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Circular Economy Monitor 2020

Amsterdam aims to be a thriving city for all its residents within the limits of what the planet can sustain. This calls for a major change in the city’s economy and consumption. To achieve this, the City of Amsterdam has set two targets: a 50 per cent reduction in the current use of raw materials by 2030 and being fully circular by 2050. Circular material use is still far from easy to measure. This monitor is therefore designed to outline general material use in Amsterdam and identify the effects this use has on the environment, especially elsewhere in the world.

Key points

  • If the environmental costs were included in the price, materials would have to be 42 per cent more expensive on average.
  • CO2 emissions within Amsterdam have been falling, yet no significant progress has been made in reducing the city’s overall climate footprint, which includes indirect emissions.
  • CO2 emissions are just one of the many environmental impacts cause by materials use, and these impacts vary from one product group to another.
  • Amsterdam’s materials use is not falling rapidly enough to meet the target of a 50 per cent reduction by 2030.
  • Too little information is available to accurately measure the circularity of material flows.

About the methods

The data on material use is based on transport statistics provided by the Central Bureau of Statistics. The eco-costs are calculated using reference products, which are representative of each product group. Both data sets are estimates, because direct information with a high level of detail is not available. The margin of error is significant – the actual impact may be different. The results should be regarded as indicative of the approximate magnitude of the environmental costs and how they relate to each other. For a more detailed review of the methods, see the Technical Document (NE).

The hidden costs of material use

In 2020, approximately €13.4 billion was spent on materials consumption in Amsterdam. This amount includes the total sum of the price of materials, labour and other costs incurred during the extraction and production of materials for the products we use as a city. Environmental- or eco-costs have yet to be incorporated into this expenditure total. These are the costs that would have to be incurred to prevent damage to the environment caused by the extraction, production and transportation of the materials, in order to stay within the planet’s boundaries. Material consumption in 2020 was accompanied by €5.6 billion in eco-costs.

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Price of materials including environmental costs (in billions of euros)

These costs to produce sustainably are not made. Because of this, the higher costs of the actual environmental damage are passed on to ourselves, others, and future generations. If these environmental costs were to be incurred and factored into the price, on average they would make all materials about 42 per cent more expensive. This does not yet include the social costs, i.e. the costs that would have to be incurred to make extraction and production fair and humane.

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Breakdown of material consumption (in billions of euros)

Materials are consumed by households, the public sector, companies that need materials in order to conduct their business operations, as well as companies that provide services (e.g. building contractors). This does not include industry. Households and other consumers (through service companies) are responsible for the largest material consumption through their spending. Households spent €5.4 billion on materials in 2020, primarily on clothing and food. Service companies spent €4.7 billion on materials in 2020, mainly on construction materials. The public sector and business investments were responsible for €3.4 billion in spending, largely on industrial machinery and transport equipment. While a significant amount of money is spent on these product groups, items in this category are expensive. The cost per kilogram is high, and this spend therefore represents a relatively small amount of mass. This is accompanied by relatively low environmental costs (0.6 billion euros). The remainder of the environmental costs (5 billion euros) is split almost evenly between service companies and households.

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Breakdown of environmental costs (in billions of euros)

Environmental impact is often thought of in terms of CO2 emissions and their impact on the climate. While these account for a significant part of the hidden cost of material use, they are not the only factor. CO2 emissions account for approximately 29 per cent of the environmental costs resulting from materials use in Amsterdam. Environmental toxicity (or ecotoxicity) and resource scarcity acount for 27 per cent and 40 per cent, respectively.

Ecotoxicity includes soil contamination from metals mining, water pollution from pesticides, and soil acidification caused by nitrogen fertilisers. Resource scarcity includes depletion of rare earth metals, land use change, and water use. A large contributor to ecotoxicity caused by materials use in Amsterdam is animal-based foods, of which the production causes significant nitrogen emissions. Lastly, the environmental impact of extracting and producing goods also harms human health, for example through airborne particulate matter.

