Solid foundations are essential for building any new structure. This principle applies just as much to creating a Circular Economy as it does to constructing a house. Luxembourg unveiled its strategy for the Circular Economy in 2021, but its foundations lie in research reports and circular projects that have been conducted over the past decade.
Studies such as Luxembourg as a knowledge capital and testing ground for the circular economy published in 2014, the Third Industrial Revolution study for Luxembourg in 2016 and the Zero Waste Strategy adopted by the government in 2020 have all shaped today’s approach. The foundations are also ancred in Luxembourg's National Energy and Climate Plan (NCEP) as well as the most recent roadmap Ons Wirtschaft vu muer for a competitive and sustainable Luxembourg economy after the Covid-19 pandemic.
The aim of every strategy is to create in theory and deliver in practice. The early work in Luxembourg to support a Circular Economy is no different, and has led to numerous pilot projects and programmes being completed, as well as national and international promotion events. Hereafter, some key initiatives in various sectors are presented and the short video provides a summary with Circular Economy highlights over the last 5 years. More examples of publically initiated and supported initiatives can be found in the section actions and projects in the coming weeks.
Supervised by Minister of Public Works, the Fund for the Urbanisation and Development of the Kirchberg Plateau has taken a participatory approach to projects in recent years, enabling local residents to become actively involved. It has also embraced a Circular Economy approach for developing the 365 hectares of the plateau, aiming “to create positive impact projects, instead of projects which satisfy minimal criteria specifications.”
Among other public construction projects to have embraced circular principles is Elmen, a 27-hectare development near Olm by the public promoter SNHBM that will ultimately comprise 800 affordable homes, every one of which will be LENOZ-certified, half of them timber-framed, and almost zero in terms of energy consumption. Last but not least, the Fonds du Logement has developed masterplans with circularity aspects for the new urban developments "Wunne mat der Wooltz" in Wiltz and "Nei Schmelz" in Dudelange.
The Ministry of the Economy supports SMEs wishing to embrace the Circular Economy with its Fit4Circularity programme managed by Luxinnovation. The aim is to help firms limit their use of raw materials and maximise their use of renewable sources. Equally importantly, its objective is to help them develop innovative products and services that promote sustainable growth, reduce energy consumption and increase recyclability.
To develop the skills needed to achieve this, the first Circular by Design Challenge was organised in 2020. The competition provides encouragement and coaching for designers and entrepreneurs to develop new circular products and business models.
Another important development for the industrial sector is the Product Circularity Data Sheet, designed to be a template for reliable data about a product’s circular properties. Launched in 2019, the initiative is supported by more than 50 companies from 12 European countries and is intended to lay the foundations for a future international standard.
In partnership with the private sector, the government has put in place several initiatives to support sustainable and impact investments, and to help attract private investors to finance projects. These include the International Climate Finance Accelerator, which supports innovative fund managers; a dedicated labelling agency for sustainable investment funds and products; as well as a joint platform with the European Investment Bank to help de-risk climate and related investments.
In September 2020, Luxembourg became the first European country to establish a Sustainability Bond Framework, in line with the EU’s latest recommendations for a taxonomy defining sustainable economic activities, and to issue a sustainability bond. In addition, the government lowered the rate of subscription tax for funds investing in sustainable activities on January 1, 2021, in compliance with the EU taxonomy. As the latter will be expanded to include the Circular Economy, both initiatives will help to channel investments into circular projects.
The Circular Economy strategy is also supported by the Luxembourg Sustainable Finance Initiative.