Prospects for the Circular Economy in Paraguay and the Americas

This is the second interview of a series of interviews that the Circular Economy Platform of the Americas is conducting with colleagues in the different countries of the continent, aiming to better understand national contexts, opportunities and possible barriers that could arise in the transition to a Circular Economy.

In this opportunity, we gathered the vision of Fernando Britez who is Co-Founder of Kora Paraguay and Member of the Working Group of the Circular Economy Platform of the Americas. With a career in the environmental sector occupying various positions in the public sector, academia, and NGOs. He shared with us very practical information to understand what the future of Paraguay could be, following the principles of the Circular Economy.

1. Can you tell us about yourself and your experience in Circular Economy?

From an academic point of view, I hold a Degree in Geographical Sciences from the Faculty of Engineering of the National University of Asunción and Master (candidate) in Agro Business, Rural Development and Environmental Management from the Universidad San Carlos de Asunción. I have participated in different specialization courses such as Integrated Water Management; Hydroinformatics; Integrated Urban Flood Management; Environmental Management; Environmental Impact Assessment; Environmental Audit; Solid Waste Management, Environmental Policy and Circular Economy in Paraguay as well as in Brazil, Bolivia, Uruguay, Spain and South Korea.

I have also taught at the Columbia University in Paraguay and at the Universidad San Carlos, being in this last one tutor of three thesis in the Environmental Sciences Department in topics related to Integral Waste Management.

In terms of work experience in the environmental area, in the public sector, I have served as Director General of Environmental Management and Environmental Advisor in the Municipality of Asunción, between the years 2007 to 2015.

I’ve also worked for the Secretary of the Environment, now the Ministry of Environment and Sustainable Development between 2015 and 2017, where I first served as Director of Hydrology and Hydrogeology. Then, I served as Director of Environmental Quality Control, and I was also Focal Point for the Stockholm Convention on Persistent Organic Pollutants; Focal Point of the Project "Asunción Green City of the Americas – Pathways to Sustainability"; Focal Point for the project "Strengthening the environmentally sound management and final elimination of PCBs (biphenyl polychlorinated) in Paraguay"; Alternate Focal Point of the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and its Disposal; and Alternate Focal Point of the Master Plan for Integral Solid Waste Management for Asunción and its Metropolitan Area.

From 2018 to last January, I went to a sub-national government, in the Central Department Governance, serving as the Departmental Secretary for Sustainable Development, from where I worked in coordination or liaison with the Central Government and the municipalities regarding the environment, drinking water, and basic sanitation. This department covers 19 municipalities and is the most urbanized area in the country, with almost 35% of the total population.

And, currently I am returning to work as an Advisor in the Municipality of Asunción. At the same time, for 2 years, actively promoting the Circular Economy in the country.

And in that sense, since 2007 I have been indirectly involved in the Circular Economy, since one of my tasks in the Municipality of Asunción was to work closely in the environmental control and monitoring of the landfill in the city. This job had a technical component and also a high socio-economic component since in Paraguay and almost all of America it is very common to have people poking through the garbage (here they are called “Gancheros”) to recover products or materials to sell them and get their daily livelihoods.

During my master's in Environmental Management, we studied the Circular Economy, so I decided to dig deeper, and I came across with Michael Braungart and William McDonough's book "Cradle to Cradle: Redesigning the way we make things" and Gunter Pauli's book "The Blue Economy." I also have to mention the extensive outreach work of the Ellen MacArthur Foundation and all the available content that have been generated in recent years on the subject, mainly because of the great boost of the European Union. I became passionate about the Circular Economy, so that, along with being linked to a public institution, I am Mentor and Co-Founder of Kora Paraguay, a public utility association (legal figure in Paraguay for NGOs) that we created together with other colleagues and friends in May 2018 and where we work to raise awareness on the Circular Economy principles and Sustainability in Paraguay; I am also the Local Organizer of the Circular Economy Club, an international network with the mission to bring the circular economy to every corner of the world, and also since July 2018 Member of the Working Group of the Circular Economy Platform of the Americas.

