Dutch Trade Office: Taiwan Must Act Now to Build a Circular Future

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Why you need to know

Taiwan must move on from mere sloganeering when it comes to circular economy and set binding targets to galvanize industry.

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The Netherlands has emerged as a key partner for Taiwan in its efforts to develop a Circular Economy (CE) as part of President Tsai Ing-wen’s (蔡英文) 5+2 Transformation Plan, which encompasses the development of five "pillar industries" – the Internet of Things, biotech, green energy, smart machinery and defense – plus high-value agriculture and CE itself.

The News Lens took the opportunity to sit down with Guy Wittich, Representative at the Netherlands Trade & Investment Office (NTIO), to discover more about the cooperation, and what Taiwan can learn from the Netherlands’ experience in setting ambitious targets, not least achieving transition to a fully circular economy, i.e. one in which 100 percent of resources are reused, by 2050.

To learn more about the CE concept, please see: Tainan’s Student 'Resource Wizards' Tap into the Circular Economy

Key takeaways
  • Taiwan can learn from the Netherlands in setting ambitious, binding targets related to CE
  • CE principles should be required as part of public procurement project tenders to galvanize industry
  • Taiwan must move from national slogans on CE to targeted development of circular industry platforms, starting with easy wins like textiles, high-tech and urban mining
  • Taiwan is in danger of losing out to Singapore and China in the race to become a center of CE excellence
  • Taiwan’s recent flexibility on energy policy is encouraging but crunch time is approaching on implementation of projects like offshore wind
Foto_Guy_Wittich_3
Credit: Netherlands Trade and Investment Office
Netherlands Trade and Investment Office Representative, Guy Wittich

The News Lens: When did the NTIO first enter into cooperation with Taiwan on CE?

Guy Wittich: I met Charles Huang (黃育徽), founder of Taiwan Circular Economy Network (TCEN), in summer 2015 on a flight back from Denmark and the Netherlands, having visited a couple of CE projects and NGOs.

TCEN said let’s do something more concrete, so we signed an MOU and have been working quite closely in the last two years on promoting CE in Taiwan.

We launched a big mission in 2016 with 25 senior government officials including two vice mayors of Taoyuan and commissioners of Kaohsiung and CEOs of major Taiwanese companies to join the Netherlands Circular Hotspot event, a global event where specialists and experts came to listen and learn.

In 2016-17, we organized about 20 or so talks and presentations for local and central governments but also branch organizations, like textile organizations, Taiwan Plastics Associations, so going into industry and hearing what they’ve been doing.

TNL: What’s in it for the Netherlands?

GW: We want to portray ourselves as an innovative country with solutions for the future and we want to share that with Taiwan.

The world is flat. If you talk about CE, you need to cooperate internationally. Taiwan is part of the supply chain for many global products, in plastics but also innovative industries and electronics, Taiwan Semiconductor Manufacturing Co. (TSMC) being a lead example.

We see a quick win here, because the Netherlands and Taiwan have very similar economies. Similar size, lack of natural resources, and a similar sense of urgency over lack of space – how do we deal with our waste materials? You have to find innovative solutions and change that waste into resources.

There is something in it for Dutch companies because many are already providing solutions and have found a niche in turning waste into materials. Some are startups and some are now mid-sized companies that are doing very well in providing solutions for companies that want to be part of the CE movement.

TNL: Can you give an example of that success?

GW: There is a building in Amsterdam that was finished last year called Circl. It’s a project by ABN AMRO, a Dutch bank, and it’s a showcase of how to use circularity in buildings. There are so many different companies involved in the suppliers and new companies that have found a niche in the CE model. (Dutch company) New Horizon are specialized in re-using fittings in old buildings, re-processing them into fittings that are allowed under the latest building standards to be used in new buildings.

So we moved from presentations, missions and doing work with local governments to try to come to real projects here. There could be Dutch companies involved or we [could be] involved as an office, that’s as much as we can do. We don’t own CE but we’ve been working hard to try and maximize the Dutch contribution.

