Benefits for Luxembourg The circular economy offers many opportunities in Luxembourg

For countries around the world, a Circular Economy will be the route to a better way of life. Its key aims of protecting the natural world and building a more sustainable economy are common to nations of every continent.

But what about Luxembourg? Will we benefit from being part of this new economy? And if so, how?

The answer, in short, is that Luxembourg will enjoy a wide range of economic and environmental benefits by adopting this model. Here’s a breakdown of why the government is working to deliver them.

1. New business opportunities

For businesses, an alternative to the traditional ‘make and sell’ model is to provide customers with a ‘Product as a Service.’ By retaining ownership, they can create extra revenues from a range of services, recover the product to gain more control over their raw materials, and be closer to their customers. This model already exists in manufacturing and construction for B2B businesses, e.g. Rolls Royce with its turbines, and Arcelor-Mittal with its steel sheet piles. However, B2C models for consumer goods are also emerging in Luxembourg.

2. More efficient industries

A firm that has more control over its raw materials – through recycling and reusing, for example – is less dependent on its suppliers. This provides greater security of supply for both individual companies and Luxembourg as a country, while making the resource itself more productive. A better use of materials also lowers the cost of waste management.

3. Less pressure on the environment

Good management of our natural resources, including soil, space and energy, reduces the pressure on natural ecosystems, both locally and globally. This makes the Circular Economy a powerful tool for tackling climate change and encouraging sustainable development that takes nature into account. A sound management of space is particularly relevant for a small country such as Luxembourg, where land is a scarce resource.

4. Preserving biodiversity

By returning nutrients to the soil, for example through composting, we can enrich the earth for agriculture, and by reducing toxic chemical emissions, we can improve both the quality of our land and air. Both these ways of better managing the biological cycle will help to protect our precious biodiversity and ecosystems in Luxembourg.

5. Healthier citizens

We are very much a part of that biological cycle, and are exposed to the same harmful effects of pollution. By designing out the toxic elements of materials and emissions, a Circular Economy will help us to have a healthier food chain and living environment.

6. New financial services

Already growing rapidly, the market for ‘green finance’ and ‘sustainable finance’ will be further boosted by the Circular Economy, creating new opportunities in service sectors that are already well-established in Luxembourg. As a leading financial centre with a 50% market share of all listed ‘green bonds’, Luxembourg is ideally placed to help develop new products and to finance the transition to a Circular Economy, both nationally and internationally. 

7. New jobs

Developing new services for the Circular Economy will contribute to job creation, not only in professional, technical and managerial roles, but also in new positions for a less skilled workforce, particularly in terms of handling the flow of materials and products. A thriving Circular Economy will deliver the benefits of digitalisation to the job market.  

8. Coping with crises

As became apparent during the Covid-19 pandemic, the supply chains that provide us with raw materials and finished products can be subject to a sudden crisis. The Circular Economy, with its focus on more local and regional networks, can offer a more robust supply chain for companies and consumers alike.

9. Raising our profile

By implementing the Circular Economy, the government will raise Luxembourg’s visibility as leader in this global transition. With its central position in Europe, strong ties with neighbouring countries, and a traditionally very open and connected economy, Luxembourg can be a key player in this economic model.

10. Attracting foreign investment

Those advantages, along with our well-connected institutions and high-performance ICT and financial sectors, should make Luxembourg attractive to foreign investors as a testbed for new, Circular Economy business models. Such investment by global companies would drive economic growth and job creation throughout the Grand Duchy.

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