Although we, as Kora Paraguay, are an organization that does not receive financial support from the state or institutions outside the country, we have dedicated a lot of work to raise awareness and in just 1 year we have held or participated in more than 20 Conferences, Congresses and Seminars to present what is the Circular Economy, its principles, case studies, circular business models, its benefits to the public, private and society sectors. We are convinced that if we achieve circularity in the way we produce and consume, we will come to have a real sustainable development.

2. What is the current state of development of the Circular Economy in Paraguay and how do you see the development at the regional level?

In Paraguay:

We are taking the first steps in Paraguay. Although in previous years there were professionals who wrote articles about it (more journalistic than academic), only since last year importance is given to the subject in Paraguay.

There is still a lot of work to be done to help the different sectors understand what the Circular Economy (CE) is, since they confuse it as a new waste management model or simply as a new term for "recycling", as this is the most developed strategy in the country.

In order to talk about the state of development of CE in Paraguay, it would first be important to give a very quick description of our condition as a country. Among the main items we import are fuels and petroleum derivatives, vehicles and their spare parts, computer equipment, telecommunications and electronics, fertilizers, textile products, agrochemicals, plastics, iron, steel, paper, cardboard, footwear, etc. Among them, the field of fertilizers continues to surprise me with the volume of imports, even though I know that we are one of the countries with the largest production of meat and grains, and therefore we need to replace the nutrients in the soil to continue producing food. Why does it surprise me? Because every day we waste a large volume of organic matter (food waste and plant material, for example) that have a high potential to become fertilizers. Unfortunately, our production and consumption scheme continues to be very linear.

Regarding exports, the main items are soybeans, wheat, rice, corn, sorghum (either in grains or in oil) and meat and its derivatives, wood and charcoal.

In summary, we are a net importing country of products and consumer goods with short life and exporter of products almost in their natural state. With the economic growth experienced in the country in recent years, the import of consumer goods has increased. Economic progress means greater consumption, and this in turn represents a greater generation of waste, and of these, a low percentage is recovered and reused.

On the development of the CE in the country, as I mentioned, we are taking the first steps. In the middle of 2019, the implementation of a four-year programme was started with an investment of 12 million euros for the "Improvement of the competitiveness of small and medium-sized enterprises (SMEs) and the business climate" to: (a) strengthen the national legal, political and institutional framework and improve public services to increase the competitiveness of SMEs and their integration into value chains; (b) expand high-quality services for businesses, including technological development and innovation; and, (c) improve the environment for business, trade and investment.

This programme will be implemented through key partners in the public and private sectors and business environment such as the Ministry of Industry and Trade, the Paraguayan Industrial Union, the Production Cooperatives (FECOPROD), the United Nations Industrial Development Organization (UNIDO) and the World Bank (WB). While the Circular Economy is not the main objective in this programme, activities will be in place to boost it in the country and it will be promoted as a strategy to empower SMEs.

To this initiative it must be added that this year, a consultancy work will be started called Diagnosis of the current situation of the Circular Economy for the development of a Road Map of each requesting country (II) convened by the United Nations Industrial Development Organization (UNIDO) through the Climate Technology Center and Network (CTCN). This work will be carried out jointly in Ecuador, El Salvador, Cuba, Paraguay and the Dominican Republic. This work is scheduled to start coming June and will last for 12 months.

At the Continent level:

In our Continent, intense work is being done in several countries to establish a roadmap through policies and strategies for the implementation of the Circular Economy both at the country level and in local governments.

