Area development can best be described by a definition prepared by the Chair of Urban Area Development at the Delft University of Technology. This definition is as follows: ‘area development is the art of linking functions, disciplines, parties, interests and money flows, with a view to (re)developing an area ‘.
We drew up a list of the obstacles identified and possible tips and recommendations which emerged during the interviews and workshops. Interestingly, a number of obstacles with regard to two central themes were named on several occasions:
- definition/criteria/measurability of the circular economy
- market approach
The lack of clarity on the definition and the yardsticks according to which circularity can be measured results in a lack of clarity and a degree of reticence with regard to the entire theme. How do you select a circular contractor? What materials should we actually be using? And how do you know whether your project is actually circular?
These problems also call for a different market approach, whereby the public and private sector together go in search of a circular solution. At the same time, governments are used to avoiding risk wherever possible. They prefer tried and tested and proven entrepreneurs or technologies and innovations. So how do you make that combination? Should we for example introduce quality labels for used material? Or are suppliers permitted to demonstrate in some other way that the material they use is safe?
All of these are questions and obstacles that municipal authorities are struggling with, and that repeatedly emerge in numerous projects. Obstacles also emerge over which municipal authorities have little influence, but that are clearly relevant. Broadly speaking, the obstacles identified can be divided into three groups. Recommendations were formulated for each group. The picture below is a diagrammatic representation.
Obstacles and recommendations at project level
- Circularity is not often included in the project objectives.
- It is new, so it takes more time and everyone must be willing to make that time available.
- It is difficult to identify the correct indicators and criteria:
- Lack of clarity on the definition of a circular town/city.
- Sub-optimal choices and no clear overview of all asset aspects.
- Too much focus on issues relating to material use.
- Where is the greatest gain: replacement, management, maintenance?
- Lack of clarity on the market and technological opportunities.
- Consequences for the costs of circularity.
- Circular building is not necessarily more expensive, but circular renovation clearly is.
- That circularity can only be combined with more expensive homes is a particular observation that demands for discussion.
- The current approach to building is not geared towards reuse. For example much of the material is glued or cemented in place.
- A project-based – unique – approach seems contrary to ‘modular design’.
- It is not achievable with a single party; many different parties are needed, each with their own area of expertise, for example housing corporations, municipal authorities, contractors, developers.
- The costs precede the benefits, and are often earned back less quickly than in a linear model.
Recommended measures and actions at project level
- Involve the market early in the process.
- Right from the start opt for expectation management.
- Make circularity an explicit goal for projects.
- Use modular design and make sure that in the future, materials can be easily and directly reused or exchanged, at high value.
- At present, the focus is too often sector or industry-specific. However, by going beyond the sector limits, it is possible for example to tie in with the energy transition.
- Things will not go perfectly straight away.
- Circular building need not be more expensive if it is successfully adopted right from the start of the planning stage, and if the various issues are well organised, for example on the basis of a material passport.
- The precise definitions of circular are not really relevant. They must be made totally specific if they are to be successful. On the other hand, an abstract vision can help in accelerating the process of precise specification.
- Do not demand too much of the market. Select a number of important spearheads.
- Use the Netherlands Enterprise Agency (RVO) procurement tool for circular purchases. It offers useful support.
- Dare to establish collaborative ventures on the basis of vision, objectives, working methods and principles. Do not rely exclusively on standards, KPIs, etc.
- Make sure you understand what the ‘circular’ element of a project costs. This generates greater understanding and will result in greater support in the future for projects with a clearer business case.
- Involve the financial department right from the start in any circular project.
- As well as financial consequences, also clarify the non-financial benefits (social cohesion, environmental impact, avoided material, health, etc.).
- Use a material passport. Data and knowledge are essential for the success of circular working practice.
- Communicate on the results within your own organisation.
- Use all (internal or external) knowledge available to correctly evaluate the innovation.
Obstacles and recommendations at municipal level
- It is often necessary to include multiple policy targets in projects and tendering procedures.
- Municipalities want both innovative and proven methods; and this is a contradiction in terms.
- The ambition is high but is not always matched by government commissioning practice. The contracting-party attempts to generate a watertight set of requests, when what is in fact needed is greater freedom.
- Many standards are no longer state-of-the-art and as a result not a good selection tool.
- There are huge discrepancies (in terms of knowledge level and ‘sense of urgency’) between policy makers and those responsible for implementing the projects.
Measures and actions recommended at municipal level
- Focus on specific projects and subjects, by not implementing all policy objectives in every project.
- Focus attention on the essential organisation culture.
- Other forms of (internal) organisation are necessary.
- Official consultation between departments and different forms of governance need to be differently organised in order to arrive at clear zoning plans and to avoid suboptimal choices.
- It is very useful to have an administrative official who is fully in favour and who wants to make a mark.
- The new environmental act and vision may well offer opportunities for the circular economy. Make sure you tie in with these new developments.
- Policy makers must be aware that they are calling for ‘extra efforts’ from their project managers. Recognise that this will require extra time and effort and be willing to negotiate, but push forward.
- Establish a storage depot or material yard to make it possible to reuse and share residual flows between different assignments.
- Plan larger assignments to increase the practicality of reuse within a single assignment.
- Financial programming should not be focused exclusively on investment costs but also on value.
Obstacles and recommendations beyond the scope of the municipality
- Quality of secondary materials:
- Recycled material does not always satisfy virgin specifications, and demands longer test phases.
- Production processes are not adapted to variation in input specifications.
- Receiving parties naturally demand a guarantee on residual flows.
- Absence of certification for new materials.
- Municipal authorities would like to impose stricter requirements than permitted by law.
- The definition of waste is anchored in (European) law and as a result so is the handling, transport and use of secondary materials. In certain cases this makes it more difficult to work with residual flows.
- Municipal authorities have limited implementation power; they can above all encourage and promote.
- The existing infrastructure results in lock-in. There is not always sufficient urgency for the smarter use of our resources.
- No balanced business case with circular businesses for short-term solutions;
- Many parties see no or insufficient prospects in valorising residual flows, and take insufficient account of this possibility at the start of a project.
- Businesses maintain limited stocks and therefore have no stocks of secondary material available. Stock control and logistics cost more.
- In many cases, standards match poorly and are not up to date (for example BREEAM allocates no points to used wood, only FSC wood).
- There is no clear way of clarifying the non-financial benefits of the circular economy. Social cost benefit analysis takes a great deal of time and effort.
Measures and actions recommended that go beyond the scope of the municipality
- It would be useful to have material depots and ‘market places’ at different levels, for example municipal and regional. Bouw op de kaart (Building on the map) could be useful in this respect.
- Certification and labels for used material must be established.
- Lobbying and placing these issues on the agenda at higher levels of government and larger market parties.
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About the working group
The working group focused on the obstacles within area developments, but this does not mean that only non-successful circular projects were examined. Both successful and less successful circular projects can be useful as input, in that certain circular aspects in either type of project may have come to the fore. We also struggled to find projects in which circular aspects did not emerge clearly. People prefer to talk about successful projects, even if they suffered setbacks.
Besides that, this report brings together the knowledge acquired and the outcomes of recent projects involving circular area development and district development from Platform 31 and the Board of Government Advisors (CRa). The working group also drew up an inventory, and used information from projects from the municipalities affiliated to the city deal programme.
Links with other working groups
Indicators: when is a project circular and when is it not? This question was beyond the scope of this inventory, but was nonetheless identified as a major obstacle. A group of indicators would help in developing a better definition, that can then be used by the municipal authorities.
Projects: on several occasions, the same projects were interviewed, and all things being equal, this advice should help promote circular projects.