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Guiding Investigation 31 October Oct 2018 0830 31 October 2018

Circular economy - Italy is already dressed for the occasion

Everything is already in place for Italy to be a leader on the path to sustainable development. The most innovative companies already get it: circularity is good for business

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Italy does not know it yet (or, in any case, it is not fully aware), but the country is sitting on a little treasure. That treasure is called a circular economy and, according to the data, Italy is top of the rankings in this field.

THE DEFINITION
What is a circular economy? According to the Ellen MacArthur Foundation, possibly the most prominent think tank on the matter, a circular economy is one designed to be self-regenerative. There are two types of flows of materials in a circular economy: biological cycles, where the materials feed back into the biosphere, and technical cycles, where materials are recovered for reuse without entering the biosphere. Thus, it is an economy in which materials are reused in subsequent manufacturing cycles, reducing waste to a minimum and extending the value of products and resources for as long as possible. It combines the objective of becoming sustainable with that of being competitive.

The Ellen MacArthur Foundation has identified five key principles around which this model should be based:

  1. ECO-DESIGNING - Bearing a product’s lifecycle in mind from the very start of the design process and so designing it with features that allow for it to be disassembled and rebuilt.
  2. MODULARITY AND VERSATILITY - Prioritising the modularity, versatility and adaptability of a product so that it can be adapted to suit the changing conditions around it.
  3. RENEWABLE RESOURCES - Using energy produced from renewable sources, to facilitate rapid transition away from the use of fossil fuels.
  4. ECO-SYSTEMIC APPROACH - Thinking of the system as a whole and taking the cause-and-effect relationship into account for each different component.
  5. RECOVERING MATERIALS - Helping to replace primary raw materials with secondary raw materials taken from waste recovery chains, which preserve their quality.

THE EUROPEAN PACKAGE
A huge step towards developing a European circular economy was taken some months ago, on 18 April. Approved by a vast majority in the European Parliament, it consists of four directives on the circular economy, which place a particular focus on waste management. The idea, across the continent, is that this will change the way we view waste: it will no longer be considered a problem, but a truly important resource. It has been estimated that this will save companies 600 billion a year, create 140 million jobs, reduce CO2 emissions by 617 tonnes by 2035 and reduce waste bills.

The new legislation became law on 4 July. Its objectives are as follows:

  1. at least 55% of household waste will have to be recycled by 2025 (60% by 2030 and 65% by 2035) and landfill will have to be reduced (to an upper limit of 10% by 2035);
  2. 65% of packing will have to be recycled by 2025 and 70% by 2030;
  3. Household textiles and hazardous waste will have to be collected separately by 2025;
  4. By 2024 all member states will have to introduce separate collection for bio-waste and/or self-composting schemes for it to be recycled in the home;
  5. The introduction of a regulation that will facilitate food donations and reduce food overproduction and waste at every stage of the food supply chain, by monitoring it and its progress (in Italy, the so-called “Gadda” Law has already been introduced to this effect).

THE ITALIAN MODEL

Italy is known as a country with a strong tradition in manufacturing, but one that lacks raw materials. This is precisely where Italy’s propensity towards circularity comes from. Using 256.3 tonnes of materials for every million euros produced, Eurostat puts Italy in first place for efficient materials consumption, after Great Britain (which uses 223.4 tonnes of materials per million euros and, in any case, has an economy grounded more in financial services). Italy’s performance has improved since 2008: the country has halved its consumption of materials, which is much better than, say, Germany which today is using 423.6 tonnes of materials per million euros.

Italy is second in terms of industrial recycling, sending 48.5 million tonnes of non-hazardous waste to be recycled (that puts the country behind Germany, on 59.2 million tonnes, but ahead of France and the UK, on 29.9 million tonnes each, and Spain, on 27 million). This level of recovery allows for a saving on primary energy of over 17 million tonnes of petrol a year and reduces CO2 emissions by around 60 million tonnes, according to data fromAmbiente Italia (an Italian Institute focusing on Environmental Research).

The publisher Edizioni Ambiente is undeniably a leading force on these matters and in its book Economia circolare in Italia (Circular Economy in Italy), author Duccio Bianchi suggests some other data we need to take into account. For every kilogram of resource consumed, Italy generates (adjusted to the purchasing power standard, or PPS) 4 euros to GDP, against a European average of 2.24. The values fall between 2.3 and 3.6 in all the biggest European economies (it is common to see lower values than this in Eastern European economies, even with the large turnover seen in certain industries). In addition to already having efficiency levels above the European average in 2000, Italy also improved more consistently in terms of efficient resource use than any other European country between 2000 and 2016 (up 281%, with PPS adjustment).

CIRCULAR BUSINESS
It is within this context that increasing numbers of Italian companies are re-designing their production models to meet a circular format. This means supply chains that truly conform to sustainability that is “Made in Italy”. Last May, just after the European package got the green light, the Circular Economy Network was set up by the Fondazione per lo Sviluppo Sostenibile (Foundation for Sustainable Development) alongside a group of 13 businesses and associations of businesses: some are recycling consortia, others operate in the bioplastics or mineral water industries; there are nappy manufacturers, multi-utility service providers and more. Their objective is to promote the circular economy in Italy, by coming up with policy proposals and helping to spread best practices and innovation throughout the production system. It is chaired by Former Minister of Environment and Protection of Land and Sea, Edo Ronchi.

Some months prior to this, Enel and Banca Intesa collaborated to create the Alleanza per l’economia circolare (Alliance for a Circular Economy). Together with famous Italian brands, manufacturers and services (Novamont, Costa Crociere, Gruppo Salvatore, Ferragamo, Bulgari, Fater and Eataly), they produced their Manifesto for the Circular Economy. The objective of this partnership is to provide companies - especially SMEs proposing innovative and sustainable business plans - with a selection of technological tools, systems, networks and financing to assist their development and boost their competitiveness on the market. Enel itself has revolutionised its own business model in the last few years. As Carlo Tamburi, Enel’s Head of Country for Italy, puts it, “The circular driving forces behind our 2018/2020 industrial plan are renewables, smart grids, digitalisation, electrical mobility, relationships with clients and decarbonisation.”

Eleonora Rizzuto, Bulgari’s Director of Sustainable Development, is responsible for promoting a third and final entity. She is the woman behind AISEC (Associazione Italiana per lo Sviluppo dell’Economia Circolare, or the Italian Association for Developing a Circular Economy). It is a non-profit association set up in 2014 and today it has 45 members, including renowned names like catering company Autogrill, the Intesa Sanpaolo Bank and luxury goods retailer Ferragamo. “The approach we adopt is not so much advocacy. Primarily we try to guide businesses and public authorities through processes that will allow them to operate a circular economy.” As such, AISEC has an original approach: “We see taking circular action as a social initiative. We go out and interact in local areas with the aim of helping them achieve regeneration and social rehabilitation. We place a particular focus on unemployment and disabilities. The environment is just one side of the coin: the other, is social recovery.”


The cover photo features a “Share” chain shop in Via Padova, Milan. Share specialises in second-hand clothing.

Graphics and tables: taken from “Economia circolare in Italia” (Circular economy in Italy), by Duccio Bianchi, published by Edizioni Ambiente 2018.

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