For example: the Colombian government launched its National Circular Economy Strategy in May last year, the government of Mexico City presented its Circular Economy Action Plan; Argentina has a National Plan for Waste and Circular Economy; in the case of Uruguay, I am aware that in 2017 a draft Law on Sustainable Circular Economy was introduced to create a National Circular Economy Programme and obviously the BIOVALOR project, implemented with the support of the United Nations Organization for Industrial Development (UNIDO), which has had a great impact not only in Uruguay but region-wide as an example for the dissemination and implementation of the Circular Economy in practice; in Chile I see that they are giving a strong boost to the Circular Economy mainly through what they call the "REP law", which is a standard for waste management, extended producer responsibility, and promotion of recycling, and have created a Circular Economy office that depends on the Ministry of Environment of that country to foster that law and to develop a Circular Economy Roadmap.

In short, while in recent years we are seeing actions to foster the adoption of the Circular Economy in our countries, in general this momentum is very uneven. Some governments are working to create an environment conducive to the implementation of the Circular Economy by generating these laws and strategies that I mentioned before, but much work still needs to be done to unify the concepts of what Circular Economy is; we need to be very careful not to use it as a form of "green washing"; and it is essential to generate sources of funding for companies to move towards circularity and change their business models. It is undeniable that our Continent has a fundamental role to play in achieving a Global Circular Economy.

3. What are the perspectives of the Circular Economy in Paraguay?

My vision, based on the information I know, is that the application of the principles of the Circular Economy is fundamental and strategic for Paraguay. We are taking the first steps in the process of transitioning to circularity and the prospects are very good. Circular ventures and start-ups are already in operation and are changing their business model towards circularity. That’s why we decided to create Kora Paraguay and work hard to let the different sectors know what the Circular Economy is, its principles and its benefits.

4. What do you think could be the possible barriers and challenges to the transition to a Circular Economy in Paraguay and in the Americas?

The 2018 edition of the Circular Economy Forum of the Americas (CEFA2018) was very insightful in this regard, since the central theme was "How to realize the Circular Economy and Sustainability in the Americas?".

Based on what was discussed in this forum, I would say that the main barriers and challenges are:

Political:

• Lack of encouragement and support from governments to drive the transition to the Circular Economy.

• No tax incentives for circular goods and services.

• There are no public offices that encourage, support and boost circular entrepreneurship.

• Lack of laws and regulations that relate to the efficient use of raw materials, and the reduction and disposal of waste in production processes.

Financial:

• Investments for the transition and innovation of already-operational ventures are high, and there is no obligation on the government to support it.

• Lack of alternative financing models for circular businesses.

Technological:

• Absence of industrial symbiosis, companies work individually and do not interrelate to seek cost-effective alternatives for the reuse of waste.

• Lack of technical information to better understand new business models proposed by the Circular Economy and the benefits of their long-term implementation.

Cultural and Educational:

• Dependence on imported products, as we have few local industries to meet the country's needs, especially packaged and electronic products.

• People are used to "BUY" to own a product, not to “USE “them as a service.

• We don't segregate materials. The lack of a selective collection system makes it difficult to recover materials for a new use.

5. Which are the opportunities to develop a Circular Economy in Paraguay and the Americas?

As I had mentioned earlier, if we could change this linear view that every product after its use is NOT garbage, we can see the potential of a Circular Economy (CE).

To see the potential that CE represents in Paraguay, a couple of years ago we produced a statistics on recycled materials based on information from the Ministry of the Environment and Sustainable Development for authorization or permission for the import and export of this type of material. We found out that materials such as aluminum, steel, copper, iron and bronze were recovered at the country level for export, totaling more than 200,000 tons at a value higher than USD 102 million, in just one year and, without counting or having data on the large volume of materials that is recovered and commercialized informally in the local market.

The main markets for these materials (ferrous and non-ferrous metals) are Brazil, China, Spain and India. It is a labor-intensive sector (around 4,500 people in Asunción and the metropolitan area alone), mostly informal, but I think with high growth potential.

In addition, according to the study of the Master Plan of Integral Management of Solid Waste of Asunción and Metropolitan Area developed in 2014 by the consultancy Louis Berger Group-ICASA, in this area only 1.5% of the waste that reaches the landfills is recovered for commercialization, mainly: Paper/Cardboard Plastics, Glass and Metals, Ferrous and Non-Ferrous Metals.

