Some claim that economic development and sustainability are fundamentally opposed. What is your view on this matter?

Minister of the Economy Franz Fayot speaks about combining economic development with long-term sustainabilityFranz Fayot: The two can, and must, go together. The linear economy, as we know it, is facing an increasing number of challenges linked to the scarcity of raw materials and pollution. Implementing a circular economy, where sustainability and economic development are complementary rather than contradictory, would offer solutions to these problems. The circular economy implies a holistic management of stocks as well as of product and material flows, and aims at creating positive economic, environmental and social impact at all stages of the value chain.

How does the Luxembourg government work with economic sustainability?

We see clean technologies in general, and the circular economy in particular, as essential tools for building a more sustainable and resilient country. These topics are strongly embedded into the 2018-2023 government agreement, and the circular economy is a transversal theme of our strategy for data-driven innovation. Several national projects with the aim of strengthening clean technologies and the circular economy are underway. Our next major milestone is the launch at the end of 2020 of our national circular economy strategy, involving all stakeholders concerned including the relevant ministries.

Could you please outline some of the main initiatives that are being implemented in order to strengthen cleantech and the circular economy in Luxembourg?

One of our flagship projects linked to Luxembourg’s expertise in data handling is the Circularity Dataset Initiative. Its objective is to develop a European industry standard that offers a regulated framework for providing circular data about products all the way through the value chain. My team has recently finished the first proof of concept of a Product Circularity Data Sheet which will be used to document such circular product data.

We have launched a new study to support the emergence of circular business models.

The 3 principles of the circular economyThe sustainability perspective is also reflected in a bill approved in July this year, implementing a new aid measure for companies that have suffered the impact of the COVID-19 crisis. By means of high subsidy levels (up to 50% of eligible costs), this new financial aid encourages firms to carry out economic development, digitalisation and environmental protection projects. An addition level of subsidy is awarded for projects that include a circular economy aspect. As circular products require appropriate business models to be successful, my ministry, together with the Ministry of Finance, has launched a new study to support the emergence of circular business models. The goal is to define first-class financial and business services that would help such business models flourish in the future.

Circular construction is another key theme in Luxembourg. It is worth mentioning the on-going building of a dismountable parking garage, the components of which can be taken apart and reused in new buildings, and of a cleantech incubator in Bissen north of Luxembourg City. In addition, Luxinnovation, the national innovation agency, and the Luxembourg Institute of Science and Technology (LIST) are exploring the potential creation of a deconstruction platform that would be used to improve the recovery and resale of materials and secondary products resulting from deconstruction in Luxembourg.

What future opportunities do you see for Luxembourg in the field of clean technologies and circularity?

With its expertise in IT and finance, as well as its close interactions between social, institutional and economic players, Luxembourg is a promising testbed for emerging circular economy business models. Thanks to its entrepreneurial tradition, our country is well positioned to trigger successful pilot projects by using an intelligent combination of regulatory, financial and communication tools to provide long-term visibility to companies investing in circular business models and products. The forthcoming national circular economy strategy will take Luxembourg’s development into a living lab and European hub for circular businesses yet another step forward.

Other cleantech priority fields include urban farming – in 2019, Luxembourg was the first country to adopt an urban farming strategy on a national scale – and energy efficiency. We wish to attract more innovative companies active in these fields to Luxembourg.

The COVID-19 pandemic has had a profound impact on our society and economy. Has it also influenced Luxembourg’s policies in terms of sustainability?

Already before the pandemic, many governments in the world – including that of Luxembourg – had adopted circular economy policies for a sustainable resource management. The “European Green Deal”, the EU’s plan for becoming climate neutral by 2050, includes a circular economy action plan. In addition to bringing environmental benefits, the circular economy will provide greater resilience in view of expected shortages of raw materials in key industrial sectors.

I think the COVID-19 crisis can be seen as a catalyst that has accelerated important trends, and it has indeed strengthened the need for sustainability even more.

I think the COVID-19 crisis can be seen as a catalyst that has accelerated important trends, and it has indeed strengthened the need for sustainability even more. Sustainability and resilience are two of the major market trends in the post COVID-19 economy identified by Luxinnovation. At the national level, we have launched a programme called Fit 4 Resilience that offers companies the opportunity to carry out a strategic assessment on how resilient they are and on what actions to take to increase their resilience so that they are better geared up for any future crises. On behalf of Luxembourg, I have also argued for putting sustainable growth and digitalisation at the centre of the EU’s relaunch strategy.

What opportunities do you see for international cooperation in this field?

The need for a more resilient and sustainable economy is of course not limited to Luxembourg – it is a global trend, and a key priority in the EU. Luxembourg is involved in the European Circular Economy Stakeholder Platform, which brings together public and private European stakeholders to discuss, present their strategies and exchange good practice and knowledge. We are also involved in the National Circular Hotspot Network, where the Scandinavian and Benelux countries are very active. In addition, we collaborate closely with our neighbouring regions. Luxembourg was selected to host the next edition of the Cleantech Forum Europe, a major get together for all players investing in cleantech start-ups and innovative solutions. Although the pandemic will prevent us from welcoming the international delegates on site in Luxembourg, we are proud to host this digital event and share our experience with colleagues from other countries. Cooperation is key, and I am convinced that it will help promote our technologies and build attractive markets for companies doing business in Luxembourg.

Photo: Anne Lommel; Illustration: Quattro Creative