One of the specific goals of the Industrial Policy Strategy of Serbia from 2021 to 2030 is to transition from a linear model of industry to a circular one. Considering that our industrial production is based on older technologies, this will be a demanding task, in which the economy will have the support of the state. This is also a demanding job for many other economies
The dominant principle of most economies around the world at present is a linear model that implies the use of resources to produce as many products as possible, with minimal attention paid to the management of waste materials and more efficient use of available resources. “If one is pursuing the objectives of sustainable development and environmental protection, such a system is not viable,” says Anđelka Atanasković, the Minister of Economy in the new Serbian government.
“The circular economy principle is very important for the Serbian economy, but also for all other economies, because the goal is the achieving of sustainable development at the global level. The essence is that the circular model should ensure a high quality of life for people in a healthy natural environment, without this having a negative impact on the decline of production and the profitability of business entities.”
Based on a proposal of the Ministry of Economy, during March this year the Government of Serbia adopted its Industrial Policy Strategy from 2021 to 2030. The general objective of this strategy is to increase the competitiveness of industry, whereas one of the five specific goals is the transformation of industry from a linear to a circular model, which should contribute to achieving the aforementioned general objective.
“Measures and activities from the Action Plan for the implementation of this strategy, which is a circular model intended to push the transition from a linear to a circular model, will consist of promotions and education, as well as the redefining of incentives within existing programmes of the Ministry of Economy for the procurement of production equipment,” says Minister Atanasković. “The aim is to enable the provision of more significant support for the procurement of production equipment which is energy efficient and uses recycled resources. I would like to note that these activities will be coordinated by the Ministry of Economy, with the support of the Centre for Circular Economy at the Chamber of Commerce & Industry of Serbia and the Ministry of Environmental Protection.“
How can a circular economy help to stimulate innovation among businesses?
– The circular economy and innovation are directly linked directly, because the very transition from a linear to a circular model of production implies innovative solutions which will enable stable and profitable business operations, on the one hand, and protect the environment, on the other. Therefore, achieving the objectives of the circular economy is an inextricable part of the innovative approach in all segments of production and services.
Numerous technological challenges exist in production processes and the application of the circular design of products, but also in reusing products which are currently in use. To what extent can a well-developed IT sector help in this domain?
– The IT sector in Serbia has recently been recording excellent results, and it is today recognised as a sector which can provide great assistance in the domain of the circular economy. As I’ve already stated, the transition from a linear model to a circular one implies an innovative approach, and this is where the IT sector comes to the fore.
The Ministry of Economy will support the digital transformation of the economy through promotions and the education of enterprises in the field of digitisation, as well as via direct subsidies
Digital platforms, smart devices, artificial intelligence, the Internet of Things and blockchain technology are already contributing to the development of circular economy. To what extent are these elements of digital transformation presengt in our country?
– One of the priorities of the Government of Serbia is the digital transformation of the economy, and in accordance with this, a series of activities have been undertaken, aimed at the successful implementation of the digitisation process successfully. We have adopted the Strategy for Artificial Intelligence and the Strategy for Smart Specialisation, while the improved digitalisation of industrial production business models is another of the special goals of the Strategy for Industrial Policy. Within the scope of this goal, the Ministry of Economy has prepared a set of measures and activities which will strive to digitally transform the industry and raise its competitiveness to a higher level, through promotions and the education of enterprises in the field of digitisation, but also via direct subsidies to companies traversing the path of digital transformation.
What kind of help do SMEs need in order for them to be able to switch to solutions which conserve resources and enable efficiency in the use of raw materials and energy, while also protecting the environment?
– In order for Serbia to continue its social development and increase its competitiveness on international and European markets, it is essential for us to follow European and global economic trends, including new criteria for competitiveness (type and method of material use, business models, cleaner technologies and innovations, resource and energy efficiency).
In this regard, it is necessary for the SME sector to be provided with a wide array of various financial instruments, which will enable them to access capital in a way and under the conditions that correspond to the current stage of the said company’s development cycle.
