Business opportunities of recycling material flows in circular economy hubs

Mika Jaakkola: Business opportunities of recycling material flows in circular economy hubs Master of Science Thesis Tampere University Master’s Degree Programme in Management and Information Technology August 2019 Examiner: Professor Marko Seppänen and Assoc. Professor Leena Aarikka-Stenroos The increasing use of resources, increasing consumption, and material prices are forcing us to consider alternatives to the current linear economic model. The circular economy is seen as the answer to these challenges. It allows resources and the materials processed from them to remain in circulation even after the end of the products life. The success of the circular economy requires more efficiently manufactured products as well as more efficient and rational treatment of end-oflife products. Circular economy hubs have been created in certain areas. They are responsible for waste management and further processing of the resulting recycled material. New businesses have also been created in these areas to develop the circular economy business. This study seeks to answer the following questions: How should circular economy hubs be developed so they would support the value creation of the businesses? How specific material flows are defined as having the potential for creating new business opportunities? The research strategy used is quantitative research method, which was carried out as an electronic questionnaire, by emailing the questionnaire to the selected target group of business executives and environmental experts in the public and private sectors. Previous scientific studies were used to build the theory of the subject and to provide the basis for research questions. The results of the survey are compared with the characteristics of current circular economy hubs operating in Finland, as well as with the potential of material side streams for business creation. At the same time, opportunities and barriers to circular economy business creation in the scientific literature are highlighted side-by-side with survey results. The results of the survey are then used to rank the main development areas of the circular economy hubs, as well as the tasks in order, and the results justified. The same is done for the business potential of material side streams. The results of the study indicate that the most important tasks of the circular economy hubs to support the business are to create functional synergies between different stakeholders, to transmit information, and to create platforms for piloting projects. The areas having the most of development needs in circular economy hubs are the communication between the firms operating in the area, the transparency of the side streams produced and needed by the firms, and the development infrastructure of the circular economy hubs. The most business potential in material side streams was seen in plastics (not containing PVC), electronics waste, earth metals, and wood construction waste. To use material side streams economically viable ways, they should be of uniform quality, available in large quantities, and evenly available. The locality of the materials is also an important feature as transportation costs increase the cost of utilizing the material. Expertise and lack of information, high costs of recycling processes, lack of services to re-recycle material, and poor suitability of materials were seen as barriers to reusing materials. Creating new business opportunities, corporate strategies, resource efficiency, and customer requirements drive business development towards the circular economy.