Circular Economy and Cities

“ C I R C U L A R E C O N O M Y ” A N D C I T I E S .

YAKUB MUHAMMED IBIWOYE Administrator/ Team Leader OLEKSII YURCHENKO - Researcher

CIRCULAR ECONOMY AND CITIES.

MAKSIM KOSMATENKO Data/Informatio n Analyst

Table of Contents 1

Introduction

20.

A video about Waste Management and Circular Economy Sector

2.

A Mind Map for Circular Economy and Cities

21.

Waste Recycling & Circularity

3.

List of Key Words

22.

A video about Waste to Chemicals, Nigeria Repurposing plastic waste

4

Towards the Circular Economy and Cities

23.

Business Opportunities

5.

Scope

24.

Financing Options and Funds

6.

A video about the Circular Economy

25.

The Role of Banks

7.

Platform for Accelerating the Circular Economy (PACE)

26.

International finance & institutions

8.

Industries Adopting a Circular Economy

27.

Bilateral and Multilateral Cooperation initiatives

9.

Textile Industry (Attached with a video)

28.

Bilateral and Multilateral initiatives

10.

Construction Industry (Attached with a video)

29.

Reports

11.

Automotive Industry (Attached with a video)

12.

Logistics Industry (Attached with a video)

13.

Agricultural Industry (Attached with a video)

14.

Oil and Gas Industry (Attached with a video)

15.

Strategic Management and the Circular Economy

16.

Nigeria

17.

Nigeria’s Circular Economy Waste Programme Companies

18.

Waste Value Chain

19.

Waste Collection

1.

Introduction

INTRODUCTION TO THE HISTORY

KENNETH E. BOULDING WROTE THE BOOK ABOUT “CIRCULAR ECONOMY” WHO EXPLAINS THAT WE SHOULD BE IN A "CYCLICAL" SYSTEM OF PRODUCTION. FOR ITS PART, THE TERM "CIRCULAR ECONOMY" APPEARED FOR THE FIRST TIME IN 1988 IN "THE ECONOMICS OF NATURAL RESOURCES". THIS NOTION WAS DEVELOPED FURTHER, FOLLOWING 3 MAJOR EVENTS: THE EXPLOSION OF RAW MATERIAL PRICES BETWEEN 2000 AND 2010, THE CHINESE EMBARGO ON RARE EARTH MATERIALS AND THE ARRIVAL OF THE ECONOMIC CRISIS. TODAY, THE CLIMATE EMERGENCY AND ENVIRONMENTAL CHALLENGES HAVE STRONGLY INFLUENCED AND PUSHED COMPANIES AND INDIVIDUALS TO RETHINK THEIR CONSUMPTION AND PRODUCTION PATTERNS. ONE OF THE ANSWERS TO THESE CHALLENGES IS PRESENTED BY THE CIRCULAR ECONOMY MODEL. THUS, NEW MODES OF PRODUCTION AND CONSUMPTION ARE EMERGING WITH THE MAIN OBJECTIVE OF GENERATING BILLIONS OF DOLLARS WHILE CONTROLLING AND REDUCING ENVIRONMENTAL CONSEQUENCES. IT HAS BEEN ARGUED THAT, IF WE FAIL TO ACT AND CHANGE THE LINEAR ECONOMY TO A CIRCULAR ECONOMY, THE VOLUME OF PLASTIC ON THE MARKET IS EXPECTED TO DOUBLE, THE ANNUAL VOLUME OF PLASTIC ENTERING THE OCEAN WILL ALMOST TRIPLE, AND OCEAN PLASTIC STOCKS WILL QUADRUPLE. IN 15 YEARS, CLOTHING PRODUCTION HAS DOUBLED, BUT USAGE HAS DROPPED BY 40%, AND LESS THAN 1% CLOTHING IS TURNED INTO NEW CLOTHING AT END OF ITS USE. THE ECONOMIC, HEALTH AND ENVIRONMENTAL BENEFITS OF A CIRCULAR ECONOMY FOR FOOD ALONE WOULD BE WORTH USD 2.7 TRILLION A YEAR BY 2050.

2.

3.

List of Key words:

1.

Circular Economy

2.

Linear Economy

3.

Recycling

4.

Strategic Management

5.

Bilateral and multilateral cooperation initiatives

6.

Waste Management

7.

International finance & institutions

8.

Textile Industry

9.

Construction Industry

10. Automotive Industry 11. Logistic Industry 12. Agricultural Industry 13. Oil and Gas Industry 14. Sustainability 15. Sustainable development

4.

Towards the Circular Economy and Cities

CIRCULAR ECONOMY AND CITIES A circular economy (also referred to as "circularity") is an economic system that tackles global challenges like climate change, biodiversity loss, waste, and pollution.

