Circular Valley Initiative Aims to Create Global Hotspot to Grow a Circular Economy: Part 1

A team is at work in West Germany to create a circular economy hotspot akin to California’s Silicon Valley. Startups with innovative ideas, established companies the likes of Bayer, and other stakeholders wanting to advance circularity physically convene in this booming region to both gain and give insight.

Part 1 of this series looks at the inner workings of the project, dubbed as the Circular Valley Initiative. Part 2 is the story of a participating startup; it tells where this French company was on its journey when it got involved in the initiative, and where it is now. 

While many players from around the world are rushing to advance a circular economy, they typically work in silos, with no concentrated hot- spot or region to promote circularity.  With that thought, the Circular Valley Initiative launched in 2021 in West Germany’s Greater-Ruhr region to connect the dots.

Spanning seven bordering regions, it’s Europe’s largest metropolitan area, with more than 15 million residents as well as international market leaders from multiple industries along the supply chain, from huge conglomerates like Bayer and chemical company Evonik to midsized players like industrial product manufacturers HUEHOCO and Knipex,

to small, hidden champions. The Greater-Ruhr region also happens to be a major European recycling hub.

The companies, along with the scientific community, policy makers, and startups with novel circular concepts physically convene in this location. Depending on where they stand, they come out looking for circular solutions that will work within their business operations or to pitch ideas that they want to scale.

The backbone of the initiative is the Circular Valley Foundation, which connects all the players. Startups fly in from five continents to participate.

The Foundation runs three activities: informing the public on the need to reduce emissions and on options to accomplish this; recommending sustainability/environmental policies targeting the European Union and Germany; and running a circular economy business accelerator.

Carsten Gerhardt, Circular Valley co-founder, and a management consultant, tells how the initiative started.

“I had taken some of my clients to Silicon Valley [in California] many times so they could understand the digital revolution and see if there were opportunities to develop digital business models in their field or within their own operations.”

He realized through those trips the power of having a physical location where people from varied backgrounds and with different roles, dedicated to a certain topic, can join.

“You can easily and quickly connect with many stakeholders to identify if there are collaboration opportunities without having to fly around the globe to multiple locations,” he says.

Gerhardt recruited colleagues and found other sustainably minded partners who set out to create a similar set up to advance a circular economy, joining diverse partners. Today, CEOs, investors, politicians, scientists, and others provide input to startups who need to know how to interact with all of them, and these diverse groups also gain insight from the startups.

A main focus, especially of the flagship offering—the accelerator—is on facilitating close interaction with established companies that can help innovators scale ideas from pilots to larger production operations.

“We are interested in large-emission streams that can negatively impact the biosphere. With their concepts, young companies are advancing the circular economy and preventing emissions in the order of billions of tons,” Gerhardt says.

Budding entrepreneurs work with partners, gaining general business know-how they need to be able to take off, like securing funding, intellectual property protection, and developing a pitch deck.  Established businesses mentor startups, sharing their challenges and helping them sharpen and tailor their approaches to specific industry needs.

All types of participants join for “DemoDays,” where entrepreneurs present their ideas, network with investors, and follow up with partners they met earlier. At the same time, seasoned companies are introduced to new ideas that they may be able to apply to their business.

Among startup’s stories, one found a way to remove carbon dioxide (CO2) from the air and met up with an operation that burns limestone to tap into a decent-sized source of emissions. Another new company is producing cushioned envelopes from paper pulp and connected with a paper and pulp business to test extrusion technologies to figure out how to scale its alternative to plastic cushioning on existing machinery.

Many of the organizations are equipped with labs and testing sites, negating the need to build up this infrastructure. The Circular Valley Foundation puts up the funding to enable startups to use partners’ facilities.

“That saves us from needing to set up infrastructure ourselves, which we actually could never do,” Gerhardt says.

Partner Bayer is working closely with a Circular Valley startup to pilot a project that involves recycling the corporation’s workwear. The plan is to collect phased-out clothes at its major production sites and to reuse the yarns.

Since the corporation is transitioning to rented workwear, it aims to connect its suppliers with this startup to make sure that what Bayer uses is not increasing the waste stream, says Timo Flessner, global head of API (Active Pharmaceutical Ingredient) Production of Bayer Pharma.

The multinational pharmaceutical and biotech company is also talking to other participating entrepreneurs involved in industrial wastewater treatment and reuse to identify opportunities for further collaborations.

“We aim to establish sustainable production and to transition to circular options that reduce, recycle, reuse, and replace. Circularity is a major driver to reduce our ecological footprint and, thus, a close collaboration with Circular Valley is in line with our ambition.

“We love these opportunities, as well as the roundtables and workshops, to exchange ideas and help startups connect with other partners,” Flessner says.

Many of the startups have received financial support through the program, up to $12 million in one scenario.  And most of them are in continuous interaction with company partners after completing the accelerator program, according to Gerhardt.

Mona Neubaur, deputy prime minister of the State North Rhine-Westphalia and patron of Circular Valley, spoke at DemoDay, telling attendees, "Turning our economic life upside down, transitioning from a line to a circle - that is the task Circular Valley is taking on. The potential that is coming together here is something we can see in many impressive examples today."

Work is ongoing to expand what has grown to a global network of startups spanning five continents, with the idea being to be able to understand businesses’ cultures around the world.

The diverse community built up around Circular Valley is what Gerhardt believes stands out about the initiative.

“Together with all our partners we are compressing years of learning and gaining experience in a three-month window.

That is really what distinguishes us from other accelerators –the broad access to the stakeholder community.

“So, we are not building from scratch. Our partners are giants in their fields. And we have the privilege to stand on their shoulders and make what they have to offer accessible to our startups.”

So far over 70 businesses have completed the accelerator program. The next application period begins May 15, 2023.