How circular is the Flemish economy?

The Government of Flanders aims to make Flanders a circular frontrunner in Europe. It wants to do this by investing in circular innovation, uncoupling the material footprint of our consumption from economic growth and reducing it by 30% by 2030.

With a circular economy we limit the environmental impact of our economy, we become less dependent on the import of expensive raw materials, and we create opportunities for (social) innovation.

There is also a strong link with the climate: two-thirds of our CO2 emissions are caused by the extraction, processing, consumption and recycling/disposal of materials (for all needs: food, energy, construction…).

But to know if we are on the right track, we need data. We have to measure so that we can steer policy. That is why Flanders Circular and the Circular Economy Support Centre are launching the Circular Economy Monitor. Below, we give a brief summary of the main findings.

The Government of Flanders aims to make Flanders a circular frontrunner in Europe.

How circular are we now? Enter ‘The Cyclical Material Use Rate‘

21%. That is the short answer to the question of how circular the Flemish economy is. It is the circularity figure (cyclical material use rate – CMUR) for Flanders in 2018. In 2014 this was 16%: we therefore seem to be making progress, mainly due to increased recycling.

The long answer is of course more nuanced: the circularity of the Flemish economy cannot actually be summed up in a single figure. Because of the underlying calculations, each figure has its own strengths and weaknesses. Just like the gross domestic product (GDP): this would increase, for example, if we all bought a new smartphone with increasing frequency and discarded our old ones, but the figure says nothing about unwanted effects such as the associated mountain of waste or missed opportunities for an upgrade or repair. Simply aiming for a higher GDP, without knowing the underlying dynamics, is therefore not healthy. This also applies to indices such as the CMUR.

The CMUR calculates how many tonnes of material in our total processed materials come from secondary origin (recycling and reuse). The more tonnes of secondary origin with stable processed materials, the higher the percentage.

• Problem 1: Our impact abroad is not counted. The following applies to the CMUR: the lower the domestic consumption, the higher the figure. This domestic consumption only refers to materials that we use here. The figure therefore does not take into account any tonnes of material that cause our consumption ‘upstream’ abroad. So if we increasingly outsource the production of biomass (wood, crops…), and the production of ores and heavy industrial activities to foreign countries and only use the (light) finished products here, our circularity figure increases, even though we have actually done nothing more circular.
• Problem 2: the quality of recycling is not counted. The CMUR only looks at weight and does not take into account the quality of recycling. Whether we grind our old bricks into tennis courts (low-grade recycling) or reuse them as bricks in new buildings (high-quality reuse), it doesn’t matter to the CMUR. One tonne of tennis court clay is equal to one tonne of bricks.

To get a thorough picture of the circularity of our economy, we should therefore look deeper. We do this by looking step by step at the materials accounting of the Flemish economy. We summarise this in the diagram below.

Findings

1. Large material requirement, highly dependent on imports

The Flemish economy is an extensive system that moves 342 million tonnes of materials every year. Those 342 million tonnes include everything that passes ‘through the hands’ of Flemish companies: we count both the materials used in production processes that are consumed here, and the materials that are transported by Flemish companies via Flanders for import-export. 87% (296 million tonnes) of those 342 million tonnes of materials are imported. About half of these materials are fossil raw materials for energy production or further industrial processing.

In the diagram: DMI (direct material input). The DMI of Flanders has been increasing in recent years.

The DMI does not take into account commodities that are used abroad to keep our economy running. It just looks literally at tonnes of imports and domestic extraction. For example: an imported mobile phone only counts for its weight, roughly 120 grams. To complete the picture, we have to look at the Raw Materials Input (RMI): that figure calculates the raw materials needed at home and abroad to feed our total economy (including our exports). For example: an imported mobile phone counts for all the raw materials that were needed from the mine to the user: mainly 34 kilos of ores and 100 litres of water. The Flemish RMI increased from 567 to 642 million tonnes between 2010 and 2018.

If we refine that RMI and only look at the amount of raw materials needed at home and abroad to feed our domestic consumption (i.e. without our exports), we speak of Raw Material Consumption (RMC). That is the actual footprint of our consumption. The figures are increasing: from 176 million tonnes in 2010 to 191 million tonnes in 2018. Flanders has the ambition to reverse this trend and start a decrease of -30% compared to 2010 by 2030.

2. A lot of material is destined for export

Flanders has an open economy. Most materials, whether or not after processing, flow through our economy and back abroad (see the purple line). Our Flemish industry is therefore at a junction: it can export its own circular know-how and play a pioneering role in circular solutions in international trade. The European Green Deal is also creating favourable market conditions in this area. Each type of material has its own optimal cycle: sometimes local (e.g. biomass waste), sometimes regional (e.g. scrap), sometimes international (e.g. electronics).