“A circular economy is a mode of economic development that aims to protect the environment and prevent pollution, thereby facilitating sustainable economic development.”

"Circular economy is the outcome of over a decade's efforts to practice sustainable development by the international communities, and is the detailed approach towards sustainable development.”

Most linear economy businesses take a natural resource and turn it into a product which is ultimately destined to become waste because of the way it has been designed and made. This process is often summarized by "take, make, and waste". By contrast, a circular economy employs reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a closed-loop system, minimizing the use of resource inputs and the creation of waste, pollution and carbon emissions. The circular economy aims to keep products, materials, equipment and infrastructure in use for longer, thus improving the productivity of these resources. Waste materials and energy should become input for other processes through waste valorisation: either as a component or recovered resource for another industrial process or as regenerative resources for nature (e.g., compost). This regenerative approach is in contrast to the traditional linear economy, which has a "take, make, dispose" model of production.

It has been argued that, if we fail to act and change the linear economy to a circular economy, the volume of plastic on the market is expected to double, the annual volume of plastic entering the ocean will almost triple, and ocean plastic stocks will quadruple. In 15 years, clothing production has doubled, but usage has dropped by 40%, and less than 1% clothing is turned into new clothing at end of its use. The economic, health and environmental benefits of a circular economy for food alone would be worth

5.

The circular economy includes products, infrastructure, equipment and services, and applies to every industry sector. It includes 'technical' resources (metals, minerals, fossil resources) and 'biological' resources (food, fibres, timber, etc.).

Most schools of thought advocate a shift from fossil fuels to the use of renewable energy, and emphasize the role of diversity as a characteristic of resilient and sustainable systems.

Scope: The circular economy can cover a broad scope.

Researchers have focused on different areas such as industrial applications with both product-oriented, natural resources and services, practice and policies to better understand the limitations that the C.E currently faces, strategic management for details of the circular economy and different outcomes such as potential re-use applications and waste management.

One study points out how modularization could become a cornerstone to enable circular economy and enhance the sustainability of energy infrastructure.

One example of a circular economy model is the implementation of renting models in traditional ownership areas (e.g. electronics, clothes, furniture, and transportation). Through renting the same product to several clients, manufacturers can increase revenues per unit, thus decreasing the need to produce more to increase revenues. Recycling initiatives

6.

*The Circular Economy*

7.

Platform for Accelerating the Circular Economy (PACE):

PACE is a coalition of CEOs and Ministers—including the leaders of global corporations like IKEA, Coca-Cola, Alphabet Inc., and DSM (company), governmental partners and development institutions from Denmark, The Netherlands, Finland, Rwanda, UAE, China, and beyond.

Initiatives currently managed under PACE include the Capital Equipment Coalition with Philips and numerous other partners and the Global Battery Alliance with over 70 partners. In January 2019, PACE released a report entitled "A New Circular Vision for Electronics: Time for a Global Reboot" (in support of the United Nations E-waste In 2018, the World Economic Forum, World Resources Institute, Philips, Ellen MacArthurCoalition).

The coalition is hosted by a Foundation, United Nations Environment Programme, and over 40 other partners launched the Platform for Accelerating the Circular Economy (PACE). PACE follows on the legacy of WEF's CEO-led initiative, Project Mainstream, which sought to scale up circular economy innovations. PACE's original intent has three focal areas:

(1) Developing models of blended finance for circular economy projects, especially in developing and emerging economies (2) Creating policy frameworks to address specific barriers to advancing the circular economy (3) Promoting public–private partnership for these purposes.

In 2020, PACE released a report with partner Circle Economy claiming that the world is 8.6% circular, claiming all countries are "developing countries" given the unsustainable levels of consumption in countries with higher levels of human development.

Secretariat headed by David B. McGinty, former leader of the Human Development Innovation Fund and Palladium International, and Board Member of Board Source. Board Members include Inger Andersen, Frans van Houten, Ellen MacArthur, Lisa P. Jackson, and Stientje van Veldhoven.

8.

INDUSTRIES ADOPTING A CIRCULAR ECONOMY

INDUSTRIES ADOPTING A CIRCULAR ECONOMY:

9. *Textile Industry:

*TEXTILE INDUSTRY* A circular economy within the textiles industry refers to the practice of clothes and fibers continually being recycled, to re-enter the economy as much as possible

"Chinese perspective on the circular economy is broad, incorporating pollution and other issues alongside waste and resource concerns, [while] Europe's conception of the circular economy has a narrower environmental scope, focusing on waste and

It is argued that by following a circular economy, the textile industry can be transformed into a sustainable business. A 2017 report, "A New Textiles Economy", stated the four key ambitions needed to establish a circular economy: “Phasing out substances of concern and microfiber release; transforming the way clothes are designed, sold and used to break free from their increasingly disposable nature; radically improving recycling by transforming clothing design, collection, and reprocessing; and making effective use of resources and moving to renewable input."

