The transition towards a circular economy has accelerated in response to increasing environmental challenges and the need for more sustainable and cleaner production. Many countries are mainstreaming a circular economy into their policy agenda. In particular, the European Commission’s new Circular Economy Action Plan, adopted in March 2020, will be a key element of the EU Industrial strategy. In Belarus, similar policy agendas that promote circular economy have not been developed yet, however, this concept is now attracting increasingly more attention. Therefore, it is essential to identify barriers that hamper the implementation of circular economy business practices in the country. This policy brief presents the results of a survey that studied 452 Belarusian companies and their prospects and opportunities of circular transformation both within enterprises and at the national level. The findings show that high levels of capital and technology spending and lack of state-provided economic incentives are the most pressing barriers to circular economy development in Belarus. When it comes to enterprises’ own prospects for circular transformation, lack of funding is ranked as the main impediment.
Barriers to Circular Economy Development in Belarus
Despite the fact that there has been an increased interest in the circular economy, evidence suggests that its implementation has been hampered by a variety of barriers. Based on academic literature and business case studies, these barriers can be categorized into several groups (Rizos, et al., 2015; Rizos, et al., 2016; Kirchherr et al., 2018; Ritzén and Sandström, 2017):
- Cultural barriers (e.g. social, behavioral, and managerial) – a lack of interest, environmental awareness, and/or existing differences in personal values, which hinder the development of a circular economy.
- Information constraints – a lack of consumer and producer awareness about the key principles and best practices of circular economy implementation;
- Inadequate regulatory environment – a lack of consistent legal framework, policy support, and incentives for circular economy transition (e.g., through tax relief, fiscal measures, or public procurement);
- Technological barriers – an absence of a well-managed logistic infrastructure for the collection, extraction, and processing of secondary raw materials (SRM); the lack of standardization and, as a result, lower quality of goods produced from SRM; the absence of knowledge on how circularity can be implemented in a particular industry;
- Economic impediments – barriers to circular economy transition that are due to low prices for primary raw materials and high investment costs for the implementation of circular business models, as well as lack of funding and restricted access to finance.
This categorization served as the basis for the development of our questionnaire. We surveyed enterprises on the prospects and opportunities relating to their own circular transformation as well as factors constraining the more general development of a circular economy in Belarus. The survey was conducted in 2020 by BEROC and IBB Dortmund and included 452 companies from the Belarusian regions of Brest and Mogilev. The results show that businesses view economic, regulatory, and informational barriers as the most hindering to a circular transformation of Belarus. In particular, the respondents stated that the main impediments are high levels of capital and technology spending (62.8% of respondents), as well as lack of state-provided economic incentives (50.4%). Information constraints are also important as enterprises are not aware of circular technologies and believe that they do not exist (50.4%). Furthermore, there is a lack of knowledge on how to implement circularity in their industry (33.8%) (see Figure 1).
Figure 1. Barriers to circular economy development in Belarus, % of respondents
Respondents also identified barriers that hamper a shift of their own enterprise – rather than that of the entire Belarusian economy – from a linear to a circular business model. According to the survey, the lack of funding is considered as the main barrier to circular transformation among Belarusian companies, as 83.5% of respondents characterized its impact as high or medium. This impediment is followed by the absence of circular technologies that can be applied at the surveyed enterprise (64.9%) and the lack of information and best practice examples with regard to the implementation of circular business models (62.4%). Half of the respondents also indicated that the shift from a linear economy is hampered by the lack of consulting on how to implement circularity (see Figure 2).
Figure 2. Barriers to the circular transformation of the Belarusian enterprises, % respondents
Enterprises identified specific technical challenges associated with possible supply chain constraints. In particular, 40% of respondents raised concerns about the absence of an online database on waste and secondary raw materials, and 39.3% of them worried about possible interruptions in the supply of secondary raw materials.
Stimulus for Circular Transformation in Belarus
Respondents also expressed their views on potential stimulus measures that could be implemented to encourage a transition towards a circular economy in Belarus. Tailored support programs (83.9%), tax incentives (78.5%), and development of infrastructure for the processing of secondary raw materials (76.4%) were identified as the strongest motivators for enterprises’ decision to opt for a circular business model. Other important measures listed by the respondents were revisions of the legislative framework to prioritize the use of secondary raw materials, prevent waste generation, etc. (67.4%) as well as access to consulting on how to implement circularity in a business (62.8%) (Figure 3).
Figure 3. Stimulus for the circular economy development in Belarus, % of respondents
Surveyed enterprises stated that they had already incorporated some circular economy elements in their business model. More than 35% of respondents have used recycled materials in the production process, 19% have recycled products in the production of new materials or products, and around 19% have reused products or embedded raw materials. Moreover, more than 35% of enterprises would be ready to introduce reusage and recycling in their business within the next three years. However, they emphasized that existing regulations should be revised, and economic incentives provided in order to encourage these efforts.