Through its SME Support Programme for the Procurement of Equipment and its Programme of Entrepreneurship Encouragement Via Development Projects, the Ministry of Economy provides funds (partly grants and partly favourable loans) for the procurement of machinery and equipment which will improve energy efficiency and the environmental aspects of production.
Support is also provided by international organisations operating in Serbia, so we have the EBRD Support Programme for SME Competitiveness, through which it is possible to introduce standards in the field of environmental protection through loans and grants.
Funds are also available from the EU Programmes. Apart from financial assistance, advisory assistance is also essential and we provide this, among others, through the EBRD Programme of Advisory Services for SMEs.
How well developed is the legal framework regulating this area and how much does it rely on the work of your ministry?
– Through a series of regulating amandments, the European Union has placed a special emphasis on preserving material resources and improving the energy efficiency of industrial capacities, but also on the comprehensive introduction of the circular economy concept. According to the European Union’s new Strategy for Industry, which was adopted in March this year, the circular economy and digitisation will represent the two most important pillars of industrial development. It is necessary to harmonise domestic regulations with EU regulations in the fields of the circular economy and climate change in the forthcoming period. This area is not under the direct jurisdiction of the ministry that I head, but we will provide full support to activities that encourage the process of transforming the economy to a circular model.
We collaborate closely with the CCIS Centre for Circular Economy and the Ministry of Environmental Protection in implementing the new strategy for industrial development
What dilemmas arise when it comes to creating an acceptable system for our companies in terms of preventing the excessive use of resources, increasing the flow of raw materials in circulation and reducing uncontrolled pollution and waste dumping at landfill sites?
– According to the conclusions of the public- private dialogue conducted within the framework of adopting the Industrial Policy Strategy, awareness about the importance of the environment and the fight against climate change in general is still underdeveloped among representatives of industry in our economy. This is especially true in terms of the issues of waste management and the possibilities of using waste as a raw material in industrial processes. Industrial production in the country is predominantly based on older techniques which are among major environmental polluters and greenhouse gas emitters. Such technologies are associated with higher energy consumption and waste production per unit of product, with significant losses incurred in material flows.
A low level of the treatment of waste and wastewater has also been identified among individual industrial companies in the country. The potential of renewable energy sources is also insufficiently utilised. Producing energy from renewable resources requires additional investment, which makes it more expensive compared to the use of conventional fuels. Likewise, there is also insufficient use of energy from renewable sources among industrial companies in the country, due to their insufficient financial strength or awareness.
In accordance with the aforementioned, the state needs a clear strategic direction to transform the economic model towards the circular economy and reducing greenhouse gas emissions, and the sectors identified as having the greatest potential for applying the circular economy concept in our country include the food industry, construction, the wood industry as well as primary agriculture.
In which ways is your ministry involved in cross-sector cooperation to address these issues?
– The actual Industrial Policy Strategy from 2021 to 2030 itself, presents a document which included the participation of a large number of ministries, bodies and institutions in its development and in the implementation of measures and activities included in the Action Plan. This process is also conceived as a continuous dialogue with the economy, i.e. with all stakeholders. The process began with the holding of public-private dialogues during the drafting of the Strategy, then continued with further dialogue with the economy and public debate, while the plan is for dialogue to continue following the adoption of the Action Plan and its implementation, with the aim of improving evaluations and possibly correcting and supplementing measures and activities undertaken from the Action Plan. Thus, there is intensive cooperation with the Ministry of Environmental Protection and the Centre for Circular Economy of the Chamber of Commerce & Industry of Serbia, through activities in the implementation of the mentioned strategy of the Ministry of Economy, but also through the development of the Programme for the Circular Economy, which will be adopted next year by the Ministry of Environmental Protection.
The Ministry of Economy provides funds for the procurement of machinery and equipment which will improve energy efficiency and the environmental aspects of production
The state needs a clear strategic direction to transform the economic model towards the circular economy and reduction of greenhouse gas emissions
The essence is that the circular model ensures a high quality of life, without this having a negative impact on production and profitability for businesses