While it may sound like a simple task, only a handful of designers in the fashion industry have taken charge, including Patagonia, Eileen Fisher, and Stella McCartney. An example of a circular economy within

10. *Construction Industry: Construction is very important to the economy of the European Union and its state members. It provides 18 million direct jobs and contributes to about 9% of the E.U's GDP. The main causes of the construction's environmental impact are found in the consumption of nonrenewable resources and the generation of contaminant residues, both of which are increasing at an accelerating pace.

*CONSTRUCTION INDUSTRY* The construction sector is one of the world's largest waste generators.

The circular economy appears as a helpful solution to diminish the environmental impact of

End-of-life buildings can be deconstructed, hereby creating new construction elements that can be used for creating new buildings and freeing up space for new development.

Modular construction systems can be useful to create new buildings in the future, and have the advantage of allowing easier deconstruction and reuse of the components afterwards (end-of-life

11.

*Automotive Industry:

The circular economy is beginning to catch on inside the automotive industry. There are also incentives for carmakers to do so as a 2016 report by Accenture stated that the circular economy could redefine competitiveness in the automotive sector in terms of price, quality, and convenience and could double revenue by 2030 and lower the cost base by up to fourteen percent. So far, it has typically translated itself into using parts made from recycled materials, remanufacturing of car parts and looking at the design of new cars. With the vehicle recycling industry (in the E.U) only *AUTOMOTIVE INDUSTRY* being able to recycle just 75% of the vehicle, meaning 25% isn't In the E.U's ETN-Demeter project (European Training Network for the recycled and may even end up in Design and Recycling of Rare-Earth Permanent Magnet Motors and landfills, there is much to improve Generators in Hybrid and Full Electric Vehicles) they are looking at the Some car here.

In the electric vehicle manufacturers such as Volvo are also sustainable design issue. They are for example making designs of disassembly robots are from looking industry, at alternative ownership models (leasing electric motors of which the magnets can be easily removed for used to company; help disassemble the vehicle. the automotive "Care by Volvo"). recycling the rare earth metals.

12.

*Logistics Industry:

*LOGISTICS INDUSTRY* The logistics industry plays an important role in the Dutch economy because the Netherlands is located in a specific area where the transit of commodities takes place on a daily basis. The Netherlands is an example of a country from the E.U that has increasingly moved towards incorporating a circular economy given the vulnerability of the Dutch economy (as well as other E.U countries) to be highly dependable on raw materials imports from countries such as China, which makes the country susceptible to the unpredictable importation costs for such primary goods.

In addition, logistic companies can enable a connection to a circular economy by providing customers incentives to reduce costs through shipment and route optimization, as well as, offering services such as prepaid shipping labels, smart packaging, and take-back options. The shift from linear flows of packaging to circular flows as encouraged by the circular economy is critical for the sustainable performance and reputation of the packaging industry. The government-wide program for a circular economy is aimed at developing a circular economy in the Netherlands by 2050.

Several statistics have indicated that there will be an increase in freight transport worldwide, which will affect the environmental impacts of the global warming potential causing a challenge to the logistics industry, however, the Dutch council for the Environment and Infrastructure (Dutch acronym: Rli) provided a new framework in which it suggests that the logistics industry can provide other ways to add value to the different activities in the Dutch economy, such as, an exchange of resources (either waste or water flows) for production from the different industries, in addition, to change the transit port concept

13. *Agricultural Industry:

*AGRICULTURAL INDUSTRY* The Netherlands, aiming to have a completely circular economy by 2050, intends a shift to Circular agriculture (kringlooplandbouw) as part of this plan.

This shift plans on having a "sustainable and strong agriculture" by as early as 2030. Changes in the Dutch laws and regulations will be introduced. Some key points in this plant include:

*AGRICULTURAL INDUSTRY*      



Closing the fodder-manure cycle.

Reusing as much waste streams as possible (a team Reststromen will be appointed) Reducing the use of artificial fertilizers in favour of natural manure.

Providing the chance for farms within experimentation areas to deviate from law and regulations.

Implementing uniform methods to measure the soil quality.

Providing the opportunity to agricultural entrepreneurs to sign an agreement with the Staatsbosbeheer ("State forest management") to have it use the lands they lease for natuurinclusieve landbouw ("nature-inclusive management").

Providing initiatives to increase the earnings of farmers.

14.

*Oil and Gas Industry:

The uptake to reuse within the oil and gas industry is very poor, the opportunity to reuse is never more evident, or possible, as when the equipment is being decommissioned. Hundreds of thousands of tons of waste are being brought back onshore to be recycled.

Unfortunately, what this equates to; is equipment, which is perfectly suitable for continued use, being disposed of.

