This Wednesday, the Eurochile Business Foundation organised a successful international webinar to analyse the role of the circular economy in a sustainable recovery after the COVID-19 crisis, which had nearly 400 attendees from Chile, Latin America and Europe to listen the presentations by the Director General of Environment of the European Commission, Daniel Calleja, and the Manager of Circular Economy at Enel Holding, Luca Meini.

In a conversation that was moderated by the Executive Director of Eurochile, José Aravena, both delved into the progress that is being made in Europe in terms of circular economy, the importance that the Green Deal will have as the motor for recovery, the role of the energy sector in this task, and also the opportunities that open up for innovation, new business models and -in particular- for small and medium-sized companies in a more sustainable future economic development.

At the beginning of the seminar, the President of Eurochile, Vicente Caruz, affirmed that our country has been affected in recent months by a triple crisis: social, climatic and the coronavirus pandemic. “Then, the task of facing a recovery that is environmentally, economically and socially sustainable appears as gigantic and urgent.” And in a scenario where the State contributes large resources for the emergency and stimulates economic activity to recover jobs and productive capacity, Caruz said, “how these resources are invested will be the key to a recovery with a medium and long-term future.”

“The circular economy,” added Caruz, “then appears as a main tool to face the double challenge of achieving ecological and environmental balance that allows a more integrated existence, and in the long term, subsistence. And on the other hand, achieving high levels of comprehensive productivity – not only economic and financial – that can allow citizens with their families to end insecurities that are preventing them from living in a balanced way. This is essential to end a widespread social unrest that prevents the normal functioning of society and the economy. ”

For this, it is necessary that the circular economy is inserted into productivity and reaches all the productive sectors, with joint work between all the actors but also with a strong focus on sustainability. In this regard, the Ambassador Stella Zervoudaki, Chief of the European Union in Chile Delegation, stated that solidarity, cohesion and convergence are essential to address the current health challenge, but also the subsequent challenges. “The other thing that this pandemic has shown us is the importance of sustainable coexistence between humans and nature. We cannot continue producing in the same way that we have, and it is very important that we achieve a balance if we want development for the next generations”.

In this context, Paolo Pallotti, country manager of Enel Chile, agreed that we are experiencing a deep and unprecedented crisis, but that at the same time it can offer us an opportunity, “because this is the time to act, to make decisions to ensure the future. And the energy sector is at the center of the economy and has a very important role; today a profound transformation of this sector is possible, and in Chile there is this opportunity”.

In this sense, he recalled that from 2022 Enel will not have coal-fired units producing energy in Chile, and also with the commitment to “develop new renewable capacities. We have a goal; we are working on the development of new projects to add 2,000 MW of capacity until 2022. That is a year where the exit of coal solutions and the entry of new renewable capacities will be coordinated. And this is going to have an impact on all productive activities”.

Europe’s sustainable strategy for recovery

The coronavirus crisis has hit hard our economies and societies globally, a crisis which no one has been immune, to the point that we are already beginning to speak of a pre and post pandemic world, said Daniel Calleja, General  Director of Environment of the European Commission. And although the work is, today, focused on facing the urgency of the health challenge, he added, “we have to rethink how we are going to develop our lives, our economies and our societies after the crisis. We have to work on recovery now. ”

And in that context, he recalled the words of the UN Secretary- General, Antonio Guterres, inviting “to build back better”. “And for this,” Calleja said, “we have to put sustainability at the center of our agenda. An economic, environmental, social and inclusive sustainability. And Europe puts on the table the European Green Deal, which aims to transform our society in the next 10 years, our energy, our transport, our food systems, and a linear economy that is already expired by a circular economy and to work so that the main points of the agenda are based on sustainable development. What is not sustainable is not viable; no company can be competitive today if it does not have a sustainable business model”.

Why should this Green Deal be at the center of recovery? First of all, he said, because after the health crisis we will continue to have climate and biodiversity crises, which will continue to threaten the poorest and weakest people and states. And second, because in a recession, getting out of it requires stimulating growth and employment, without moving backwards on environmental challenges.

“Green investment and circular economy are the best way to create growth and employment, and to recover our economies, because the only sustainable model is the one that is capable of decoupling economic growth from emissions and excess consumption of resources. More than half of the world’s GDP depends on nature and the services it provides, investing in nature is investing in our future”, he said.

To achieve this, Europe will work on four lines of action. First, a climate strategy – to become in 2050, the first climate neutral region by 2050.

Second, the circular economy through a new action plan in order to be more efficient in the use of resources. Added to this is a strategy for 2030 for the conservation of biodiversity, and finally the “farm to fork” strategy to promote a sustainable agri-food sector.

Regarding the circular economy action plan, Daniel Calleja explained that he seeks to go far beyond the mere management and recycling of waste. “We have a vision in Europe: that every product that is put on the market is circular. If we are able to do it, we will achieve more innovation, more growth, more employment and more competitiveness. For this, it is necessary to work throughout the life cycle of the products, focusing on their design, promoting circular economy production processes, promoting sustainable consumption and ensuring that the resources used remain in the economy as long as possible. That the waste of one company is the raw material of another, the industrial symbiosis”, he explained.

