EXPLORING VICTORIA'S EMERGING
CIRCULAR ECONOMY ECOSYSTEM

Executive summary

The aim of the research presented in this paper is to understand the current Circular Economy (CE) landscape in Victoria. Objectives arising were to identify the opportunities and gaps to be nurtured over the short term to support CE transition in the State of Victoria. This report represents a milestone point of the ecosystem mapping.

The research was underpinned by three main research steps: a desktop review, interviews with key stakeholders and a survey aimed at SMEs in Victoria. The desktop review highlighted that the sociopolitical tendency to measure policy outcomes, including a narrow set of waste related targets can have a negative influence on a systemic transition required to achieve circularity. The current focus on waste needs to be revisited to bring in step-change for systemic transition for CE. The existing policy targets also influence why CE is perceived to be a recycling strategy among non-experts.

Interviews showed that the focus is on recovery and recycling strategies with the primary consideration of waste resolution. A regulatory environment that is holistic in the approach to CE is critical. Businesses pay particular attention to financial sustainability in their R-frameworks, with recycling being the most commonly used R-prionciple. Alignment is vital between government, businesses, and the community to optimise CE interactions. Collaboration supports cross sectoral interconnections and nurtures the development of an ecosystem for circularity, when combined with knowledge, awareness, and education. The Sustainable Development Goals (SDGs) are well aligned to deliver on CE as some of the SDGs focus on resource efficiency, production and consumption practices, and associated environmental impacts.

The key insights from this research emphasise that currently Victoria has some CE engagement, but this is sporadic, and set in a largely linear economic system. There was no consistent understanding of CE among the stakeholders involved in this research. Focus is on end of pipe waste management focusing on recycling, rather than embracing a systemic approach and transition to CE paying attention to re-design, re-purpose and other such higher order R-principles. Some sectors of the state such as infrastructure are using recyclates, showcasing government as a good exemplar that can also influence private industry. Businesses are driven to proactively engage in CE/sustainability for ethical/moral underpinnings, however, financial sustainability is a necessary driver for both private and not for profit businesses. Bringing the technical, financial and social elements to formulate holistic CE solutions are needed, not just focusing on the technical. Clear CE metrics are needed, so policy, business and community share the same goals and can all be fully engaged.

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The research demonstrates the alignment between government levels and businesses through the alignment of desktop research, interviews, and surveys results regarding CE, CE principles and CE implementation. Desktop research showed CE underlined waste management and reduction due to the waste crisis. Interviews showed that the focus was on the recovery and recycling strategies with the primary consideration of waste resolution. Surveys also reported the same results that businesses underscored recycle and reduce in their CE strategies.

Collaborations need to be developed amongst different government levels and businesses. CE is not happening in one place or one country. It needs to be mainstream, which brings benefits and fairness amongst different generations, across different sectors and countries. Businesses and communities need to collaborate to create synergy benefits and CE practices. There is a need to have more cooperation in supply chains, where they can explore different approaches to use R principles of CE, or they can mine waste resources to other businesses, run different cycles in their business and gradually close the loops. CE improves collaboration and interconnections amongst numerous factors within an organisation and between an organisation and its ecosystem. The numerous factors include supply chain, circular business models, life cycles of products and materials, innovative technologies, and organisational structure, etc (Nair et al. 2017).

Perceptions, awareness and education related to CE need to be dramatically improved since these factors are either enablers or barriers to CE transition. Awareness and perception are crucial for the CE movement when getting consistent support from the grassroot level through their understanding and mindset to shift linear economy to circular economy. Otherwise, these factors become a major barrier to hampering this movement due to behavior resistance.

Education plays a vital role in enhancing CE perceptions and awareness. The confusion of CE as well as CE and sustainability still exists. 80% of interviewees mentioned education was one of key roles in CE transition. 4% of questionnaire participants noted that they haven’t heard about CE. Thus, education may be used to bridge this gap. However, there is still a lack of CE education programs in the school or university systems in Victoria while these CE programs have been developed in different universities across different countries such as Netherlands (Kirchherr and Laura, 2019), Spain (Bugallo-Rodriguez and Vega-Marcote, 2020) and UK (Mendoza et al. 2019).

Regulatory environment is significant vital in moving towards CE. As in the desktop research, the regulations and policies related to CE have been reviewed. 100% of interviewees highlighted regulatory environment was necessary for systemic changes in businesses and communities. Surveys results also showed that regulations and policies were crucial for business movement away from linear economy. However, regulations and policies related to CE need to be updated to support CE principles, such as standards of recycled materials or guidance for food and green waste.

As CE aligns with and promotes sustainable development goals, CE can be embraced through sustainability approaches which have been developed in Victoria for many years. Through survey results, it is an opportunity to use a solid understanding of sustainability from businesses to support CE understanding in businesses. Further, it can support CE through a planned strategic approach of vision and implementation.

Key Insights:

There doesn’t seem to be a systemic transition to a CE, but rather a move towards implementing and enabling circular business models within an inherently linear economic system.
Current policy targets don’t include upstream interventions for redesigning/rethinking production and consumption models. Focus is on end-of-pipe waste solutions which accepts inefficiencies in linear economies.
The common understanding of CE is that it is a micro or meso level resource efficiency concept rather than an economic system. This limits broader economic transition.
Practical applications of higher order R principles in business are commonly about using recyclate within the manufacturing process and not redesigning the need for the product itself in the first place. Circular business models (not recycling/recovery models) are still a fringe concept.
Although CE is theoretically an economic concept, it is championed by engineers and sustainability professionals/agencies focusing on technical solutions. Important factors within any economic system such as resource use, finance, and economic planning are handled by other agencies whose priorities may not align with sustainability agencies.
No commonly accepted metric is available to measure circularity, specially at a macro-level. This hampers its acceptance and adoption as a priority policy target.
There is significant action around use of recyclate in the infrastructure sector. Given the high visibility the infrastructure sector receives, this can increase awareness of the use of recyclate in products.
Business actions toward sustainability are driven for an ethical / moral reason to act. The financial viability of such actions are an important justification for both for profit and not-for profit organisations.

Support our future work

The ecosystem map that was developed in the first phase of this research will be validated through follow-up interviews and focus group sessions with key actors identified during the interview stage. These sessions will include the participants from the initial set of interviews as well as a broader group of stakeholders. During these sessions participants will be able to provide feedback on any changes that are required to the map and to validate the major enablers and barriers that have been identified so far in this research. This feedback will be used to modify the map and to provide recommendations to practitioners as a final outcome of this project.

Developing an ecosystem platform: The validated ecosystem map will be plugged into the VCA website where it will be available for the public to use as a living platform. This platform will be developed so that visitors to the site can obtain information on the Victorian CE landscape, major actors (including links to their websites), relevant examples/case studies and similar examples of demonstrations in practice. It also supports developing collaborations across different sectors, moving away silo thinking to build up business partners and support the creation of a systemic response with CE responses to perturbations in the system.

The main focus of this research was on analyzing the ecosystem based on business, regulatory and infrastructure aspects. Future research needs to focus on the socio-cultural aspects of CE, with a focus on trying to understand consumption patterns, consumer behavior and what drives consumers to transition from typical linear economic consumption to circular.

Future research will also explore the dynamic relationships between positive (drivers and enablers) and negative (challenges and barriers) forces at the macro, meso, and micro levels. This will help to refine a lens to monitor the maturation of the Victoria CE ecosystem from a systems lens.

Research team