Due to these large exports, domestic material consumption (DMC) is much lower than total input (DMI): 132 million tonnes versus 342 million tonnes. In other words: 38% of the materials that pass through our economy are intended for our own consumption. So we consume 20 tonnes of materials per inhabitant. The DMC of Flanders has been constant over the years.

For Flanders, the DMI (input) increases with a constant DMC (consumption). That points to a growing export figure. The rising RMC (total raw material consumption) with a constant DMC (consumption) points to a growing outsourcing of material-intensive activities abroad (mining, blast furnaces, biomass production…).

3. High environmental pressure

Heavy use of materials inextricably leads to heavy environmental pressure. We are not only putting great pressure on finite resources in the world, but there is also a strong link between materials use and climate change. Indeed, two-thirds of domestic CO₂ emissions are caused by the extraction, processing, consumption and recycling/disposal of materials (for all needs: food, energy, construction…). The greenhouse gas emissions of the Flemish economy are stagnating at a high level of 78 million tonnes per year. This is purely domestic emissions: the emissions caused by our consumption abroad are not included.

If we also take foreign emissions into account, we are talking about our carbon footprint. In 2016, the carbon footprint of consumption in the Flemish Region amounted to 14.2 tonnes of CO2 equivalents per inhabitant. Despite an increase in consumption expenditure and investment, the modelled carbon footprint decreased between 2010 and 2016 by 2.9 tonnes of CO2 equivalents per inhabitant (-17%). Yet the carbon footprint is still too high. To limit the average global temperature increase to 2°C, global greenhouse gas emissions must be reduced to an average of 2 tonnes of CO2 equivalents per inhabitant by 2050.

4. Water consumption stable, reuse on the rise

The water consumption in Flanders fluctuates around 750 million cubic metres per year. Less than half of that is the consumption of tap water.

Overall, water consumption remained relatively stable, but some trends can be observed. Between 2000 and 2018, groundwater consumption decreased by 31% and mains water consumption by 6%. The consumption of surface water increased by 6% (which can be partly attributed to a new liquefied gas plant in Zeebrugge), the use of rainwater by 22% and the use of other water quadrupled.

An important observation – certainly in the light of circular water use – is the increase in water reuse in companies (still modest in m³ but the share is rising sharply). This mainly concerns the reuse of own waste water.

It is also worth mentioning that although water consumption remained relatively stable, water productivity has risen sharply (in relation to GDP).

5. Waste: less from households, slower rise from industry

Flanders is engaging in so-called decoupling in the field of waste production: the amount of waste in households is going down, while the household budget remains almost constant. This is an absolute decoupling: the trend is downward in absolute numbers. We see a relative decoupling in industry: waste production is rising less quickly than growth in economic activity (GDP). The trend is therefore (still) rising, but no longer in step – the rise is slowing down. Note that these are figures from before the corona virus crisis (up to and including 2019).

Flanders produces 36 million tonnes of waste every year. Total household waste in Flanders has been falling, by 45 kg from 522 kg per inhabitant in 2013 to 477 kg per inhabitant in 2019. The residual waste in this still accounts for 143.5 kg per inhabitant per year. That has decreased by 15 kg or 9% since 2013. The government of Flanders wants to further reduce this to 138 kg of residual waste in 2022 and 100 kg in 2030.

Between 2007 and 2011, we see a decrease in the amount of industrial waste. From 2012 we see a steady increase again, accompanied by the improving economy. But that increase is slowing down, as mentioned. The production of industrial waste in Flanders is relatively high: the considerable production for export plays an important role in this.

About 20% of household and industrial waste is incinerated or sent to landfill. They are the least desirable destinations for waste. These figures have been stable over the years.

6. Flanders is strong in recycling; we are taking steps towards higher-value circular strategies

In recent decades, Flanders has strongly focused on the selective collection of waste and the development of a recycling industry. This is reflected in the figures: we are recording high recycling rates. However, that is not the end of the matter, because a large part of this is low-grade recycling (converting building materials into granulate for road foundations, for example). The challenge for Flanders lies in making higher-value strategies mainstream, in addition to recycling: less use of materials, extension of lifespan through maintenance and repair, as-a-service models, eco-design, reuse, remanufacturing, innovative and high-value use of (biomass) residual flows…

Of the total amount of household waste (including construction and demolition waste), 67% goes to an establishment for recycling or composting. 68% of industrial waste is given a second life. That becomes 79% if we add the recycling and reuse of construction and demolition waste. The figure has increased by 10% in the past ten years.
The production of secondary (recycled/reused) raw materials amounted to 29 million tonnes in 2018 (35 million including composting and reuse) and is increasing.

The total reuse of consumer goods (white goods, electrical, household goods, textiles, furniture…) – whereby we do not recycle them (convert them into raw materials) but reuse them in their entirety through formal and informal channels – was 34 kg per inhabitant in 2019, or 224 thousand tonnes.