*OIL AND GAS INDUSTRY*

In the next 30–40 years, the oil and gas sector will have to decommission 600 installations in the U.K alone. Over the next decade around 840,000 tons of materials will have to be recovered at an estimated cost of £25 billion. In 2017 North Sea oil and gas decommissioning became a net drain on the public purse. With U.K taxpayers covering 50%–70% of the bill, there is an urgent need to discuss the most economic, social and environmentally beneficial decommissioning solutions for the general public.

Organizations such as Zero Waste Scotland have conducted studies to identify areas with reuse potential, allowing equipment to continue life in other industries, or be redeployed for oil and gas.

15.

Strategic management is the field of management that comes to the rescue allowing companies to carefully evaluate C.Einspired ideas, but also to take a firm apart and investigate if/how/where seeds of circularity can be found or implanted. The book Strategic Management and the Circular Economy defined for the first time a C.E strategic decision-making process, covering the phases of analysis, formulation, and planning. Each phase is supported by frameworks and concepts popular in management consulting – like idea tree, value chain, VRIE, Porter's five forces, PEST, SWOT, strategic clock, or the internationalization matrix – all adapted through a C.E lens, hence revealing new sets of questions and considerations. Although yet to be verified, it is argued that all standard tools for strategic management can and should be calibrated and applied to a C.E.

The Circular Economy does not aim at changing the profit maximization paradigm of businesses. Rather, it suggests an alternative way of thinking how to attain a sustained competitive advantage (SCA), while concurrently addressing the environmental and socio-economic concerns of the 21st century. Indeed, stepping away from linear forms of production most often leads to the development of new core competencies along the value chain and ultimately superior performance that cuts costs, improves efficiency, meets advanced government regulations and the expectations of green consumers. But despite the multiple examples of companies successfully embracing circular solutions across industries, and notwithstanding the wealth of opportunities that exist when a firm has clarity over what circular actions fit its unique profile and goals, Circular Economy decisionmaking remains a highly complex exercise with no one-size-fits-all solution. The intricacy and fuzziness of the topic is still felt by most companies (especially SMEs), which perceive circular strategies as something not applicable to them or too costly and risky to implement.

This concern is today confirmed by the results of ongoing monitoring studies like the Circular Readiness Assessment.

STRATEGIC MANAGEMENT AND THE CIRCULAR ECONOMY

16.

NIGERIA

Nigeria Waste Management and Circular Economy Sector: Nigeria is one of the fastest growing countries in the world and the largest economy in Africa, with a large population of about 200 million people. The Dutch government has identified it as a key focus in its Africa strategy not only because of its size, but also the opportunities for bilateral cooperation and Dutch businesses. The Netherlands is a global frontrunner in waste management and circular economy. It is an important and strategic theme for Dutch involvement in Nigeria as it offers both business opportunities for Dutch companies and opportunities for private sector development in Nigeria.

Lagos state was identified as the focus for Dutch participation in the circular economy.

With an estimated 22 million inhabitants, Lagos is like a country. When it comes to the quality of its waste management services, it is recognized as the front runner in Nigeria.

No doubt, with an estimated waste output of 16,500 tons per day, it is the #1 in terms of quantity as well. However, while working on this report, we agreed to expand the area to include Ogun State as well: Ogun and Lagos collaborate in waste collection and recycling, and many large players (both manufacturers and recycling companies) are based just over the state border in Ogun.

Circularity will success when there are companies along the various parts of a value chain that will work to reduce output and re-use whatever is still produced. Nigeria houses many large producers, especially in Lagos and Ogun, that can and should play an important role in circularity. They are supported by collection and recycling companies.

Often ‘home grown’, these companies are increasing in capacity thanks to the support of knowledge institutions, catalysts and of course by receiving the necessary funding to scale. A circular economy does not happen spontaneously but relies on policies that support experimentation and innovation. Fortunately, the Nigerian public sector is becoming more committed to the development of a circular economy. For example, an Extended Producer Responsibility Programme has been established in Nigeria and the country was among the first to join the African Circular Economy Alliance. On state level, LAWMA and OGWAMA are actively pushing for a collaborative effort to create circularity and they facilitate company alliances where possible. Both agencies are very receptive to the idea of Dutch participation in the Nigerian circular economy.

17.

NIGERIA’S CIRCUL AR ECONOMY WASTE PROGRAMME COMPANIES:

18.

*WASTE VALUE CHAIN:

*Waste Collection: The collection phase of scrap metal in Nigeria is mostly informal. Scavengers visit landfills and dumpsites to gather and select reusable metal parts including beverage cans. Young men and women search through the waste for scrap materials they can sell moving from one location to another in the city. This is done very efficiently and effectively; it is very rare to see any cans that litter the street. About 50 years ago, a truck with 400 bags of metals weighing 25kg sold for N11,000 to N12,000. Prices have since grown exponentially.

