Head industry experts discuss the benefits of transitioning to circularity(both in the short and long term), what is missing today that would support the transition to a more circular economy, and where to start in initiating a circular economy model.
Featuring:
- Mathias Matner, Head of Sustainability and Advocacy for BE Coatings, Adhesives and Specialties | Covestro
- Dorothee Arns, Director General | FECC
- Dan Andersson, Global Head of Sustainability, Advanced Materials | IMCD
Click above to watch our recent video or keep scrolling to read a summary of the discussion.
Oftentimes, we see that small to medium-sized companies have limited resources, making initiatives for a circular economy more challenging. That's why we brought together i industry leaders to share their perspectives on this topic. Keep reading to uncover the highlights of each expert's comments.
What are the benefits of transition to circularity, both in the short and long term?
Mathias Matner, Head of Sustainability and Advocacy for BE Coatings, Adhesives and Specialties | Covestro
There are several key benefits to transitioning to a circular economy. In the short term, one of the most immediate impacts is reducing your environmental footprint. This includes decreasing your carbon footprint, as well as reducing the impact of raw materials and materials you buy. At the company level, transitioning from a linear to a circular economy allows you to reposition your company as a valuable partner for your customers, especially those focused on sustainability. This shift not only has immediate benefits but it also helps position your company for long-term success. Companies that embrace and lead the transition to circularity will be better prepared for the future than those that continue with traditional, linear, fossil-based business models.
In the long term, the shift from bio-based to recycled raw materials can further reduce your environmental impact. By creating valuable raw materials from waste, such as plastic waste, you contribute to reducing global plastic pollution. This is especially important in addressing the pollution of seas and oceans. In addition, there will be increasing regulatory demands that companies will need to meet in the future. Staying ahead of these regulations and transitioning to circularity will help ensure your company remains competitive and relevant.
Dorothee Arns, Director General | FECC
Reducing environmental impact is extremely important. In recent years, we've witnessed how extreme weather conditions, such as floods and heatwaves, are affecting the world. We can no longer afford to conduct business or live our lives at the expense of nature. The traditional approach of using resources once and discarding them, particularly plastics, must come to an end. This also applies to other resources like paper.
Transitioning to a circular economy is not just about being economically successful—it’s about contributing to a sustainable future. Companies today are evaluated based on how they contribute to society, solve major global challenges, and address environmental issues. This expectation comes from various stakeholders, including society, regulators, and even financial institutions. For small and medium-sized enterprises (SMEs), it is essential to demonstrate how they are applying sustainability principles, especially when seeking financial support. Being proactive in circularity can offer competitive advantages and build stronger, more lasting customer relationships.
Dan Andersson, Global Head of Sustainability, Advanced Materials | IMCD
The environmental benefits of transitioning to a circular economy are clear. In the short term, circularity enhances resource efficiency, reduces waste disposal costs, and improves supply chain resilience. It also boosts brand value and consumer loyalty. However, small and medium-sized companies may face some initial challenges, such as the upfront investment required for new processing equipment or redesigning products. This can lead to higher costs, which may be passed on to consumers.
It’s crucial to communicate the long-term value and sustainability benefits of circular practices to customers. Although the initial costs may be higher, in the long run, these investments result in cost savings and more efficient resource management. Additionally, circularity fosters innovation, enabling businesses to explore new models like offering reusable products as services. This can open up new markets and revenue streams. While the transition to circularity may present short-term challenges, the long-term benefits—including financial savings, environmental impact reduction, and innovation—make the effort worthwhile.
What is the industry missing today that would support the transition to a more circular economy?
Dorothee Arns, Director General | FECC
The transition to a circular economy faces several hurdles. First, there is a need for standardization. The industry and its value chains are complex, and implementing circular economy initiatives is challenging due to the variety of standards and framework conditions across different sectors. This lack of consistency can confuse, particularly for distributors and other players in the value chain.
An enabling regulation with cost-effective framework conditions would make it easier for businesses to comply with regulations, which is essential for encouraging smaller enterprises. Further, it is critical to have comprehensive knowledge of the entire value chain—from suppliers to customers—and foster collaboration across the value chain. Circular business models require close cooperation, not isolated efforts. Additionally, access to venture capital, particularly for small and medium-sized enterprises (SMEs), is crucial. Although funding is available, many SMEs struggle with how to access it. In summary, regulatory support, knowledge-sharing, collaboration, and financial assistance are all needed to accelerate the transition.
Dan Andersson, Global Head of Sustainability, Advanced Materials | IMCD
One of the main obstacles is the lack of infrastructure for recycling and reusing chemicals. Recycling technologies currently struggle to manage the complexity and scale required for circular practices, though improvements are being made. Investment in advanced recycling facilities is key to overcoming this challenge. Additionally, there is a pressing need for standardization in material quality, recycling processes, and data measurement to ensure efficient collaboration and scaling of circular practices. Harmonized regulations are essential to avoid confusion and drive consistency across the industry.