Employment in circular sectors and activities is increasing almost 3 times faster than the Flemish average. The turnover of Flemish thrift shops has grown strongly since 1995 from 1.1 to 61 million euros per year.

Just under 20% of companies reuse waste, residual or by-products for the same process. More than a quarter of companies ensure that their products can be easily repaired or recycled.

7. The bulk of our material consumption remains in the economy

71 million (85%) of the 84 million tonnes of materials we use annually for applications other than energy production somehow remain in our economy. We call this ‘net additions to the stock‘. In concrete terms, the majority of materials will be found in the construction sector: we import building materials and ‘stock’ them for years in the form of houses or office buildings. These materials are therefore not lost and offer opportunities to close new cycles later on. For example, if we start building in a more change-oriented or ‘disassemblable’ way now, the stock we build up can pay off for our economy later on. In an increasing global competition for raw materials, good inventory management is a strategic asset.

8. In detail: circular mobility, housing, consumer goods and food

The Circular Economy Monitor also zooms in on a number of so-called ‘need systems‘: mobility, housing, consumer goods and food. By looking at systems of needs, and not, for example, at sectors (construction, car industry…), we can look at the indicators from a broader perspective. Our (circular) economy must meet these needs in any case, that is inevitable. The way in which we fulfil those needs can vary greatly. For example, a mobility need can be met with wider roads, more cars, longer buses, more trains, more shared cars, and so on. Therefore we will not only look at the production of cars and houses, but at the most complete picture possible at the level of need. We share the key findings.

Mobility: more cars that last longer and are recycled to a high degree

Together, the people of Flanders own approximately 3.6 million cars. This number has increased by roughly 10% in the last ten years. A vehicle offered for scrap has an average of 193,000 km on the clock (2020). More than 90% of the parts and materials of end-of-life vehicles will be given a second life (2020).

Housing: ever-growing use of space, high degree of recycling in construction

Space occupied by buildings is constantly increasing. In 2019, 28.5% of Flanders was built-up. The total residential floor space increased by 4% from 1,174 to 1,224 square kilometres between 2016 and 2020. There is still significant untapped potential in the market in the form of 6.3% vacancy (2020). The recycling percentage – high-value and low-value together – for construction materials is 96.6% (2016).

Consumer Goods: 50% of electrical appliances is collected selectively, 80% of which is recycled, and second-hand use is an important circular channel

Flemish households have 240 million items of electronic devices (2019). About half of what comes on the market is selectively collected and then about 80% recycled (2019). The charity shops collect 88,000 tonnes of goods annually (2019) and put 36,000 tonnes back into circulation. That’s 5.5 kg of reuse per inhabitant, quite apart from other (informal) second-hand channels. The total reuse of consumer goods (white goods, electrical appliances, household goods, textiles, furniture…), where we do not recycle them (conversion into raw materials) but reuse them in their entirety through formal and informal channels amounted to 34 kg per inhabitant in 2019, or 224,000 tonnes.

Food: we see efficient food production, a high impact of consumption and production on the environment and resources, and composting and fermentation of manure and organic industrial waste on the rise.

Food has its own challenges in terms of circularity. The flows are circular in themselves: food essentially moves from field to fork to field. You can also only apply ‘higher’ circular strategies to it to a limited extent, such as reuse and recovery: food perishes and can only be used once. There can still be more circularity in the form of (1) less pressure on resources in primary production, (2) combating overconsumption and food losses, (3) using residual flows at an increasingly high-value level. The Bioeconomy Policy programme is already focusing on this, for example.

9. Flanders takes up the challenge

As stated above, in recent decades Flanders has strongly focused on the selective collection of waste and the development of a recycling industry. But much remains to be done, because a large part of that recycling is low-grade recycling. The challenge for Flanders lies in making higher-value strategies mainstream, in addition to recycling: less use of materials, extension of lifespan through maintenance and repair, as-a-service models, eco-design, reuse, remanufacturing, innovative and high-value use of (biomass) residual flows… We must take these steps for industrial-strategic reasons as well as for ecological reasons. Further development of our data should allow us to gain insight into these kinds of underlying shifts and their economic effects – which are now often hidden in the general figures.

The public-private partnership Flanders Circular coordinates the efforts. Within the partnership, six themed strategic agendas (construction, bioeconomy, chemistry/plastics, manufacturing industry, food, and water cycles) are working on concrete actions for the short term. Flanders Minister of Economy, Innovation, Work, Social Economy and Agriculture, Hilde Crevits, and Flemish Minister of Environment and Energy, Zuhal Demir, are investing around 120 million euros in circular innovation between 2019 and 2022. Flanders is also investing further in research and monitoring of its own performance with the Circular Economy Monitor and a new Centre for Circular Economy for the period 2022-2026.

Naar een circulaire economie monitor voor Vlaanderen:
een eerste invulling door de OVAM (Dutch)

Macro-economic material flow indicators for Flanders 2002-2018

An economy wide circularity assessment in Flanders