Scrap metal is often sold for at least N800 per kg. A full truck of copper is worth about N20 million and a full truck of aluminium is worth about N5 million.

This confirms that a main requirement for effective collection is the provision of (monetary) incentives for scavengers and waste collection companies.

19. *Waste Collection:

Waste collection is done on different levels: scavengers, landfills, home collection, street cleaners, and at corporate entities. Informal workers commonly referred to as scavengers carry out plastic waste collection across the city from dumpsites, streets, drainages, roads and sell it to bigger collectors such as Chanja Datti, Recycle point, Scrapays, Wecyclers and others in exchange for cash, groceries, household items amongst other needed items.

Waste collection companies also pick up in their respective LAWMA designated areas from homes, street cleaners and business establishments. On average 80 tons of waste per month is collected. The collected recyclables are further managed at collection and sorting centres owned by the waste collection companies and thereafter the waste materials are sold to manufacturing/recycling plants for further processing.

Waste Recycling: Plastic comes in various forms and types, each with its own composition and characteristics. There are more than 100 types of plastic but in Lagos and Ogun municipal solid waste composition only six are generally found and collected: Polyethylene Terephthalate (PET), High Density Polyethylene (HDPE), Low Density Polyethylene (LDPE), Polyvinyl Chloride (PVC), Polypropylene (PP) and Polystyrene (PS). Nigeria is the third-largest importer of plastics in primary forms (virgin resins) in Africa with 70 per cent of resins currently being imported. Recently, the Standards Organisation of Nigeria (SON) and stakeholders in the food and beverage industry developed a standard that would save Nigeria foreign exchange used in the importation of plastics. The new standards would improve production processes of plastics, ensure the use of rPET in production, ensure safety and the quality of products. The new regulation has galvanized great interest and opportunity in the PET industry in Nigeria whose daily production is estimated to be with over 500 million PET bottles. A lot of players are ready to embrace this cost effective and environmentally friendly rPET circularity. PET is recycled into chips, granules, flakes, and pellets by companies such as Alkem Nigeria, Chanja Datti, Chidire Industries, Kaltani, Richbol, Ugogreen Solutions, United Cyclers and then sold on to companies such as Engee PET and Indorama who process it into PET resins. The PET resins are then sold to companies in industries such as FMCG, food & beverage, pharmaceutical, etc. HDPE, LDPE and PP are recycled into granules, flakes, pellets, and preforms regrind by companies such as Alkem Nigeria, Chidire Industries, Omnik Limited, Richbol, amongst others. Chidere Industries and Omnik Limited use the recycled materials to further manufacture various products such as Fast Moving Consumer Goods bottles & packages, agricultural films, construction films, pure water films, shrink film packaging, plastic household utensils, pharmaceuticals bottles & packages, bags and so on. Recycled materials (granules, flakes, pellets, preforms regrind and resins) are sold to other manufacturers in other industries like FMCG, pharmaceutical, food & beverage to make similar products of their items. At the moment, most companies such as Engee PET import majority of their plastic raw materials from Asia, which shows a clear case for more recycling of PET, HDPE, LDPE and PP within Nigeria.

21.

20.

Waste Management and Circular Economy Sector

* Waste Management and Circular Economy Sector*

*Waste Recycling & Circularity: Nigeria has abundant deposits of iron ore, coal, and limestone amongst other basic material for the production of steel. Notwithstanding, the Nigerian steel sector collapsed several years back. Since then, the Nigerian steel industry is sustained mostly though the recycling of scrap metals collected from waste landfills. In many of the rolling mills, 100% scrap metal is recycled for the production of iron bars used for civil construction and the recycling results in the generation of low and high carbon steel respectively.

Nigerian Foundries is one of the dominant players in this area.

Smaller recycling plants do exist as well as they are relatively affordable. Data collated from secondary research indicate that the minimum start-up capital for a medium scale metal recycling plant is around N5 million (USD 12,000) while the return on investment is about 60%. The scrap metals and beverage cans are formed into ingots and shipped where they are processed with heavy machines and technologies before some are exported out of the country to mainly China, India and Turkey. Other ingots are used in the construction and engineering sectors for various projects and in the manufacturing sector for different products. Chinese Hong Xing Steel Company Limited recently invested about $ 100 million to establish two manufacturing plants in Lagos which will make use of metal scraps during production.

22.

