HORIZON 2020 – INDUSTRY – Innovation & Research Action
Topic: New models and economic incentives for circular economy business
http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/2360-circ-04-2016.html
Introduction
It is well known that climate change is changing our society to the core1
. Without action the impact on
economy, health and environment will be dire. Demands on companies are expected to grow, while new
opportunities will arise for companies aiming for the circular and resource efficient economy. Project
INVALUABLE aims to explore these opportunities and describe how they can be supported and scaled
up with reduced climate impact, more efficient energy use and increased job creation possibilities.
Project aim
Project INVALUABLE (Incentives for Value Adding Business Leadership in Europe) will contribute to
business transformation to circular business models.
The project will identify barriers and opportunities a select group of companies are facing while they
are adapting to the circular economy and transforming their business models.
On this basis various incentives and policy measures will be analyzed and conclusions drawn on how to
develop incentives to further a transformation where companies can develop profitable business
models with low emissions and supported employment.
The project thus delivers to the topic New models and economic incentives for circular economy
business2
within the Horizon 2020 programme.
Background
The energy systems are the core of both cause and effect and it is through its' transformation that
many solutions can be developed. Succesful transformation towards zero emissions demands a broad
approach aiming for a completely renewable energy system in a resource efficient society förnybart
energisystem where innovations underpin both employment and environmental actions.
In a resource efficient and circular economy, as supported by the Swedish government and others3
,
there are both obstacles and possibilities. In some sectors and types of business, opportunities are clear,
such as within recycling and cleantech. For others, such as traditional and heavy ”base
industry”4
opportunities are harder to come by. Opportunities range from low hanging fruits to major
strategic, operational and business model transformations to reach renewable energy and fuel solutions
and low emissions of greenhouse gases.
The need for learning is great, but there are also success stories and significant potential for knowledge
sharing, systemizing and conclusions to be made. Especially concerning the types of incentives needed
to further the development and adoption of circular business models. IVA are carrying out a project
related to this, but without focusing on energyfficiency and the services sectors which this project will
approach5
.
1Alfredsson, Eva och Karlsson, Mikael (2016) Klimatpolitik under osäkerhet – kostnader och nyttor, bevis och beslut. Underlagsrapport till Miljömålsberedningen. Under utgivning på
Tillväxtanalys.
2CIRC-04-2016.
3Regeringen (2015) Circular economy – elements of the new proposal. SE Non-paper 2015-06-26 (se vidare på:
http://www.regeringen.se/contentassets/eb8110de24394134920d420fe30bc928/circular-economy--elements-for-the-new-proposal.pdf; Regeringen (2015) Sveriges
exportstrategi (se vidare på http://www.regeringen.se/contentassets/e2b2f540107143e99907cbe604a87ce2/sveriges-exportstrategi.pdf).
4Energimyndigheten (2015) Industrins långsiktiga utveckling i samspel med energisystemet. ER 2015:18. Energimyndigheten: Eskilstuna.
5IVA (2015) Resurseffektivitet Fakta och trender mot 2050. Se vidare på: http://www.iva.se/globalassets/info-trycksaker/resurseffektiva-
affarsmodeller/201504-iva-rfsk-rapport1-d.pdf.
Project idea
The business model is the tool or the formula by which the company creates its revenues and profit. It
is the tool that creates customer value and thus secures the survival of the company. Several circular
business models have proven successful and the expectations within the field is growing. Given the
increased global resource shortage, its is a reasonable prediction that linear business models will
become gradually or abruptly non-profitable. That the majority of European companies work with
linear business models is clearly problematic. The need for change is imminent and the project will thus
identify and develop various types of circular business models that can provide increased profitability
through better customer offerings (value propositions) simultaneously with increase environmental
prestanda and reduced vulnerability towards market and resource volatility. In order to stimulate an
incrased number of companies to use circular business models more understanding is needed regarding
the building blocks and drivers, spurring the use of circular business models in specific companies and
sectors.
In general, a company's business model is said to contain components within these three main
categories:
-Resurseces and competences
-Organization
-Value proposition
These are equally important in circular business models. The project will identify critical success factors
and bottle necks within each of the three building blocks, and compare composition, structure,
organization and construction of each of the important elements within each block. The project will
focus on investigating companies that work with linear as well as circular business models within energy
and energy efficiency measures and the services sector, or could move into the services sector. The
comparison should focus on important differences in organization, resources, competences and
creation of value propositions. The project will test the hypothesis that the company's way of
preceiving, valuing and handling internal and external resources and competences will result in
different business models. Differences could explain why companies facing challenges like low
profitability, reduced customer satisfaction, resource shortage and incertainty fail to change their
business models. The project will analyse similarities and differences in circular business model
efficiency in different parts of the value chain. This will enable identification of gaps and build a base
for analysis of how existing business models could change and how bottle necks could be handled.
This will provide input into developing policy measures and other incentives stimulating change will
result in recommendations and suggestions aimed at companies as well as the political sphere.
All in all the project will contribute to develop the field of knowledge regarding circular business
models, which will lead to significant energy and resource savings with high potential for job creation.
Te project will deliver this by looking at various parts of the value chain and identifying possibilities for
increasing value and reducing energy and materials consumption in each step of the chain. This will
help deliver EUs climate goals for 2050 but also reduce the dependency on external energy resources
like oil. Also the job creation aspect adds value to the stability of the European Union.6
Finally the project aslo helps deliver to the newly adopted UN goals # 12 Sustainable consumption and
production patterns och # 13 Climate change.
CONTACT: Carolina Andrén, 2050 Consulting AB (Sweden) +46-727072880
carolina.andren@gmail.com
https://www.2050.se/
6 http://www.eea.europa.eu/about-us/competitions/waste-smart-competition/recycling-rates-in-europe/image_view_fullscreen