If we do a quick extrapolation, if this 1.5% of recovered materials was sold for more than USD100 million, and we manage to increase the recovery rate to 10%, this could lead us to sell more than USD650 million. Moreover, considering another critical material: organic waste (mainly food waste and plants), which represents approximately 60% of the volume of waste that is sent to landfills. These materials could be reused for instance for energy purposes (electricity generation), this probably will not compete with the price of the energy produced by the Acaray, Yacyretá and Itaipú hydroelectric plants but I do believe that it can be a source of raw material for the generation of Fertilizers, which is among the top 10 items that we import since we are an agricultural country.

Another opportunity for the country is the Waste from Electrical and Electronic Equipment (WEEE), having a look at the reports Sustainable Waste Management of Electrical and Electronic Equipment in Latin America (2015); Electronic Waste Observatory (2017); and, Outlook on waste management in Latin America and the Caribbean (2018), you can see that Paraguay went on to generate 4.9 to 6.8 kg/year of WEEE per capita, between 2014 and 2017.

According to these studies, we are one of the largest generators of WEEE among the countries of Latin America and the Caribbean. But as it represents a serious growing environmental problem, I see this as a great opportunity for Paraguay that we should take advantage of, because according to those reports, globally in 2016, 44.7 million metric tons of waste was generated and this represents a potential value as raw material of about USD60 billion.

If we do a quick calculation, the population of Paraguay as of 2019 is 7,152,703 inhabitants, if each inhabitant generates 6.8 kg/year of WEEE, we would have a total volume of about 49 thousand metric tons/year of WEEE, and if we extrapolate for the potential value as a raw material this volume would represent about USD65 million.

Obviously, this transition is not easy, fast, or a cheap task, and we need to create more efficient and effective mechanisms for segregation at the source, implementation of reverse logistics processes, transforming business models, and generating sources of financing. The good thing is that these and other possibilities are already included in the country presentation "Paraguay – Country of Opportunities" made by the Ministry of Industry and Trade to attract foreign investors as a country for Opportunities in Sustainable Business. While Circular Economy was included in the Energy and Materials strategy, specifically in the Automotive and Appliances sector, it is also directly related to other sectors such as Food (e.g.: Reducing food waste in the supply chain) and Cities (e.g.: Energy efficiency; Reformulation of products; Electric Mobility).

In short, despite Paraguay is only recently starting to support the transition towards a Circular Economy, the Government already sees the potential for the country, and I think these are very good first steps.

6. How can the Circular Economy be enabled in Paraguay and the Americas?

The central purpose of the Circular Economy is to achieve socio-economic and environmental growth decoupled from the extraction of more resources from nature, so it is necessary that all sectors and actors participate, from the government, educational institutions, international cooperation organizations, industry, companies, financial organizations, civil society organizations and society in general.

And from this synergy take actions that lead to:

• Collective awareness on sustainability through education, at home, in schools, universities, where we can foster environmental and circularity culture—to reuse, repair and avoid waste.

• Strengthening technologies for innovation in new business models.

• The creation of a public office to promote, support and co-finance circular ventures.

• Wider local cooperation through industrial symbiosis to reduce the need for virgin raw materials and waste generation, thus closing the material circuit, a fundamental feature of the circular economy to effectively achieve sustainable development.

In particular, a National Solid Waste Plan is being developed in Paraguay, in which it would be interesting if the plan's vision could push production processes to be more efficient in the use of resources and waste generation, and if this Plan could foster increased reuse, recyclability aligned to the principles to the legal framework that regulates the comprehensive management waste.

7. How do you think the Circular Economy Platform of the Americas may be relevant in Paraguay and the continent for the transition to a Circular Economy?

The platform should be an international mechanism to support the countries of the continent by communicating, promoting sustainable policies and the efficient use of resources, also which enables knowledge and experience exchange with different circular economy experts, in order to strengthen networks with these countries and cooperate to achieve the transition to a circular economy in the region.