Denmark: Scaling Circular Economy Niches to National Norms

Photo by Honbike on Unsplash

Denmark is a pioneer in experimenting with circular economy practices, with its municipalities piloting several initiatives in waste management, construction, procurement and packaging. These pilots have generated crucial insights in the technical, social, environmental and economic aspects of circularity. However, it is the national government that has the authority to decide on whether to adopt such insights into national practice, through financing, standardisation and forward-thinking policy integration.

Denmark shows just how many of its municipal pilots contribute to national policy-making. The country also demonstrates that scaling circular economy niches requires a combination of strong national policies, clear standards, and strategic financing measures, as well as systemic change across governance levels.

Municipality Pilots

Municipal pilots serve as essential learning environments and demonstration sites, producing data that reduces uncertainty for policymakers.

The textile waste pilot in Rødovre Municipality, conducted with Vestforbrændingen and Roskilde University, assessed the quality and quantities of household waste textiles through the collection and recycling of waste textiles. This municipal activity aligns with a national initiative implemented in 2023, the mandatory door-to-door collection of household textile waste in all municipalities, to maximise the impact on recycling. Denmark decided to implement this initiative ahead of the EU Waste Framework Directive requirement for 2025. This local pilot illustrates how evidence can accelerate EU compliance.

In construction, the Island of Bornholm tested selective demolition, and it developed green construction practices through a municipal demolition fund in collaboration with the waste sector, institutions, citizens, and the construction industry. The results informed national requirements applied from 1 July 2024, mandating the selective demolition of buildings of 250m² or more, with a one-year transition period. Such requirements include resource mapping and competency standards, aligning with the Climate Plan for a Green Waste Sector and Circular Economy policy. This demolition pilot shows how local practice can shape national regulation.

Other pilots are still in progress, but are already shaping national discussions. The municipality of Aarhus collaborated with circular economy experts from TOMRA, cafes, and restaurants on a three-year trial to reduce single-use packaging through a reusable takeaway packaging system, starting with to-go cups.

Even pilots who did not accomplish their goals can still inform policy. For example, the Herning Municipality’s attempt to lease workwear did not result in a leasing model. Despite this, it remains a critical example for the circular green procurement discussions and is often referred to by procurement officers.

These cases are proof that pilots do not end with themselves. They provide evidence, highlight existing barriers and are adopted nationally.

From Evidence to Standards

The evidence from pilots becomes impactful when they are applied to binding standards. Without codification, these pilots risk remaining isolated cases.

The Executive Order on Waste 2022 illustrates this process. Before its adoption, local authorities managed their waste collection schemes, resulting in a fragmented market and poor waste collection solutions. Based on the results of municipal pilots, the order introduced requirements such as mandatory waste pictograms for collection bins, sorting criteria, and door-to-door collection. Where door-to-door collection was not possible, collection points were placed within a short walking distance of households.

Similarly, circular public procurement further provides another example. Danish municipalities encountered challenges in implementing circular public procurement due to a lack of tools and specific criteria. In response, the national government introduced in 2024 requirements for ecolabels in designated categories and the use of Total Cost of Ownership (TCO) where feasible. This addressed local barriers and created a framework for scaling.

Internationally, Amsterdam’s city-wide material flow scan estimated the potential value creation of €85 million per year and 700 jobs in the construction sector. While these were estimates rather than realised outcomes, they encouraged national guidelines for circular construction, including by introducing criteria from its local circular roadmap into systems like BREEAM. Over 70 projects have since been created thanks to Amsterdam’s case. Berlin requires public purchasing offices to apply ecological criteria through procurement acts, while Toronto is implementing the results of its circular economy pilots in city-wide procurement.

As evidenced, pilots highlight opportunities and barriers. But only national standards ensure consistency and widespread adoption.

Funding: A Scaling Mechanism

Scaling circular practices requires more than evidence and standards, it depends on financial mechanisms that make adoption possible. Pilots rely on grants and short-term project funding, but adopting these practices at the national level requires long-term investment. The national government provides funding and resources to advance circular public procurement through municipal and regional pilot projects.

Denmark’s updated Circular Economy Action Plan (2024) allotted €500 million to circular projects in 2025, along with tax breaks for circular startups. This resulted in an increase in green businesses and the adoption of circular models by market actors.

