Andreea Nicolae (PIVOT-C): Reflections on Romania’s Circular Odyssey (Part 2)

Welcome back to the continuation of our journey through Romania’s circular economy landscape. In Part 1, takeaways from the Circularity in Action workshop that took place in Bucharest, in January 2024, revealed some of the current status quo, the initial steps taken by both the public and private sectors. As we venture into Part 2, we’ll explore about the critical role of public-private partnerships (PPPs), the transformative power of knowledge transfer and the importance of unveiling synergies and interconnections.

By Andreea Nicolae, Co-Founder & Managing Partner at PIVOT-C

Takeaway 4: Public-Private Partnerships (PPPs) Strengthen Circular Economy

Recognizing the crucial role of capacity building, the workshop also explored how PPPs can serve as a powerful tool for facilitating implementation. First and foremost, PPPs are foundational to the very concept of a circular economy, a key way of delivering projects and collaboration between the government and the private sector.

“The public sector must create the space, incentives and legal frameworks necessary for private schemes to function effectively. We’re advocating for a paradigm shift in how we live, conduct business and collaborate,” said Anna Akhalkatsi, World Bank’s General Director in Romania and Hungary.

Echoing this sentiment, Ionut Georgescu from FEPRA Group highlighted the indispensability of PPPs in achieving a circular economy. “Without public-private partnerships, we’re merely spinning our wheels, isolated in our efforts. The good news is that we have a new public-private partnership law to support circular economy initiatives. Let’s leverage this!” he remarked.

Banking representatives showcased the finance system role to mobilize transition funds and finance green projects. “We are adapting by diversifying our financing to support sustainability. Our goal is to reach 25% green loans by 2026. Currently, 60% of our green portfolio supports renewable energy and green buildings, with 10% now dedicated to circular economy projects,” said Ioana Voinescu, Sustainability Director, Banca Comercială Română.

As leading investor in circular economy projects, IFC restated their engagement: “We stand ready to further extend our collaboration with the Government of Romania and the private sector to help identify and work together on potential pilot projects and investment opportunities in the circular economy space, to create best practice examples that would hopefully have spillover effects and get replicated at larger scales throughout the country over the near future,” shared Hester DeCasper, the Regional Head of Operations in Europe, within IFC.

Numerous panel participants engaged in a vibrant discussion on the fact Romania needs to further work on accountability and strategic planning when it comes to public funds as well as grants to support the private sector projects in a way that incentivizes sustainable practices. The transformation needs pointed to new financial mechanisms and means of collaboration between public and private sectors.

Takeaway 5: We Have to Intensify Knowledge Transfer and Experience Sharing

As we explored practical and actionable examples across various industries, the priceless role of know-how transfer and experience sharing emerged.

A notable local example bearing a national footprint of extreme importance is the Return Guarantee System (RGS), recently introduced in Romania by RetuRO SGR, at the end of 2023. Going beyond the implementation complexities such a project implies, it came into the dialogue as a significant learning opportunity for other sectors that will be facing the need to implement Extended Producer Responsibility (EPR) systems, as well. Anca Marinescu, Communication Manager at ReturRO, shared: “RetuRO counts the Romanian state among its shareholders, through the Ministry of Environment. This collaboration has proven successful in formulating effective policies, establishing legislation and rolling out the return-guarantee system at both national and local levels, thereby ensuring its impact right down to the grassroots.”

Talking grassroots, business models transformation occurred often in the discussion, as a must in approaching not only legislative, but also market demands. IKEA stood-up with their remarkable, leading achievements in recovering waste, communicating to customers, measuring and monitoring the progress of circularity. “We have established a recovery department focused on maximizing the reuse and resale of furniture and decorations returned to us by customers,” Raluca Mocanu, Sustainability Leader with IKEA Romania, noted. “In 2023, we managed to recover 80% of the value of products that reached this department, a witness to our efforts to not only measure but actively control our impact on waste generation.”

Eventually, any achievement, big or small, has a unique impact in the dissemination and the implementation of circularity. “It’s worth to disseminate best practices. The challenge we have now is fostering industrial symbiosis, encouraging collaboration among large companies, local businesses, startups and NGOs. This effort is crucial for integrating smaller Romanian companies, which make up the majority, into the circular economy. We’re looking towards models in countries like the Netherlands, France and Sweden, which have shown leadership in certain sectors. It’s about learning from others, partnering where possible and bringing those lessons home to Romania,” concluded Adelina Dabu, Head of Public Affairs, Concordia Confederation.

Takeaway 6. A Modest step Ahead with Circularity in Action: Unveiling Unexpected Synergies and Interconnections

During a break, an entrepreneur from the textile industry approached me to share an epiphany: “I initially attended this event for insights relevant to textiles, yet I was struck by the realization that my new reed harvesting business in the Danube Delta aligns perfectly with the trends we’re discussing here.”

Indeed, the dialogue revealed interconnections between different sectors. Circular economy’s systemic nature was visualized through tangible examples and unexpected synergies between diverse sectors.

One cross-sector call to action came from Aurelian Leonard DANU, Sustainable Development Expert within the Romanian Water Association: “All water operators can provide opportunities for large companies and processors to take in food waste, crucial for biogas production. This approach advances sludge treatment stations for agricultural reuse and supports biogas production and co-generation of electricity and heat. We thus close another loop in our circular economy efforts.”

To confirm on the interconnections, a banker explained the financing perspective going beyond the conventional: “We’ve supported circular projects like recycling used tires into running tracks for parks and stadiums, we are focusing on financing projects for reducing micro-plastics in water. We expect plastic producers to include at least 20% recycled material in their production,” shared Crymhylde Galos, Green Bonds Director from Banca Transilvania.

Kronospan’s Recycling Wood Purchasing Manager Brîndușa Donțu shared a circular point of view from furniture producers: “We’re actively integrating wood construction waste into our processes, aiming for a future where 100% of our product is made from recycled material. We need wood waste from any field – constructions, retail, you name it. We are here to call for partners,” she shared.

In such particular instances, with specialists from the Ministry of Development, Federation of Construction Societies, IKEA, Holcim or Strabag in the room, I was happy to witness the seeds of circularity beginning to sprout!

Conclusions from A Circular Economy “Marathon”

I am a strong believer that Romania’s journey towards a circular economy is a marathon, not a sprint. The Circularity in Action project that I coordinated served as a pit stop.

Three pillars will anchor the bridge between plans and actions:

1. Intensified collaboration: let’s break down silos, share knowledge, spark unexpected connections. (Remember the entrepreneur’s epiphany: the Danube Delta reeds and construction waste, seemingly worlds apart, might be the missing pieces in our circular puzzle.) This is where we have to sprint.

2. Holistic policy frameworks: fragmented initiatives are like runners navigating a maze. We need clear paths, well-defined goals and strategic support. We need policies that stimulate circular practices, streamline implementation and address challenges. This is our marathon.

3. Empowering local communities: grand national plans sound fancy, but it’s individuals and communities who will make the needed change. The call to action here is to empower local authorities, engage entrepreneurs and educate consumers. They are the runners in the marathon journey.

Romania has the potential. Let’s lace up our shoes, find our pace and run this marathon together.

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