Luxembourg's Circular Economy Luxembourg as a testing ground and competence centre for the Circular Economy

Circular economy is the future. The idea of endlessly recycling or even upgrading resources could solve essential problems of our time, i.e. environmental protection or scarcity of resources. Luxembourg recognised the opportunities early on and is now actively strengthening its Circular and Performance Economy.

A key pillar of the Luxembourg economy

Circular economy is all about using resources in the most efficient, non-destructive way for as long as possible. By optimising the design and usage, waste will be minimised or even eliminated. Because today, the pressure on our current business model is rising in view of an increasing competition from low cost countries as well as the scarcity of raw materials in Europe and particularly in Luxembourg. Strict environmental regulations and legal obligations by the European and national legislators are pushing for the implementation of circular economy, as environmental damage is becoming an increasingly costly burden and a threat to quality of live.

In order to tackle the challenges ahead, Luxembourg has made impressive progress, becoming a leader in Circular Economy. The ‘Third Industrial Revolution’-strategy of the Luxembourg Government defines Circular Economy as a key horizontal topic underlying all its other six pillars. In 2019, the Ministry of the Economy integrated the Circular Economy in its Data-driven Innovation Strategy as a key-sector for innovation in the years to come.

Performance Economy

Imagine that a company does not just offer you a specific product or commodity, but they rather offer you a performance. The supplier keeps full ownership of his products and only agrees to deliver a specific result. This is essentially the idea behind the concept of the ‘Performance Economy’, an approach that researchers claim is a win-win-model for customers, service providers and the environment.

Performance economies create an incentive for the service providers to design their products as efficiently as possible so that they may be reused, repaired or recycled completely. But while such business models offer great opportunities for everyone, their ubiquitous implementation still remains a challenge due to the substantial transition costs, complexity of contract, insurance issues or legal obligations and restrictions.

Luxembourg, your partner of choice

Luxembourg is currently positioning itself to become the ideal partner for all companies deciding to prepare for the future by venturing into the Circular or Performance Economy. Thus the ministry of the Economy, together with Luxinnovation, is building an ecosystem and putting together support packages, dedicated to help businesses thrive in this promising area.

The future is now

Circular and Performance Economies, even if it still sounds largely futuristic, is already present in many sectors of the Luxembourg Economy. And although we are only at the beginning of discovering the possibilities, it constitutes already an interesting test market. Mostly in urban development and the closely related construction sectors, large projects are currently already being planned or realised, such as: Wunnen mat der Wooltz, Automotive Campus, Néi Schmelz or urbanistic projects such as the Kirchberg-Plateau.

Harnessing data – the Circularity Dataset Initiative

Launched in 2019, the Luxembourg Governemnt’s Circularity Dataset Initiative aims to develop an industry standard template for circular data on products in order to provide reliable data on circular product properties. To date, already more than 50 companies from 12 countries and industry leaders have joined the project and the initiative is a prime example of Luxembourg’s Data-driven Innovation Strategy translated into concrete action.

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