The results confirm that Belarus has potential for circular economy development. Yet, its implementation might be hampered by economic, regulatory, informational, and technological barriers. In particular, the surveyed enterprises stated that high upfront costs, e.g., for technology and equipment, as well as the lack of state economic incentives, are the most pressing impediments to the circular transformation of Belarus. At the company level, lack of funding is seen as the main obstacle in shifting from a linear to a circular business model. Another important barrier is lack of information, as enterprises are not aware of circular technologies and best practice examples.
The results of our survey suggest that, in order to encourage a transition towards a circular economy in Belarus, a tailored support program should be developed, existing regulations revised, and economic incentives provided. The transition will not be possible without mainstreaming a circular economy into Belarus’ policy agenda.
- European Commission, 2020. “Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the regions, A New Circular Economy Action Plan for Cleaner and More Competitive Europe”, Brussels, COM/2020/98 final.
- Rizos, Vasileios, et.al., 2015. “The Circular Economy: Barriers and Opportunities for SMEs”,CEPS Working Document, No. 412.
- Kirchherr, Julian, et al., 2018. “Barriers to the Circular Economy: Evidence from the European Union (EU)”, Ecological Economics, V. 150, pp. 264-272.
- Rizos, V. et al., 2016. “Implementation of Circular Economy Business Models by Small and Medium-Sized Enterprises (SMEs): Barriers and Enablers”, Sustainability, No. 8 (11), 1212.
- Ritzén, Sofia; and Gunilla Ölundh, Sandström, 2017. “Barriers to the Circular Economy – integration of perspectives and domains”, Procedia Cirp, No. 64, pp. 7-12.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
This policy brief summarizes the results of our study, Shershunovich and Tochitskaya (2018), on the circular economy development in Belarus. The aim of the work was to measure the circularity of the Belarusian economy using European Commission indicators. The analysis reveals that the circular economy in Belarus is still in the initial stage of its development. In 2016, the employment in circular economy sectors in Belarus accounted for 0.49% of total employment, and the investment amounted to only 0.27% of total gross investment. Belarus is also falling behind many European countries in waste recycling.
The circular economy represents an economic system based on a business model of reduction, reuse, recirculation and extraction of materials in production, distribution and consumption of goods and services (Batova et al., 2018).
Transition to it offers great opportunities to transform the Belarusian economy and make it more sustainable and environmentally friendly, while preserving primary resources, creating new jobs and increasing competitiveness of enterprises.
In order to encourage the transition to a circular economy, it is important to have a proper monitoring system based on reliable and internationally comparable data. It helps to track progress towards a circular economy, conduct policy impact assessment, and analyze whether measures being taken are sufficient to promote an economy that reduces the generation of waste.
To assess the development of a circular economy in Belarus, a set of the European Commission (EC) indicators was used to capture the evolution of the main elements of closing the materials and products loop. The EC monitoring system comprises 10 indicators which are part of 4 pillars: production and consumption; waste management; secondary raw materials; competitiveness and innovation.
The reasons to use this system for Belarus are as follows: first, there is no set of indicators that provide a comprehensive overview of a circular economy in Belarus, while the EC monitoring framework allows us to capture its main elements, stages, and aspects; second, Eurostat calculates circular economy indicators for the European Union (EU) countries on a regular basis, which proves the high level of their practical application, relevance and robustness; third, the EC is constantly working on their improvement. Thus, the EC set of indicators can be a tool to monitor trends in transition to a circular economy in Belarus.
Tight spots of waste statistics in Belarus
While calculating the circular economy indicators for Belarus the following problems with data affecting the quality of statistics have been identified:
- methodological issues;
- challenges with recording and coverage;
- insufficient degree of international comparability of data, in particular woth the EU countries.
Such methodological problems as the blurred boundaries between the definitions of ‘waste’ and ‘raw materials’, and the lack of criteria for categorizing substances or objects as waste allow enterprises to classify certain substances or objects not as waste and therefore not to file information on them. As a result, less than half of the enterprises which might generate industrial waste, report it. Therefore, the question arises whether the statistical data reflect the real level of waste generation, recycling, and disposal in Belarus.
Data on municipal solid waste (MSW) have proved to be one of the areas of most serious concern. Absence of direct MSW weighing makes the data on it very sensitive to the conversion factor from volume to mass units. The differences between the Belarusian and European waste classifiers and definitions of key concepts (‘waste’, ‘recycling rate’) complicate the data analysis.
In addition, since Belarus is the 3rd world potash fertilizers producer, the share of potash waste in the total volume of waste generation is very high (63-68%). Only a small portion of this type of waste stream is recycled in Belarus (no more than 4%) due to lack of appropriate technologies of potash waste utilization used internationally. As only Germany counting as one of the world’s largest producers of potash fertilizers within the EU, to increase the comparability of data between the EU countries and Belarus, potash waste hasn’t been considered when calculating the circular economy indicators. Given all the above mentioned problems, some of the EU indicators have been adapted to the existing Belarusian statistical data.
Illustration of waste statistics problems
Waste statistics problems result in overestimation or underestimation of some circular economy indicators. A good example is the recycling rate of all waste, excluding major mineral wastes. Belarus, which is a country without a proper legal framework for the circular economy or a well-established secondary raw materials market, had one of the best performances in terms of the recycling rate (72-80%) among the EU countries in 2010-2016. This fact reflects the problems with waste statistics rather than success in waste recycling in Belarus.
