Switzerland’s route to a circular economy

Circle Economy, in collaboration with Circular Economy Switzerland and Deloitte Switzerland launched in March 2023 the first Circularity Gap report (CGR) for Switzerland. It indicates that Switzerland's circularity rate – the rate at which used materials are cycled back into the economy – is 6.9%, lower than the global average of 7.2%, but also less circular than other countries such as the UK at 7.5% and Poland at 10.2%. Switzerland’s current position is unsustainable: the country consumes 163 million tonnes of virgin materials per year: around 19 tonnes per capita, significantly more than the estimated sustainable level at 8 tonnes per capita. This means that, to sustain its living quality and economic growth, Switzerland is causing environmental degradation and contributing to climate change, most of which takes place outside its territory (around 70%). To progress more sustainably, the circular economy provides pathways for societies to decouple economic growth from material use. As such, the first Swiss CGR provides five scenarios to achieve this, which are:

• embrace a circular lifestyle
• advance circular manufacturing
• rethink transport and mobility
• build a circular built environment
• nurture a circular food system.
  

Tackling the above scenarios would indeed provide ways for Switzerland to progress towards reaching its climate goals. The challenge, however, is that those are macro-level indicators, leaving economic and policy actors with the task of finding ways to actively incorporate these indicators into their own strategy. To support these actors and work collaboratively to build the roadmap for a more circular Switzerland, a multi-stakeholder coalition was created bringing together various industry, academia, and public sector stakeholders, including Circular Economy Switzerland and Deloitte Switzerland.

As part of this national roadmap effort, a first circularity incubator was organised at Deloitte Switzerland, inviting three major Swiss companies to share their most pressing circular challenges and allow for a first collaborative brainstorming towards the design of initial solutions. During the incubator, the following three main challenges were discussed with invited companies and participants:

A reverse supply chain should allow companies to receive back their products at the end of their life (i.e., post-consumer). The CGR provides an example of a value chain of this kind: Timberloop, from the apparel & footwear brand, Timberland. Timberloop is a platform that allows customers to return their used products to the company to give them a second life, thus keeping materials in use for as long as possible. If extended use is not possible for quality or other reasons, then those products would be recycled as a last resort. However, to be more reliable as a platform and sustain its own funding and further development, Timberloop needs to access a substantial volume of used apparel, to trigger the scale needed for development of the repair industry and second-hand market, and to bring in recycling players.

How can those challenges be addressed?

To address these challenges, several pathways were proposed. First, companies could develop new business models such as renting, where they would maintain ownership of their products across their lifecycle, hence making them responsible for potential repairs, and incentivising the design of products that are suitable for repair and extended use, as well as allowing access to higher volumes of pre-owned items. Second, companies should aim to improve the traceability of each product to have clarity over the entire value chain, including the components of each product, thereby facilitating sorting and recycling. This would also help to identify actors throughout the value chain and incentivise participation in the reverse value chain. Indeed, customers are usually not motivated to bring back their purchased goods to the seller as they prefer to bring their used clothes to standard recycling facilities. With higher level of transparency, companies could reward customers who are bring back their items and thus incentive them to close the loop. Innovative digital solutions would need to be created concurrently to support these pathways.

Many products and services use waste as inputs. This has many advantages, such as reducing the environmental impact of production and improving supply chain resilience. Along these lines, Holcim developed a new type of cement called Susteno which is partially composed of recycled construction and demolition waste fines (CDW) – as shown in the Swiss CGR. This new cement is an example of how waste can be upcycled given the right business model. However, there are substantial amounts of other CDW like de-construction concrete which are currently mainly downcycled and where it is challenging to access the needed amounts of waste to scale new ways of upcycling. There are many reasons for this, such as a lack of understanding or awareness of the value that can be found in waste, or a failure to discern the difference between “good” and “very good” sustainability practices, or to encourage one over the other. There is, indeed, differences between the different recycling / reuse practices as some practices are more energy- and resource-intensive than others. While the current practice of recycling de-construction concrete was progressive and a success story when it was introduced, it has not developed in parallel with today’s recent technologies. Using de-construction concrete as an alternative raw material for clinker and cement production instead of using it as alternative aggregates for ready-mix concrete production would generate huge resources and CO2 emission savings as compared to current practices. Switzerland does currently not differentiate between different recycling opportunities. This means that often waste is downcycled (like in the case of de-construction concrete) – recycled into something of lower value (such as road construction or low-grade concrete).

How can those challenges be addressed?

To address this challenge, several solutions were proposed at the company and country level. Companies could consider the PAS model (product-as-a service), allowing them to maintain ownership till “end-of-life” and be able to use it in new truly upcycled applications. Second, it would be valuable to work at the ecosystem level and work collaboratively to channel the CDW to higher value applications. Finally, at the country level, the role of the government in establishing a legal framework to drive circularity was identified. Considering fast evolution of technology in the recycling sector, the legal framework would have to be more frequently revised to implement granularity towards the different cycling practices.

Not all food packaging can be reusable or simply eliminated. For all types of packaging, recycling helps recover valuable resources and reduce our dependency on new raw materials to manufacture products. Migros is another example highlighted in the Swiss CGR, with its unique plastic-takeback program. By offering to the public an uncomplicated way to collect mixed plastic packaging such as pots, trays, and films, Migros is providing pathways to close the loop around plastic usage. This take-back system was first introduced by Migros and supports the transformation of plastics that shall be reused to produce new packaging and products. Currently, recycling mixed plastic packaging is an expensive activity, which means that recycled materials can rarely compete with virgin resources. There are many reasons for this. First, the stream of collected mixed plastics in Switzerland is not yet important enough achieve the economies of scale necessary to drive down the price of recycled materials. Second, recycling technologies still require considerable innovation and support to reach their full maturity. In addition to being expensive, there are physical limitations to recycling processes such as the colour and odour of the output. Currently, packaging in grey tones is not always appealing for the customers so there is limited willingness to pay extra for a more ecological packaging. Finally, the price of virgin materials does not fully reflect its externalities, meaning that the environmental costs are rarely considered.

How can those challenges be addressed?

There are ways to address these challenges. First, at a country level, it is important to provide financial incentives to make sure that the costs related to technology investments are not a barrier to improving the country’s recycling capacity. Government can play a key role here, since legislation can boost recycling activities in Switzerland. For example, legislation could encourage recycling companies to invest in better technologies by providing tax breaks for the ecological services they provide, i.e., reducing the Swiss carbon footprint. Moreover, politics could specifically support voluntary industry action and solutions: regulatory bodies and the private sector should work hand in hand to achieve the needed progress in circularity. These kinds of partnerships have proven most effective in the past. Second, encouraging customers to return their used products would be a valuable way to create a sufficient volume of mixed plastics to be used by companies. In return, this would allow recycling organizations to reduce the marginal costs associated with recycling. To achieve this, educations on the value of plastic recycling or providing rewards to incentives customers could be ways to increase the scale of plastic-returns.

Switzerland has long been considered a leader in sustainability, an image enhanced by its natural beauty and pristine landscapes which attract millions of tourists every year. But with a growing population and an increasing demand for resources, the country faces significant challenges meeting the needs of its population while respecting environmental limits. The circular roadmap is an ambitious initiative that aims to address these challenges.

By working together, businesses, individuals, and policymakers can create a more sustainable future for Switzerland, its people, and its environment. With the first circularity incubator, some of the challenges and the workable solutions were identified. These solutions could serve as a baseline for the topic nationally and we will report in future on how Switzerland’s recycling initiatives are progressing.