Circl
Credit: Circle Economy/ABN AMRO
The Circl building in Amsterdam helped galvanize architects and industry to move towards CE

TNL: The Netherlands has ambitious targets to reduce the use of raw materials like minerals, fossil-based fuels and metals by 50 percent by 2030 and to achieve a full CE by 2050. How do you assess them?

GW: I think they are very hard to attain. Realistically, we are not going to be at 100 percent. But it’s always good to have targets. If you set ambitious targets, you need to have a plan to make it happen, and if that plan is in place you are going in the right direction. If you get to to 70, 80, 90 percent – you need to change mindsets and a lot of other things and that needs to take place right now. It really doesn’t matter where you end up, if you get to 80 percent you have been successful. If you are still at 30 percent in 2050 something is wrong.

It’s also why we as an office have been encouraging Taiwan to come out and set targets, because if you don’t have targets you never come to an ambitious agenda.

TNL: Looking back at the education you have been doing as an office, what has been the reaction from Taiwanese stakeholders – how familiar are they with the CE concept?

GW: There has been an evolution in the last two years. In the beginning people were not entirely sure and there was a lot of misconception that CE equals recycling. Yes, recycling is an important part of it, but it’s not the same. So the reaction was – we are already doing a lot of recycling [but] now see if you can expand that into a circular scheme.

TNL: Which industries have you seen respond most quickly?

GW: Textiles - Singtex you see making fabric out of coffee waste and we also have some interest from hi-tech, but that’s on the chemical side and waste water treatment – there are a lot of gains to be made. Design companies of furniture and household goods – a lot is happening in Taiwan. Recycling of glass has been done for ages and is not that difficult, so that’s an area you can see big wins.

Urban mining is a new frontier. We have a project starting in the fall at the Taichung Flower Expo and we have launched a briefing among local and Dutch architects to come up with a design for a green building based on circular building concept.

More could happen in Taiwan at a government level in circular procurement. The government has a lot of plans to build new buildings and that is an opportunity to require circular building.

TNL: Is there any element of that in the Forward-Looking Infrastructure Development Plan that mandates circularity in projects built with the NT$420 billion (US$13.7 billion) earmarked to be spent over the next four years?

GW: Not that I’m aware of.

It would be great if we could see more of these large public procurement projects be based on circular procurement. It could really accelerate the transition into CE. The government can play a role and also it would stimulate industry to start thinking about circular solutions. That’s why the [Taichung Flower Expo] project is exciting, because there is a budget and circularity is number one.

That’s a start for making the architectural world excited and having an opportunity to ask questions about CE. One of the key things we want to adopt is to go to materials suppliers and say, listen, we don’t want to buy your materials, we want to borrow them. Of course, they will want to know for how long. So it’s not that easy. You have to think outside the box.

TNL: You mentioned borrowing materials as a business model – Philips has pioneered this with lighting?

GW: In the Philips model, they are not selling lightbulbs. They remain the owner of the material of the lightbulb. Yes, maybe [the customer] has to pay an annual fee to use the materials, not just lighting, but, say, steel beams.

Another concept is database materials. This is being promoted on a European level: Buildings As Materials Banks (BAMB). It’s a concept of all materials being used in a building or on a building site being registered, so you know how old they are or where they were sourced from. You need to know the details: say when it comes to metal fatigue, you don’t want to use something [you are unsure of] and then start re-using it in airplanes…

More and more architects in Europe are starting to use this concept – seeing a building as a depot of materials.

We are bringing the Mayor of Taipei Ko Wen-je (柯文哲) to the Circl building in Amsterdam as an eye-opener – to say, "next time you [commission] a public building, in the tender requirements why don’t you have the building be a circular building?"

Construction_Circle
Credit: Circle Economy / ABN AMRO
A map of the CE value chain.

TNL: There is supposed to be a Circular Industrial Park being built near Kaohsiung, do you have any update on that park's progress?