European Union instruments enhance national efforts. The EU Cohesion Policy, for example, funds circular economy initiatives while supporting civil society and entrepreneurial projects.

By mandating TCO in public procurement, Denmark has made circular products with higher initial costs, but lower lifecycle operating costs become more competitive in the long term.

Municipalities create a space for partnerships and networks that connect the local and national levels. The government benefits from this initiative. Initiatives, such as the Partnership for Circular Municipalities (PARCK) and Bornholm’s local green construction network, serve to share knowledge between waste companies, knowledge institutions, and waste companies. Another example is the Capital Region of Denmark, along with other international cities, which are participating in the Circular Cities and Regions Initiative (CCRI). The knowledge-sharing process is crucial for developing policies,

funding, and scaling innovative practices.

It is therefore not just about funding pilots. It is about establishing lasting conditions that allow circular pilots to compete and persist over time. Without this, pilots risk becoming short-lived experiments that are soon forgotten.

Having the right governance model is crucial to ensure successes are applied to national policy. Municipalities are combining multiple modes of governance to influence the transition to a circular economy. Local experiments help national policy understand which governance mode is best for scaling initiatives, thus reinforcing the national commitment to local autonomy in implementation.

Challenges

Although Denmark benefits from municipal pilots’ experiments, there are challenges that prevent the scaling of these pilots into being adopted nationally.

● Regulatory Challenges

Pilots reveal specific regulatory and institutional barriers that restrict the adoption of circular practices. In the construction sector, Danish legislation does not fully incentivise circular practices because regulations prioritise linear models over material reuse and resource efficiency. Amsterdam faces regulatory challenges in setting requirements for construction and demolition projects, and the city appealed to the Crisis and Recovery law to address these difficulties.

In Norway, wastewater reuse pilots at Campus Ås have succeeded in recovering nutrients from wastewater and highlighted potential fertiliser savings, but legislation restrictions remain a challenge. In addition to technological challenges, specific regulatory barriers are based on concerns that wastewater may contain organic pollutants or heavy metals that can pose human health risks via the food chain.

This example shows how strict regulations can be, ultimately reducing the adoption of local innovations and blocking scaling.

To address these obstacles, regulatory support is needed at national and local levels, multi-stakeholder cooperation must be incentivised, and regulatory mechanisms should better coordinate multi-stakeholder efforts to change social practices.

● Weak Evaluation Tools

Developing evaluation tools like Denmark’s GreenReform model helps assess the environmental impact of economic activity, as well as the effects of environmental, energy, and climate policies. However, these tools are limited. Without systematic evaluation, policymakers risk scaling practices that lack adequate evidence for long-term effectiveness.

● Unclear Policy Objectives

Strong political support and commitment, driven by top management, support the successful implementation and scaling of circular practices like circular public procurement. However, policies and strategies lack clear objectives and targets that enact action. There needs to be a focus on the production and implementation of policies that are long-term and have definitive goals.

● Knowledge and Capacity Gaps

Local pilots highlight existing barriers due to a lack of appropriate tools and expertise. For example, difficulties in implementing circular public procurement at the municipal level led to the creation and strengthening of tools like the Total Cost of Ownership (TCO) and mandatory use of ecolabels. Without mechanisms to build capacity and for knowledge sharing, scaling may not be effective.

● Financial Risks

Circular practices often involve initial high costs and risks associated with new circular models. Without supportive instruments like subsidies, procurement reforms, or tax incentives, market actors may not adopt them. There needs to be a financial commitment by national governments as well as targeted economic incentives. These incentives can help overcome challenges and support the longevity of pilot results as national norms by considering financial and human resources, as well as the implementation of circular economy initiatives.

Concluding Thoughts

Denmark’s experience demonstrates that municipal pilots are essential for testing and validating the most effective circular practices. Their broader impact depends on strong national frameworks that actively replicate proven approaches using targeted financial instruments and strict standards. Successful scaling demands regulatory reform, rigorous evaluation tools, clear policy objectives, and enduring financial incentives.

Pilots alone do not drive systemic change. Only when local experiments are systematically incorporated into national governance through binding standards, coordinated policy, and targeted funding do circular economy niches transform into national norms.