Circular Economy, A System That Can Realize Sustainable Development

Circular-Economy-A-System-That-Can-Realize-Sustainable-Development Illustration. The Indonesian government continues to encourage the achievement of a circular economy system. This system has the potential to realize sustainable and environmentally friendly development. (Photo by M Agung Rajasa / ANTARA FOTO)

Source: Katadata 
Date: 26 August 2020 

The Indonesian government continues to promote the realization of a circular economy system. This system has the potential to realize sustainable and environmentally friendly development.

Indonesia is in the midst of implementing a circular economy. The government is now encouraging sustainable recycling of plastic waste and the procurement of environmentally friendly goods.

The Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan stated that by 2025 the government targets to reduce 30% plastic waste and handle 70% of other waste through the 3R movement: reduce, reuse, and recycle.

This target was announced considering that plastic waste is quite large in Indonesia. In a big city like Jakarta, it even reaches 8 thousand tons per day. "So you have to take unusual steps. The plastic-based waste management system approach, for example through the refuse-derived fuel (RDF) facility," said Luhut at the launching of the Packaging Recovery Organization (PRO), Tuesday (25/8).

RDF technology allows waste management through the process of homogenizers into small sizes/pellets. This material can then be used as new renewable energy (EBT) and replace coal.

Luhut stated that the program has been implemented in Cilacap, Central Java. The government is targeting the procurement of a similar program in 10 other cities with a waste volume below 200 tons per day.

A large amount of waste cannot be separated from the low community initiative to recycle. The Central Statistics Agency (BPS) noted that only 1.2% of households recycle their waste. As can be seen in the Databoks below:

Therefore, Luhut stated that the program for recycling waste into EBT could only be carried out in collaboration with the government and private sector.

Meanwhile, the Ministry of Environment and Forestry (KLHK) is working on a green procurement policy within the ministry/agency. "So in the future, recycled goods will be labeled and become priority goods used in the government," said the Head of the Sub-Directorate for Goods and Packaging of the Directorate of Waste Management at the Ministry of Environment and Forestry, Ujang Solihin Sidik, Friday (19/6).

From the private side, PT Unilever Indonesia has pushed towards a circular economy. Head of Corporate Affairs and Sustainability Nurdiana Barus stated that one of the ways is by launching a waste bank.

"Since 2008 and until now, we have built 3,858 waste banks throughout Indonesia," said Nurdiana in the webinar SAFE Forum 2020: Scale It Up!, Tuesday (25/8).

Nurdiana stated, until 2019 her company had absorbed 12,487 tons of non-organic waste. Unilever is also working with Google to assist waste bank business people in registering themselves on the Google My Business platform. So, the location of the waste bank is easy to find via Google Maps or the Google search engine.

Furthermore, Unilever has also prepared strategies for less plastic, better plastic, and no plastic. In addition, it also tries to use recycled packaging. For example, Bango soy sauce uses packaging from recycled PET bottles.

"The no plastic strategy is to launch a pilot refill station."

What is the Circular Economy?

Refer to the article entitled The Circular Economy-A New Sustainability Paradigm? written by Geissdoerfer et al., the circular economy is defined as a regenerative system that minimizes resource use, waste, emissions and excess energy by slowing, closing and narrowing the energy and material cycle.

The way to do this is by sustainable resource design, maintenance, repair, reuse, re-production, repairs, and durable recycling. This is different from a linear economy, which uses resources into production goods and ends up as waste or degenerative.

The Ellen McArthur Foundation, one of the foundations that focuses on circular economy issues, formulates these three principles. First, it is designed to eliminate waste and pollution. Second, products and materials can continue to be used. Third, a regenerative natural resource utilization system.

The European Union Parliament on its official website writes that the concept of a circular economy is important to maintain the availability of raw materials for industry amidst the growing human population. Considering the raw materials, especially those available from nature, are limited in number.

Also, the circular economy allows one country not to depend on raw materials for other countries due to low stocks. Likewise, it can help reduce environmental impact because the smart use of raw materials can reduce carbon dioxide emissions.

Economically Beneficial

The circular economy also brings benefits to economic growth. The European Union Parliament noted that through this system European companies saved 600 billion euros, equivalent to 8% of their annual profits. At the same time, they reduce gas emissions by up to 2.4%.

Meanwhile, a McKinsey consultant said the circular economy system has the potential to save raw material costs of up to US$ 340 billion to US$ 380 billion in the European automotive industry. In the fast-moving goods sector, savings from raw material entry costs could be as high as 20% globally. Equivalent to US$ 700 billion or 1.1% of global Gross Domestic Product (GDP).

Several European Union countries have implemented a circular economy. One of them is Sweden, which applies it through the development of plastic waste management. The percentage of recycling in this country has reached 53%.

Denmark is also another European Union country that applies it. The Danish government imposes a tax on companies that dispose of waste. In addition, the government of this country creates a market for waste and used goods and develops data in related fields.

The Danish government's efforts have also received support from private companies. One of them is Lego, which sells its plastic waste so that it can be used for making carpets and plastic-based equipment by other companies. Denmark is expected to recycle up to 50% of its waste by 2022.

Denmark and the United Nations Development Program (UNDP) also collaborated with Bappenas to encourage the realization of a fully circular economy in Indonesia by 2024. This cooperation was established in February 2020.

Bappenas received funding from Denmark of US$ 540 thousand which was channeled through UNDP as a facilitator. The Danish Minister of the Environment, Lea Wermelin, stated that the transition to a circular economy was an important step for sustainable development in Indonesia.

In Asia, only China, India and Japan have successfully implemented a circular economy. In Japan, recycling has reached 98% of iron waste. This success is due to the Japanese government working with local businessmen to run it.

Meanwhile, not a single country in Southeast Asia has implemented a circular economy system. If Indonesia does, it will be the first and can accelerate the achievement of a sustainable economy.

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