GW: No, we are keen to know more because we can share expertise in that area, as with [the planned green technology park] in Shalun, near Tainan.

TNL: And then there is the plan to incorporate CE into the ongoing development of Taoyuan Airport …

GW: I gave a speech last year, all the big shots were there and I was able to talk about circularity at Amsterdam Schiphol Airport. After the dinner I sat next to the host, the CEO of Taoyuan Airport, and I did not get the impression that he feels this is something that he can apply.

It’s definitely something Taiwan should work on sooner or later but if they don’t see it…

TNL: Becoming a hub for CE in Asia is something that was raised in a recent Environmental Protection Administration quarterly bulletin. Is there a danger of overshooting the CE idea?

GW: The issue is that you can only start doing this by actually doing it. If you incorporate this in your public procurement, then you would stimulate and accelerate industry to make the change. If you have requirements to build circular, you have to adapt: suppliers, governments, solutions providers.

The building in Amsterdam is the result of a change that happened years ago and new startups have implemented new business models, taking the ducts out of old buildings as the example, and that company now has a new business model. It’s creating new jobs, it will make young people enthusiastic about the economy and maybe they won’t want to leave for Shanghai or New York because Taiwan is at the forefront of a new economic model. It’s important for new jobs. If you do all that then the EPA can claim it’s a hub. In Dutch we say, "don’t put the horse behind the cart."

TNL: How does Taiwan compare with other Asian economies in the CE field?

GW: Other economies around Asia are going quickly. Singapore has portrayed itself as the CE hub in Asia, and the Netherlands now sees Singapore as their hub for CE in Asia. There's a need to have a regional hub, maybe not for Singapore itself. Singapore is building its name there and a lot is happening in Guangdong Province in southern China. There is a park being developed in the Zhuhai Gaolan port economic development area.

Taiwan needs to move fast. You can’t just have slogans. I’ve seen a willingness on a political level and it’s now a question of how to organize. One of the suggestions that we have made is to set up institutionalized platforms, not just ad hoc NGOs, with direct backing from local centers or central government depending on where the platform is. [These would be] backed by industry, where you have government, industry organizations, industry itself, and academics sitting together and hammering out a workable plan for how to transform a particular industry to circular over the next few years.

Don’t do it for all industries, go for the quick wins: textiles, hi-tech and concentrate on those and give them government backing and have them sign a national raw materials agreement in which you outline how we are going to get to 50 percent or 100 percent circular for your own industry. Break your national goals into industry goals. You have to start making people get together to start working on it, not just having the government setting a goal as no one will follow it.

TNL: Taiwan’s never been the best at creating those kind of hubs for industry, academia and government to work together...

GW: Those kind of platforms where you get those three or four parties together and work together is not something where Taiwan has been that strong. We in the Netherlands, we had to work like this because we had these huge disasters in the Netherlands and we had these huge [flooding] disasters [in the 1950s] and we had to build the Delta Works series of dykes. We had to have an egalitarian society where a lot of people had to work together whether you are a duke or a farmer. This could work in Taiwan.

TNL: Taiwan is a key supplier to many global brands, and some under the RE100 list are committed to moving to 100 percent renewable targets. That is surely a motivator for Taiwan not just in moving towards CE but also in liberalizing its energy market. How do you feel about the way Taiwan is communicating its energy policy and its commitment to 20 percent renewables by 2025?

GW: This is an ambitious target and that’s fine. The question is how to get there? What I’ve seen in the last six months is some readjustments in strategy. Though there are worries, the positive thing is that there have been adjustments. Two years ago we thought – great – because we have some solutions for you and we signed an MOU with the Bureau of Energy in September 2015 with the intention for close cooperation on technology and other areas in order for Taiwan to achieve those ambitious targets.

In the Netherlands, we have said we are going to have no coal fired power by 2030. Have we thought about all the details? I am sure we haven’t. I know that there are two new plants in the northern part of the Netherlands built by RWE, a German company, what are we going to do? There are going to be some issues.

