How the Netherlands built a thriving circular economy

The Netherlands is pulling even further ahead of its peers in the shift to a recycling-driven circular economy, new data shows.

According to the European Commission’s statistics office, 27.5% of the material resources used in the country come from recycled waste.

For context, Belgium is a distant second, with a “circularity rate” of 22.2%, while the EU average is 11.5% – a mere 0.8 percentage point increase from 2010.

“We are a frontrunner, but we have a very long way to go still, and we’re fully aware of that,” Martijn Tak, a policy advisor in the Dutch ministry of infrastructure and water management, tells The Progress Playbook. 

The Netherlands aims to halve the use of primary abiotic raw materials by 2030 and run the economy entirely on recycled materials by 2050. Amsterdam, a pioneer of the “doughnut economics” concept, is behind much of the progress.

Why it matters: The world produces some 2 billion tonnes of municipal solid waste each year, and this could rise to 3.4 billion tonnes annually by 2050, according to the World Bank.

Landfills are already a major contributor to planet-heating greenhouse gases, and discarded trash takes a heavy toll on both biodiversity and human health.

“A circular economy is not the goal itself,” Tak says. “It’s a solution for societal issues like climate change, biodiversity loss, environmental pollution, and resource-security for the country.”

A fresh approach: While the Netherlands initially focused primarily on waste management, “we realised years ago that’s not good enough for a circular economy.”

In 2017, the state signed a “raw materials agreement” with municipalities, manufacturers, trade unions and environmental organisations to collaborate more closely on circular economy projects.

It followed that up with a national implementation programme, and in early 2023, published a roadmap to 2030, which includes specific targets for product groups like furniture and textiles. An English version was produced so that policymakers in other markets could learn from the Netherlands’ experiences, Tak says.

The programme is focused on reducing the volume of materials used throughout the economy partly by enhancing efficiencies, substituting raw materials for bio-based and recycled ones, extending the lifetimes of products wherever possible, and recycling.

It also aims to factor environmental damage into product prices, require a certain percentage of second-hand materials in the manufacturing process, and promote design methods that extend the lifetimes of products by making them easier to repair.

There’s also an element of subsidisation, including funding for “circular craft centres and repair cafés”.

This idea is already in play. In Amsterdam, a repair centre run by refugees, and backed by the city and outdoor clothing brand Patagonia, is helping big brands breathe new life into old clothes.

Meanwhile, government ministries aim to aid progress by prioritising the procurement of recycled or recyclable electrical equipment and construction materials, for instance.

State support is critical to levelling the playing field, analysts say.

“The negative externalities of raw material extraction and processing, such as damage to nature and the environment, and climate change, are not yet sufficiently reflected in the prices of linear products and services,” Edse Dantuma, an economist at Dutch bank ING, said in a research note.

“As long as this is the case, a more circular product will often be a relatively expensive option.”

Long road ahead: Next up on the state’s to-do list, according to Tak, is to refine intermediate goals.

For example, if the focus on reducing waste is centred around slashing the overall weight of raw materials used in the economy, rather than the damage they cause, that’d require steep cuts in the use of sand, which is far less destructive than petroleum inputs.

The government also wants manufacturers – including clothing and beverages companies – to take full responsibility for products discarded by consumers.

“Producer responsibility for textiles is already in place, but it’s work in progress to fully implement it,” Tak says.

And the household waste collection process remains a challenge considering that small city apartments aren’t conducive to having multiple bins, and sparsely populated rural areas are tougher to service.

“Getting the collection system right is a challenge, but again, it’s work in progress.”

Yes, but: In global terms, the Netherlands’ contribution to the waste problem is relatively insignificant.

Nevertheless, Tak says wealthy countries should be leading the way towards a fully circular economy as they’re historically the biggest consumers of natural resources.