*WASTE TO CHEMICALS, NIGERIA REPURPOSING PLASTIC WASTE Business Opportunities

*Waste to Chemicals, Nigeria Repurposing plastic waste*

There are many avenues for Dutch companies to become involved in Nigeria’s circular economy. Many stakeholders identified the need for building capacity, knowledge and awareness, but there are also opportunities for export of technology and/or for investment. Plastic, e-waste and biowaste may be the most interesting for Dutch companies not just because of the size of the problem, but also the presence of large (international) companies who can be an ‘anchor’ to Dutch involvement as either supplier of waste or buyer of recycled projects. For this reason, the opportunity re-mattress recycling may be more straightforward than other opportunities missing such an anchor. While most stakeholders interviewed said they would want Dutch companies to invest, we believe many of the opportunities described below can be harnessed by a collaboration of a Dutch company, local C.E company, an ‘anchor’ as well as an (international) finance partner. There are also opportunities to purchase waste from Nigeria and recycle it in the Netherlands. However, such trade would increase the use of fossil fuels. Therefore, the most circular business opportunities are those where the recycled product will be re-used in Nigeria.

23.

Business Opportunities

Compression Technology:

Wood Chip Recycling:

Plastic collection will be ramped up at the point of generation. For example, the LAWMA Blue Box initiative, in collaboration with recycling companies, will involve blue collection boxes at households to Plastic collection will be ramped up at the point of generation. For example, the LAWMA Blue Box initiative, in collaboration with recycling companies, will involve blue collection boxes at households to ensure waste is segregated and collected separately. LAWMA intends to add 15 more hubs to their existing 5 community recycling centres. Moreover, companies such as Chanja Datti, RecyclePoints, and Wecyclers are actively looking to create plastic waste collection hubs. However, transporting plastic to recycling facilities from these hubs is expensive due to its ‘empty volume’.

The saw-mills in Ebute Metta – Lagos State, contribute up to 85% of the wood used by furniture factories in Lagos and the surrounding states.

The city of Lagos generated about 300 thousand tons/year of wood waste. However, the burning and improper disposal of the sawmill waste such as saw dust, wood chips and shavings cause serious water and air contamination which has consequential health effect on residents. The Lagos state government has started tinkering with plans for a new set of policies to check the activities of sawmill operators, specifically, with regards to the disposal and indiscriminate burning of sawdust and wood chips across the state. Lagos State Environmental Protection Agency (LASEPA) has begun taking an inventory of all sawmills in the state, following which an enlightenment programme to school sawmill operators on proper methods for disposal of sawdust and wood shavings is expected to take-off.

Opportunity: There are many players who collect and recycle, but there is scope for large players to ramp up production, as well as need for better technology to ensure all rPET flakes are suitable for the food & beverage industry. A Dutch consortium of companies can partner with the waste collection companies and then recycle PET at a large scale in flakes and pellets.

Abattoir & Organic Waste to Energy & Fertilizer: The agro-industry generates huge amounts of organic waste. Nigeria has only a very few ranches, most cows are kept by nomadic Fulani herdsmen. To obtain cow waste, one has to work with the abattoirs. These abattoirs generate tons of punch manure (rumen content) but very little cow manure, making biogas generation from this source a bit more technical and costly. Punch manure has to be pre-processed before it can be sent to an anaerobic digester. Successful projects include a collaboration of Lagos State government, Friends of the Environment (FOTE), HIS Biogas and Togata Renewable Technologies. It is currently being used to power the Ikorodu Mini Abattoir at Ebute road, Ikorodu, Lagos State for close six hours every day, and also produces fertilizer.

Opportunity: Togata intends to build, own and operate biogas plant from food waste co-digested with animal manures. Dutch companies can partner with the Lagos state government in collaboration with Togota to construct more biogas plants in Lagos. We understand IFAD funds projects like this.

Opportunity: Presently, wood chips are hardly being recycled in the formal economy. There is an opportunity to set up a wood recycling company, partner with LASEPA for the steady supply of the raw material, and compress the wood chips and shavings into building materials or furniture, or partner with existing players to scale production.

24.

FINANCING OPTIONS AND FUNDS Nigerian government funding:

The government in Nigeria hardly supports companies via funding. However, it tries to make up for this shortcoming in the area of policy creation to enable the smooth operations and growth. Lagos and Ogun both have very active waste management authorities which are also keen to collaborate with international companies. In October 2020, the Federal Executive Council approved the national policy on plastic waste which focuses on the reuse of plastic waste generated in the country, and in doing so ensures a truly circular economy in the country. The law is expected to boost the level of involvement of financial institutions that already support recycling projects in the country and attract foreign investments as well. The Bank of Industry, a Nigerian government entity, has also shown an interest in funding circular economy projects though its terms would be close to that of a commercial bank. They are currently managing a solar fund and are looking at ways to become involved in (large) recycling projects as well. The BOI provides access to funds for start-ups, SMEs, and large enterprises such as Shongai Packaging Plastics Industries Limited and the Shongai Recycling Plant, both located in Sango-Otta, Ogun State.

25.