Table 1. Recycling rate of all waste excluding major mineral wastes, %, in 2010-2016
Source: for the EU countries and Norway – Eurostat. For Belarus – own calculations based on the data from the RUE “Bel RC «Ecology».
Actual picture of the circular economy development in Belarus
The indicators with minimum distortions in waste statistics show that some elements of the circular economy in Belarus are still in the initial stage of their development (tables 2, 3, 4, 5). Our study reveals that the recycling rate of MSW amounted to 15.4 % in 2014-2016, which is much lower than the EU average in 2014 and 2016. Thus, Belarus has a considerable potential to increase the recycling rate of MSW. The experience of Czechia and Lithuania shows that the MSW recycling rate can be increased relatively fast if efforts are made and resources permit.
Table 2. Recycling rate of MSW, %, in 2010-2016
Source: for the EU countries and Norway – Eurostat. For Belarus – own calculations based on the data from the SE “Operator of SMRs” and Belstat.
In 2016, the recovery rate of construction and demolition waste in Belarus reached 81%, though this indicator fluctuated between 59% and 79% in previous years. However, it can be further improved as in some European countries (Denmark, the Netherlands, Germany, Czechia, Poland and Lithuania) the recovery rate of this type of waste stream exceeds 90%.
Source: for the EU countries and Norway – Eurostat. For Belarus – own calculations based of the data from the RUE “Bel RC «Ecology».
Despite the fact that the decoupling of economic growth from an increase in waste volumes is an important issue on the international agenda, trends in waste generation in many countries follow a development of GDP. In 2010-2012, the generation of waste excluding major mineral wastes per GDP unit (42-46 kg/thsd of $, PPP) in Belarus (table 4) was comparable with countries such as Czechia, Lithuania, Germany, Denmark, Sweden. However, in 2014 due to waste generation growth, this indicator in Belarus exceeded above-mentioned EU countries and approached the level of Hungary and the Netherlands. It was far above Norway that was the best performer among the European countries and a good example of how a country could really decrease waste generation.
Table 4. Generation of waste excluding major mineral wastes per GDP unit (kg per thsd constant 2011 international $) in 2010-2016
Source: for the EU countries and Norway the data on generation of waste excl. major mineral wastes – Eurostat. For Belarus – own calculations based on the data from the RUE “Bel RC «Ecology». For the EU countries, Norway and Belarus the data on GDP, PPP in constant 2011 international $ – The World Bank.
In 2012, the share of gross investment in the circular economy sectors in Belarus (table 5) decreased in comparison with 2010, however, since 2014 it have shown an upward trend. For the EU countries and Norway this indicator also includes investment in the repair and reuse sector. For Belarus this sector has not been taken into account in calculation due to lack of data. In addition, the gross investment in tangible goods is a bit different from the gross investment in fixed assets used for Belarus as the latter doesn’t include non-produced tangible goods such as land. Yet, even bearing in mind these differences in calculation, the circular economy appeared to be underinvested in Belarus compared to the EU countries and Norway.
Table 5. Gross investment in tangible goods (% of total gross investment) in circular economy sectors in 2010-2016
Source: for the EU countries and Norway – Eurostat. For Belarus – Belstat.
The employment in the circular economy in Belarus accounted for only 0.49% of total employment in 2016, while in the EU countries and Norway this indicator was approaching 3%. This again proves the fact that Belarus has a long way to go towards the creation of a circular economy.
The analysis revealed contradictory results of the circular economy development in Belarus. While the country scores highly across some indicators compared to the EU countries and Norway, this to a large extent reflects the problems with waste statistics, rather than success in waste management. The indicators with minimum distortions in waste statistics show that Belarus is falling behind leading countries in circular economy development. However, in the transition to a circular economy, the monitoring framework is an important component of this process, which permits to track a progress using the system of indicators. In order to ensure that these indicators accurately capture the key trends in the circular economy in Belarus it would seem useful to:
- align the definition of ’waste’, ‘recycling rate’ with the international one, identify clear criteria for classifying substances or products as waste and secondary raw materials;
- strengthen the accountability of entities for filing reports on waste;
- improve the system of MSW and SMRs reporting and recording, and introduce MSW recording based on weighing wherever possible;
- consider the option of improving the comparability of Belarus’ waste classifier with the European waste statistical nomenclature.¨
- Batova, N. et al., 2018. “On the Way to Green Growth: Window Opportunities of Circular Economy”, PP GE no.1.
- Belstat. http://www.belstat.gov.by/
- Eurostat / Circular economy / Indicators / Main tables. http://ec.europa.eu/eurostat/web/circular-economy/indicators/main-tables
- RUE “Bel SRC “Ecology”. http://www.ecoinfo.by
- Shershunovich, Y. and I. Tochitskaya, 2018. “Waste Statistics in Belarus: Tight Spots and Broad Scope for Work”, PP GE no.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.