Additionally, it must be emphasized how important it is to see collaboration across the value chain. There needs to be effective communication and partnerships between raw material suppliers, manufacturers, recyclers, and end users. This collaboration can drive innovation and streamline circular practices, enabling more widespread adoption.
Mathias Matner, Head of Sustainability and Advocacy for BE Coatings, Adhesives and Specialties | Covestro
The biggest need is a change in mindset. Transitioning from a linear to a circular economy requires not only professionals but also consumers and society at large to shift their thinking. Beyond this, customers often have unrealistic expectations, comparing small circular initiatives to global climate impacts. While each small action may have a modest impact, it is the cumulative effect of these efforts that will bring about meaningful change. Industries must manage expectations and avoid focusing on finding a single game-changing solution.
Furthermore, the regulatory frameworks are overly complex and difficult to navigate, even for large companies. Simplifying regulations and providing clearer guidance would allow businesses to better comply and keep pace with evolving requirements. Something we could benefit from is creating a “return channel” to facilitate the circular flow of materials, which requires both technical development and collaboration across industries. While some recycling technologies are still under development, he stresses the importance of patience and openness to new technologies and processes.
Lastly, there needs to be further flexibility in regulations, allowing industries to innovate and develop the necessary loops for circular economies. He also emphasizes that closing the loop in one industry for reuse in another is key to making circular systems work across broader sectors.
For those looking to take steps in integrating a circular economy model, what is a good place to start?
Dan Andersson, Global Head of Sustainability, Advanced Materials | IMCD
Starting the journey toward a circular economy might seem overwhelming, especially for small and medium-sized businesses. However, there are practical steps you can take to begin. Start with conducting a baseline assessment of your operations to identify where waste is being generated and where resources might be underutilized. This will give you a clear starting point and a better understanding of where you stand and where improvements can be made.
We've discussed the importance of mindset in all three questions, and it's crucial when transitioning to a circular economy. Engaging stakeholders is key—getting everyone on board, from leadership to employees, suppliers, and customers. Creating a shared vision across the board is vital. Something that Mathias mentioned was very inspirational—while each small step we take may seem insignificant on its own, together, these small changes can create a much bigger impact. You don’t have to be a large company to make a difference in sustainability. By working together, small and medium-sized businesses can drive significant change.
Finally, one of the most important steps is considering new innovative materials and solutions that can accelerate your journey toward a circular economy.
Mathias Matner, Head of Sustainability and Advocacy for BE Coatings, Adhesives and Specialties | Covestro
Start by investigating raw materials that come through a mass balance process. This means that while an alternative raw material is used along the value chain, the final product maintains the same quality and technical specifications. It’s essentially a “drop-in” solution, meaning no additional technical development is needed for small and medium-sized enterprises (SMEs). You can continue using the same tanks, installations, equipment, and formulations, while still offering the same proven product to your customers.
In addition to testing the market, it’s important to run a marketing campaign—creating new brochures, printing updated labels, and advertising the sustainable aspects of your products. This will help you identify which niches are interested in a circular economy offering. Even larger companies can start with smaller parts of their product portfolio to test the waters. They can explore using mass balance raw materials in a way that allows them to transition to a circular model gradually. By starting small, you can learn a lot about how to market these changes, what triggers your customers’ interest, and what value propositions appeal to them—whether it’s the carbon footprint, bio content, or alternative materials. This approach also helps you save on technology development costs while offering a high-quality, proven product.
Furthermore, by transitioning toward a circular economy, you’ll create new networks and open opportunities for collaboration. It could lead to new business models that weren’t possible in a traditional linear economy, such as leasing products. These new connections and ideas will be essential for a successful transition to a circular economy.
Dorothee Arns, Director General | FECC
Start with the end in mind. Think about the whole process and solution first, asking what we want to achieve, and then work backwards from there. This applies to both the product and the substance itself—what happens to it at the end of its life cycle? This is crucial, especially when considering materials like plastics. While plastic is a good product, its improper use creates issues like littering.
Consumers also need to be brought on board during the transition, and this is true not just for plastics but also for other materials like glass, paper, and paperboard. When we approach sustainability from this end-of-life perspective, we’ll be better equipped to identify like-minded partners along the value chain.
A great feature of distributors is their knowledge of which substances and products can be used across different value chains, even outside of the chemical industry. This will help bring together new value chains that may not have been in contact before, facilitating cross-industry collaboration.
It’s also important to continuously evaluate your current processes and be open-minded to redesigning them. This is something FECC facilitates by bringing together value chain partners. As both Mattias and Dan mentioned, the mindset should be that the journey is the goal. The task of transitioning to a circular economy is complex, and we must approach it step-by-step, learning from both successes and failures. There won’t be an immediate, one-size-fits-all solution, but with determination, we can create meaningful change.
IMCD Industrial Solutions | Sustainable Solutions Program
IMCD is committed to breaking down complex sustainability topics to support you at every step of your sustainability journey; whether you’re at the start or looking to optimize your current efforts. Click here to learn more about our Sustainable Solutions program and explore the sustainable materials we offer in your area.