The Role of Banks:

Circular economy projects are capital intensive, but commercial bank funding is often not available for smaller companies due to their lack of collateral. Moreover, it can be a very expensive option as interest rates are usually in the double-digit region, even above 20%.

Sustainability initiatives financed by banks and implemented with C.E companies are a more important contribution. Some are beginning to embrace the sustainability mind-set and are working towards gains that are not necessarily monetary. Some initiatives are highlighted below: Access Bank Plc: Access bank strives to continuously commit to efficient waste management approaches such as partnering with Recycle point and Parallel point for attain the goal of zero waste-to-landfill.

First City Monument Bank (FCMB): FCMB partnered with Mitimeh on the transformation of water hyacinths into valuable material. It also partners and funds other environmentally friendly organizations through its waste to wealth initiative.

Guaranty Trust Bank: Guaranty Trust Banks runs the Waste2Style Initiative such as Recycling waste to play with PP40 Ibadan.

Heritage Bank Plc: Heritage bank is currently the official bank for all recyclers in Lagos state for the next two years and will focus all of their Corporate Social Responsibility programs on the state.

Jaiz Bank: in partnership with Chanja Datti, United Nations Development Programme (UNDP), and Abuja Environmental Protection Board (AEPB) Jaiz Bank has commenced the green account. This is an initiative to promote culture of waste recycling in Nigeria. Individuals who submit waste, frequently receive cash, after accumulating sufficient point in the green account which will be domiciled in the bank.

Stanbic IBTC Plc: Stanbic IBTC currently drives paper reduction initiatives, Paper waste recycling and Go Green Branch Initiative in partnership with waste recycling companies.

Sterling Bank: Sterling Bank is very active in environmental sustainability initiatives such as partnerships with Lagos State Waste Management Agency (LAWMA) and Wecyclers for effective waste disposal and carbon reduction.

26.

International finance & institutions:

There is an increasing number of international institutions looking at Nigeria’s circular economy, funding projects to boost the value chain. Below are entities that are currently active in this space and could be approached for upcoming projects also. There will be others who could be interested to co-finance a Dutch project, for example FMO, which has financed projects in Nigeria but not yet in circular economy.

African Development Bank (AfDB): The African Development Bank (AfDB) finances projects in waste and wastewater in African countries including Nigeria.

Global Environment Facility (GEF): The Global Environment Facility has co-financed over 5000 projects globally in the areas hazardous waste, municipal solid waste, organic waste, waste agricultural biomass and wastewater. In Nigeria, GEF has financed major waste management and C.E projects which include the Circular Economy approaches for the electronics sector and Environmentally Sound Management and Disposal of PCBs each with a cost of approximately USD 15 million and USD 49 million respectively.

World Bank: The World Bank Group has carried out projects in in the areas hazardous waste, municipal solid waste, waste plastics in Africa. Some of these projects include the Lagos Landfill Gas & Composting (USD 2.13 million), Earth Care Solid Waste Composting Project (USD 7.13 million), Oyo State Urban Composting Project (USD 50 million) and Lagos Drainage and Sanitation Project (USD 63 million). Also under the World Bank group:

Green Climate Fund (GCF): The Green Climate Fund (GCF) to date has carried out 9 projects with total financing of USD 173.1 million for mitigation and adaptation projects in the area of International Finance Corporation (IFC): The IFC has sponsored the largegreenhouse gas emissions and enhance their ability to respond to climate change in Nigeria. scale waste management and circular economy projects in Nigeria such as Joint Initiative on Circular Economy (JICE): The Joint Initiative on Circular Economy (JICE) is a the construction of a Continuous Polymerization (“CP”) plant costing about USD 24 million to be sited in Ogun State, Nigeria, with a nameplate capacity partnership between the European Union’s largest national promotional banks and of 150,000 metric tons per annuum (mtpa) as backward integration to an institutions and the European Investment Bank to invest at least €10 billion in the circular existing Solid State Polymerization plant amongst other projects. economy by 2023.

United Nations Environment Programme (UNEP): The UNEP in collaboration with the Federal government, the Global Environment Facility and the U.N announced a USD 2 million investment to kick off the formal e-waste recycling industry in Nigeria to address the e-waste challenge and grasp the opportunity of the circular economy. The new investment is expected to leverage over USD 13 million in additional co-financing from the private sector.

MIGA Multilateral Investment Guarantee Agency (MIGA): MIGA has funded several sustainability projects in Nigeria such as the constructing of a float glass and on-line solar control glass production line with a capacity of 500tpd worth USD 70 million by China Glass Holdings Limited (CGHL).

27.