For this, sectors with a key potential in this area have already been identified, where innovative technologies and business models can be promoted and green jobs can be created. Among them are batteries; the automotive sector, which is a great generator of jobs; electronics, where you can work on design and material recovery; the textile sector, which only recycles 1% of products and produces more emissions than sea and air transport combined; plastics, where Europe has led in the restriction of single-use plastic; the packaging sector, and the food and construction sectors, which have great opportunities for SMEs.

In these areas, said Daniel Calleja, “we are very impressed with the work of Chile. There, once again, Eurochile immediately saw the opportunities of the circular economy. I have a wonderful memory of the first European circular economy mission where the first country in the world was Chile and it was an overwhelming success. We know that Chile is following a similar path with the roadmap for the circular economy for the next 20 years. And here is a very important element: we have to work this transition together. This will require adaptation, which will involve education, training and work. And recovery has to be global; it requires a response from everyone. We would like to articulate these global efforts, because solidarity and multilateralism are crucial, that is the path and the agenda that we want to share”.

The role of the energy sector in the circular economy

The circular economy is not recycling or managing waste, it involves completely redesigning the business model, said Luca Meini, Manager of Circular Economy at the Enel holding, and this implies doing it from the design, material selection and engineering phase. “That is the most important thing, then comes the part on how we are going to maximize its use and at the end there is the reuse and recycling part, which must already be foreseen in the design. This is essential”. And in this sense, he argues, the circular economy has innovation as its central element, which is what feeds competitiveness.

Added to this is the role of institutions, where the European Union has had a very strong role, but this is also happening in many other countries -such as Chile- both at governments and at local levels in cities. And in this, Meini said, the vision of facing environmental challenges in an integrated way has been fundamental.

And in this, he added, the circular economy has also shown an interesting aspect in the decrease of centralised production to generate much more local work throughout the value chain, through maintenance and repair services. “COVID-19 is pushing even more in this direction, because it has shown more clearly the importance of resilience,” he added.

Enel, he said, has been working hard in circular economy for five years, among other aspects due to decreased risk, reuse of materials and a focus on innovation. “The circular economy approach pushes us to work even more on innovation, not only in technology but in everything we do. To this is added that the environmental benefits are very clear, as well as the positive social impact”, he stated.

The company’s objective, Meini added, is to have low levels of emissions by 2030 and to be fully decarbonised by 2050, and to this end they have developed a circular economy strategy throughout their entire value chain, including their suppliers.

“We are redesigning our main value chains, batteries, photovoltaic, wind, smart meters, which are the technologies that will have a very strong development in the coming years and we believe that it can be a very strong engine in the transition to economy circular. Through Enel X we are redesigning products and services for our clients, and we are very focused on the cities of tomorrow, where we also see very strong potential in the circular economy. And we are also working hard on creating knowledge, we publish our know-how and what we have learned together with other companies, because the issue of circular economy is still quite new and it is important to create awareness and discussion on this matter” , he claimed.

In this advance, said Luca Meini, the legislation will have great relevance in this matter, “because the circular economy is going to change the entire economic model, and also the legislative and regulatory aspects are going to be fundamental. There are several other aspects as well, such as innovation, metrics and culture that will be essential for everyone to understand this transition. ”

Advantages for SMEs in the circular economy

What role will SMEs have in this transition? According to Calleja, we are not only talking about large companies or the areas with the highest technology, but circularity will benefit all companies. “SMEs are going to be more efficient and more profitable; if they recycle more, if they reuse more, if they design their products better, they are going to reduce their energy and process expenses, and they are going to have a greater number of clients because there is an increasing interest in the so-called green products and services”, he said.

In addition, he said, they will benefit from innovation and the creation of a virtuous cycle with an important social dimension that implies new jobs, techniques and training. For that, Europe is generating a series of programmes to facilitate investment and financing of innovative projects in SMEs. “Now, with COVID-19, we want to put digitalisation and the circular economy as the two main axes of the European strategy. All the SMEs that present projects in these areas are going to have financing”, said Calleja.

What is sought, he added, is that companies – regardless of their size – can all contribute. “I think that the big winners of the circular economy can be medium and small companies, because they are the most flexible, because they have innovative opportunities, because they can develop new ideas”, Calleja said. For this there will be support from the European Union, he added, “also working with our foreign correspondents, and in Chile specifically with Eurochile, which facilitates the collaboration between European and Chilean companies.”

In this regard, Luca Meini added that Enel also has a series of initiatives to support SMEs, and among them the circular program “has in itself a support because it will train suppliers in measuring what they do. In the tenders, a higher value will be recognized to the circular suppliers, and there is the issue of co-design and collaboration with them to work together on the products”.

To this are added specific training and support initiatives for the most virtuous collaborators. “We are very focused on this issue, and the response from suppliers is quite good because today the awareness that this is the direction to go is clearer, and doing so with Enel is an opportunity for suppliers because the group has been one of the first to move towards these new business models”