimaa Circular Valley.
- Sweden appointed a commission within the National Board of Housing, Building and Planning to develop circular transformation in the construction sector. The commission’s tasks include mapping reuse and recycling operations, analyzing supply and demand of building materials, and examining digitalization potential.
- Norway conducted a study with Deloitte on improving circular economy practices within the construction and real estate sector, focusing on economic instruments and policy measures.
| 4. Ensuring Fair Market Access and Limiting Export Loopholes |
- Finland launched the voluntary Circular Economy Green Deal, encouraging organizations to commit to reducing natural resource use and promoting low-carbon circular economy practices. The initiative provides a framework for businesses, communities, and municipalities to integrate circular economy principles into their activities.
- Sweden focuses on encouraging companies to adopt digitalization strategies to transform into circular economies, aligning with the government’s digitalization strategy. The country also works towards a global agreement on plastics to reduce marine emissions of plastic waste and microplastics.
- Norway is launching the Green Industrial Initiative to accelerate the transition, create jobs, increase exports, and cut greenhouse gas emissions. The initiative aims to promote green innovation and sustainable development.
There is a great research paper available here for more details from Summa Equity
Photo: Bollegraaf & Lubo Recycling Solutions