Bilateral and Multilateral Cooperation initiatives

BILATERAL TRADE IN WASTE: There is increasing recognition that non-hazardous waste could be traded for further processing and recovery under proper controls in Nigeria. The country is now involved in waste trade, which provides potential opportunities to direct waste to countries with a comparative advantage in sorting and processing activities that can boost global recycling rates. However, one cannot ignore that Nigeria is becoming a dumpsite for e-waste from Europe, America, and Asia. An estimated 500 containers, each carrying about 500,000 used computers and other electronic equipment, enter the country’s ports every month from the United States, Europe, and Asia. According to the U.N Comtrade, Nigeria exported $5.5 million (Euro 4.67 million) worth of scrap metal to the Netherlands, India, Spain, and the United Kingdom in 2019.

According to their data, The Netherlands and India account for 96% of trade in scrap metal sourced from Nigeria. Trade in secondary raw materials constitutes an essential element of the trade and circular economy interface for Nigeria. In Nigeria, at the moment, there is currently no comprehensive data on second-hand goods. One potential issue identified is the difficulty in distinguishing trade in second-hand products from exported products for recycling and recovery.

28. Bilateral and Multilateral initiatives There are an increasing number of initiatives. The ones mentioned below are among the most prominent at the moment.

African Circular Economy Alliance (ACEA): ACEA is a government-led coalition of African nations and global partners created in 2017, committed to advancing the circular economy transition at the national, regional and continental levels. Together with the African Development Bank and Finnish Innovation Fund Sitra, they organized a virtual event on the circular economy opportunities in Africa’s post COVID-19 recovery which was scheduled to highlight circular economy opportunities to accelerate the transition to a low-carbon and climate-resilient development model that bolsters jobs for youth, green innovations and sustainable development in Africa. The event took place on 30 September 2020.

GIZ Germany: The GIZ through the promotion of pro-poor and environmentally sound recycling strategies launched a project in Nigeria to ensure the informal sector receives greater consideration in the waste management projects of international development cooperation.

LOOP Nigeria: LOOP Nigeria is an active new initiative in helping companies to develop innovative ideas and C.E solutions that promote sustainability in the society while adding value to business and economic growth. LOOP Nigeria is a gateway to Nigeria for Finnish players with circular offering.

Sitra – Finland: SITRA is a Finnish Innovation Fund and organizer of the World Circular Economy Forum which brings together over 4000 business leaders, policymakers and experts to present the world’s best circular economy solutions. The next annual WCEF will be held for the first time in North America in Toronto, Canada on 13-15 September 2021.

Dialogue on Waste Management in Nigeria – AHK: A series of seminars on waste management and climate change financed by the Foreign Climate Policy Fund of the German Ministry of Foreign Affairs and facilitated by the Consulate General of the Federal Republic of Germany in Lagos, the Energy and Environment Desk of the Delegation of German Industry and Commerce in Lagos and the German Embassy Abuja.

United Kingdom: The U.K government’s department for international development (DFID) over the years have implemented programs across nine locations in Northern Nigeria through the Propcom Mai-Kafi initiative. Propcom Mai-Kafi is implementing its funding through Palladium International. The program has invested in an indigenous company, Earth Care Nigeria Limited, to provide affordable organic compost to farmers in the North Eastern region of Nigeria.

European Commission: The European Union intends to implement sustainable development based on balanced economic growth and price stability examples of these initiatives include:

United Nations Development Programme (UNDP): The UNDP is currently funding several projects in Nigeria which includes the Sound Environmental Management and Disposal of PCBs in Nigeria. The project commenced in January 2018 with a budget of USD 1.2 million and is scheduled to end in 2023.

European Union - integrated waste management in Western Africa (IWWA) The E.U-funded IWWA project has provided a blueprint of the practical steps countries and regions in western Africa could take to design and implement integrated waste management systems for local communities. The blueprint includes collection, sorting, recovery, reuse and recycling of valuable materials, and disposal methods. The European Union (E.U) has disclosed that it spent over €260 million to provide access to clean water, sanitation and hygiene facilities to over 10 million Nigerians in 14 states.

EU Circular Economy Action Plan: The E.U Circular Economy Action Plan embodies all the initiatives along the entire life cycle of products, targeting for example their design, promoting circular economy processes, fostering sustainable consumption.

United States: United States supports several initiatives in Nigeria including: *USAID funded water sachet recycling: DOW Midland, Michigan (U.S), has partnered with Omnik, Recycle Points and the Lagos Business School Sustainability Centre to recycle water sachets through a pilot program, designed to show that they can be collected and recycled to be utilized in new, quality packaging applications. *The U.S Consulate General, Lagos, is sponsoring the vocational skill acquisition of 100 graduates to learn the art of designing and making furniture from waste. The implementing partner is Pearl Recycling, Lagos. And of course there are the Dutch initiatives to make sure the Netherlands and Nigeria will collaborate closely to promote the circular economy and enable business from both countries to collaborate.

29.

Reports: Core Set of Circular Economy Policy Documents and Reports: