There are several examples of companies that have managed to combine circularity with economic success. Easy-to-navigate second-hand sites are one example, reliable car-sharing services another. The common denominator? Companies have created attractive circular offers with the end user in mind.

"Instead of making money by using finite resources and selling them cheaply, these companies are making money by closing loops so that resources can continue to flow. Many circular business models are about retaining ownership of the products in order to better control the flows. In practice, this can mean that the users are not the real owners of the product," says Anneli Selvefors, senior researcher in business design at RISE.

But what about companies with a long history based on a linear business model? According to a report from Luleå University of Technology published in 2024, there are no examples of large companies that have successfully scaled up a circular business model and replaced the old one. "There are many aspects that make it easier to stay in the linear world," says Sara Renström, senior researcher in technologies for interaction at RISE.

"It is difficult to convert an entire company, and the fact is that it is still financially viable to work with the linear business model. But in a future where resources are even more scarce than they are today, it will be harder to sustain that way of working."

Do you really understand your users?

Sara Renström and Anneli Selvefors have researched the enablers and barriers to creating attractive circular offers. Circular offers are a prerequisite for the transition to a circular business model. After interviewing 13 companies at different stages of their transition and reviewing the literature on the subject, the researchers identified a number of different areas that are important for companies' ability to develop circular offers that customers actually want.

Much depends on understanding your users and their needs. It may sound simple, but research shows that simply asking your customers what they need and want is not enough. Often users don't know what they need until the solution is available.

"For creative design work, which we believe is critical to creating really good circular value propositions, you need to start looking at what people do and use. That's one level deeper than just talking to customers. The next level is to find out what they feel and dream about," says Sara Renström.

More collaboration along the value chain

Getting to know your customers actively, for example through user surveys, is therefore a prerequisite for creating attractive circular offers. It is also important that the team conducting these surveys is in close contact with the company's production and marketing departments. Then the insights don't get stuck at the first stop.

"If the user perspective is allowed to permeate all departments of the company, it becomes something to collaborate on. Of course, it is possible to run a successful business anyway, but we have found that an organisation working together on this issue can more easily develop attractive circular offers," says Sara Renström.

It's not just a question of getting good cooperation within your own organisation, but also cooperation with other actors along the value chain. For example, a company that wants to move from selling products to renting them can enlist the help of an IT provider to create a digital platform from which the rental can take place.

"There are opportunities for all businesses"

It is a challenge to move away from the linear approach that has served companies well for decades and to create entirely new, circular offerings. This is where RISE comes in. RISE has extensive expertise in circular value propositions and business models.

"We can help identify user needs in relation to the client's specific niche. We can also help at a strategic level, thinking together about how they can work with users during the development process. It can also be about identifying possible partners in the value network and initiating the collaborations needed to move forward," says Sara Renström.

"There are opportunities for all companies to strengthen their own capabilities and conditions for developing circular offerings and business models that are more attractive than their linear predecessors," says Anneli Selvefors.

The new legislation mandates development across numerous industrial sectors.

"We are still largely waiting for the 'how' to be put in place," says Christina Jönsson, Senior Researcher and Vice President at RISE. "The path to realizing these ambitions is not yet carved out, but we already know that this will affect strategic projects, require more efficient permit processes, and impact several industries."

Increased clarity on the origin

Industrial firms across multiple sectors may henceforth need to clearly disclose the origin of materials in their products. These requirements already align with other EU regulations, like the ecodesign directive and the batteries regulation. Raw material suppliers will be directly impacted, whether they are mining companies or companies in the recycling sector, as they are expected to substantially increase their raw material contributions compared to current levels.

"We are unsure whether there will be requirements to extract specific metals and minerals when managing streams containing them. Hypothetically, picking up iron from the ground might require managing other identified critical metals, possibly with various support systems to ensure economic feasibility. That is one potential approach to achieving the ambition: To gain access to secondary material streams that would otherwise end up in landfills." 

More efficient permit processes

Christina Jönsson points out that that these hypothetical requirements could be regulated within the permit processes.

"Everyone agrees that the permit processes need to be faster. We already know that we have access to pretty much all the material needed for transformation and electrification. All we have to do is to increase the extraction rate, and not waste years on complex processes. One possible approach could be national administration, or a national task force with the right expertise supporting the county administrative boards."

Faster processes do not necessarily mean that the environmental issues associated with extraction are overlooked, states Christina Jönsson. Rather, it's about clearly addressing the conflicts of interest and making decisions. 

"It's about balancing competing interests against one another. Would it, for example, be okay with increased local emissions into the water, if it leads to reducing the use of fossil fuels with global implications? We have to be able to make those kinds of trade-offs.

Recycled raw material accounts for only one percent

In Sweden, battery production is now growing into a major industry. Therefore, there should have been foresight regarding the need to supply the industry with sustainable raw materials, Christina Jönsson argues.