I attended one of these conferences on offshore wind in Taiwan, and one of the issues was: How are we going to find all the people in Taiwan to man all the support vessels that have to maintain those 800 offshore turbines. Where are we going to build the ships and train the people? There are tons of executions that need to be handled.

TNL: What most concerns you about progress in Taiwan?

GW: What I’m concerned about as the representative of Dutch industry is whether the government shows continued commitment to its original objectives. Is it worth a Dutch company freeing capacity in jack-up vessels, heavy lifting equipment from around the world to bring it to Taiwan for three months? It would be a pity if there was a gap in that utilization if that work was delayed or even cancelled. It’s important that there is assurance from the Taiwanese government that the plans are still in place. That’s the question I get: Is this now for real? I think it’s for real but it’s a completely new industry and they don’t know how to get there, like it is for most countries around the world apart from those in NW Europe.

TNL: Can you can give an example of how the government has adjusted?

GW: The decision to actually investigate how we are going to get there and look at the whole energy mix. They have also opened up much more than I anticipated to international developers and that’s positive.

TNL: Have there been any efforts from the Taiwan side to secure technology transfers from the international development partners?

GW: There are three different kinds of technology transfer. One is you buy a research project. A Dutch company, ECN (Energy Research Centre of the Netherlands) will be working with the government on sharing knowhow and technology on operations and maintenance of wind turbines. It’s an R&D project. The other way is to work with overseas companies that have the tech. I know some Dutch companies are quite willing to share, to talk about joint venture, local production with Taiwanese companies, Many of the Dutch that I talk to want to build the equipment and ship it here.

If you rent a ship to install a turbine, that’s a service. You can also buy training for staff, that’s an area that will be increasingly important as the deadlines near. The Taiwanese are worried about whether we will be ready. Once you start flying people the costs can explode.

TNL: What’s your sense of the timeline for the development offshore wind?

GW: I'm not sure. Discussing this with people from industry, they are worried about the timeline. They are looking ahead four years and there is increasing worry. But the deadlines are not the most important part: it’s the capacity and getting how to do it. There are problems with some of the tenders, the prices being too low. but I have seen some flexibility in the last two years [and] I get the impression that Taiwan is serious about this and this is a great opportunity for Dutch and other foreign companies.

TNL: That’s obviously a pressure on you in your role, to reassure industry that Taiwan will follow through?

GW: Yes, but I’ve been in Taiwan a long time, and was head of the European Chamber for eight years. So I know the issues. This time around I felt more comfortable. I felt a change of winds and a more positive approach. Problems that members of the chamber experienced in the past, I don’t see them. I see strong urgency and willingness to make it happen.

TNL: What other areas of business and trade is the NTIO working in at the moment?

GW: Taiwan’s water conservation agency came to us last year and said we have budget and pressing issues. We mobilized Dutch companies and research institutes to come to Taiwan. The major issues are flood prevention, water reservoir dredging to get rid of all the residue because they are not being utilized at capacity. At least 30 percent is sediment. And water retention in urban areas – Kaohsiung is facing problems. There are some projects coming out of that now. I didn’t expect that as I thought Taiwan had sufficient knowledge but there are always opportunities to work here with Sinotech Engineering Consultants and other big Taiwanese firms. There’s a link between the Dutch and Taiwan on educational aspects of water management so we are seen as a natural partner.

Our hi-tech cooperation is now extending to startups. StartupDelta is designating the Netherlands as a hub for startups and the Dutch government has designated Computex/Innovex, along with CES and Hannover, as among five strategic fairs in the world, so we will be here with a fairly large Dutch delegation of startups. Computex is the only one in Asia – it is seen as a platform for global outreach, and of course Taiwan is a startup manufacturing hub.

Read Next: Germany: Taiwan Must Do More to Communicate Industrial Policy

Editor: Morley J Weston

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