Amsterdam’s climate footprint

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CO2 equivalent emissions in and for Amsterdam

At present, only direct CO2 emissions in the city and CO2 emissions released elsewhere through energy consumption in the city are covered by Amsterdam’s climate programme. These emissions are steadily decreasing. Yet it is also clear that the CO2 emissions due to the extraction, production and transportation of goods consumed in Amsterdam are four times higher than these direct emissions.

This means that at least 78 per cent of Amsterdam’s climate footprint comes from activities elsewhere. The figures also show that these emissions, which occur mainly in production chains far from the city itself, have not structurally decreased. The development of indirect emissions closely follows the trend of economic growth and contraction. As a city, we can influence this trend by consuming fewer new goods which come at a high environmental cost. For example, animal-based food can be replaced by plant-based food, and electronics can be repaired on a larger scale so that they last longer.

Environmental impact

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Total Environmental costs (environmental costs per kilogram x weight)

This figure shows how different types of goods affect the natural world in different ways. The city’s food consumption comes with the highest environmental costs, mainly due to a high degree of ecotoxicity because its production leads to nitrogen or pesticides in soil or water. Another factor is that we simply consume lots of food in Amsterdam. The actual impact of food is likely lower than reported here, though, because some products with relatively low environmental costs (such as wine and beer) are underrepresented in the method (see the Technical Document for details).

Use of petroleum products such as petrol or diesel in the city leads to direct emissions, but also causes resource scarcity as fossil resources are finite. Eco-costs from direct emissions are not included. Electronics and appliances come with high costs for climate footprint and resource scarcity, as they require rare earth metals and their production causes significant CO2 emissions. This group of products is relatively small, but has high eco-costs per kilogram. If we cluster the goods by value chain, Food, Built Environment, and Consumption Goods represent almost three quarters of the eco-costs.

Materials

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Progress towards the 2030 material use target

The amount of new materials needed for Amsterdam’s economy decreased significantly in 2020 compared to the previous year. This decrease was largely due to the closure of the Hemweg 8 coal-fired power plant at the end of 2019, which consumed between 1.0 and 1.8 million tons of coal each year.

Materials use rose in the period up to the end of 2019 and dropped in 2020, in line with the general economic trend. In 2021 the Amsterdam economy has grown despite the Covid pandemic, exceeding its 2019 size. Materials statistics for 2021 are not yet available, and the question is of course whether materials use will follow the same pattern.

Looking at the target of reducing materials use by 50 per cent, in 2020 materials use dipped slightly below the level for reference year 2016. In other words, materials use has hardly decreased over the period 2016-2020. Note: Food and other renewable materials (e.g. wood) do not currently count towards this target. When calculating the environmental impact, however, these materials are included. To hit the target of 50 per cent less new material by 2030, Amsterdam’s materials use needs to fall by an average of 1.1 million tons every year from 2020 onward.

Material flows

Material flows in Amsterdam in 2020 (in billion kilos)

Chart with material flows in Amsterdam in 2020 (in billion kilos)

This is a visual representation of material flows in Amsterdam in 2020. It shows what kind of materials enter and leave the city, and how these materials circulate. Amsterdam imports a relatively large amount of material, and also exports a relatively large amount. A great deal of transhipment and re-exportation takes place through the Port of Amsterdam: 53 per cent of all material entering the city is transported to other destinations from the port. Since transhipment is virtually the only activity connecting this material with Amsterdam, it is not included in this visual representation.

The share of secondary materials in all processed raw materials in Amsterdam was at least 4.3 per cent in 2020. This figure is regarded as an underestimate, as it is based solely on recycled waste streams. Higher-value sources of secondary materials such as direct reuse, repair or refurbishment are still difficult to quantify. In addition, we still have no accurate way to measure the strategies at the top of the R ladder: “refuse” (do not consume) and “reduce” (consume the same with less material). In addition, there is no information about which proportion of imported material is secondary. The percentage of secondary materials in the Dutch economy is estimated at around 16 per cent.