"Extraction in Sweden has two major advantages. Firstly, that we can extract with greater sustainability, environmentally and socially. Secondly, that we have access to several metals and minerals that are lacking elsewhere."

At the same time, the recycling rate must increase. The proportion of recycled raw material in production is less than one percent. Christina Jönsson emphasizes the need for industries, which currently vary significantly, to learn from each other.

"The mining industry's knowledge of primary raw materials is needed. The recycling required relies on fairly knowledge-intensive chemical expertise, partly found in the mining sector today. The operators should be capable of transforming some of their operations through modest knowledge transfer. When initiating new extraction, it's crucial to adapt the entire process – from extraction to product – to manage various streams beyond virgin materials. This approach enables the development of systems capable of handling circular flows right from the start!"

"RISE can contribute through research and innovation, by convening stakeholders, engaging in skill transfer, and providing facilities for testing and demonstration. We also review standardization and requirements: for example, when should the same requirements be applied regardless of the material used, and when can different requirements be applied if it allows for greater use of recycled materials? These are the types of questions we can assist in answering.

The challenge can be overcome

All in all, Christina Jönsson is optimistic. She argues that we have long known what needs to be done, but it is only now that things have started to move sufficiently.

"For a long time, there have been lists of critical metals and minerals, and with the altered security situation in Europe, several strategic needs have been brought to light. However, it is the necessity of transition that ensures what we have long known needs to be done is finally being accomplished. Wind power, solar energy, hydropower, electrification, batteries – all these sectors require critical metals, which are largely available underground and even more extensively utilized around us. Clearly, this challenge is achievable."

In 2023, RISE was entrusted by the Nordic Council of Ministers to coordinate a student competition to inspire, educate, and allow transdisciplinary student teams in the Nordic countries. The competition task was to co-create design ideas based on the overall vision of the New European Bauhaus and its three core values: Beautiful, Inclusive, and Sustainable.

The competition 2024 - solutions for the reuse of four sites

In the spring of 2024, student teams took on the challenge of designing innovative and creative solutions for the adaptive reuse of four sites: Kvarteret Hammaren in Umeå (Sweden), Verksgata 54 in Stavanger (Norway), a military area in Kuopio (Finland), and Gadehavegaard in Høje-Taastrup (Denmark). A common goal for the property owners of these sites was to investigate the possibilities of transformation instead of demolition and redevelopment.

The competition was divided into two phases. The first phase was open for all student teams to present design ideas for one of the competition’s four sites. Almost a hundred students from Nordic universities submitted 29 design proposals, and 12 proposals were selected to be further developed and refined in phase two according to the jury’s instructions. During the award ceremony in Umeå on May 30th at Umeå School of Architecture, a team was crowned the winner for each site.

• Kvarteret Hammaren in Umeå, Sweden 
• Winner: Intertwining narratives by Malin Dybeck, Molly Myrsten, and Sophie Sjöberg, Lund University, Sweden. 
• Military Area in Kuopio, Finland
• Winner: Resilience of togetherness by Veera Annala and Annika Annala, Aalto University, Finland. 
• Verksgata 54 in Stavanger, Norway
• Winner: Fjordnest by Albina Lampa and Isabelle Olsson, Chalmers Institute of Technology, Sweden.
• Gadehavegaard in Høje Taastrup, Denmark
• Winner: Again and Again by Nils Österberg and Adam Sävhage, KTH Royal Institute of Technology, Sweden.e.

The NEB Design Challenge serves as one example of RISE's involvement in the New European Bauhaus initiative. Find out more projects and initiatives about it:

•    New European Bauhaus - En grön samhällsutveckling byggd på mångfald och inkludering (in Swedish)
•    Stor satsning på Sveriges kompetens inom träbyggande och cirkulärt byggande (in Swedish)

The Design Challenge was organized by the Nordic Council of Ministers, Nordic Carbon Neutral Bauhaus, Finnish Ministry of Environment, and the Research Institute of Sweden in collaboration with Architects Sweden.

Jury assessment

The jury, consisting of Camilla Berggren-Tarrodi (RISE), Marlene Johansson (RISE), Ambra Trotto (EIT Culture & Creativity), Maja Westman (Kvarteret Konstruktörer), and Patrik Karlsson Ryberg (RISE), appreciated that the students’ proposals spanned the full spectrum of architectural intervention, from new imaginative functions within existing buildings, through careful readaptations, to large-scale transformations.
 

Among the many competition entries, the winning teams’ creative and empathetic design proposals serve as models for more sites with similar prerequisites than those in the competition, and as inspiration with great relevance for the entire construction industry. Also, in times of great uncertainties in the world, the competition's design proposals convincingly demonstrate how communities can strengthen society through architecture.

To enable positive societal transformation and achieve the goals of the Green Deal, all the core values of the New European Bauhaus remain central, and continued efforts are required from students, professionals, and policymakers.