Case Estonia | Evaluating Transferability of the Digital Marketplace

Author: Margit Kull, PhD Candidate, Editor: Jelizaveta Krenjova-Cepilova, PhD, Researcher & Project Manager / FinEst Centre for Smart Cities, TalTech

In TREASoURcE project we aim to understand if and how the solutions we create can be replicated in and transferred to other countries. In this qualitative study we focused on Estonian stakeholders and conducted a series of semi-structured individual and focus group interviews with various stakeholders. As a result, we present our conclusions on potential transferability of KiertoaSuomesta.fi (CircularFinland) platform to Estonia.

Today, the effective use of side streams from agriculture has been slowed down by challenges related to profitability and logistics. On an individual farm, the quantities of side streams can be small and/or seasonal and suitable buyers cannot be found. To address these challenges and connect supply with demand, the KiertoaSuomesta.fi digital marketplace was created, providing a meeting point for sellers and buyers of these materials to promote their more efficient and sustainable use. Following overview is the short extract from the Project Brief that can be accessed and downloaded in full-length here.

General recommendations on bioeconomy

We hereby present the recommendations that concern the development of the Estonian bioeconomy and are also integral to the adaptation of the digital marketplace to Estonian conditions:

1. In Estonia (and most likely in other EU Member States) there is still a need to clarify the terms ‘waste’, ‘residues’ and ‘by-products’, and to adjust the system of waste codes, particularly regarding sector-specific issues. For instance, digestate from biogas production is classified as a residue from a national perspective, yet as a by-product from the perspective of the biogas producer, who inherently generates it during the production process. However, for the purpose of directing digestate to farmers for utilisation as a soil amendment, it is imperative for them to obtain an environmental permit authorising the use of digestate as a residue. Analogous scenarios with different types of waste exist in other sectors, underscoring the necessity to align definitions with EU climate policy objectives. 
2. Furthermore, as the study demonstrated, it is vital to simplify the application process for waste permits in Estonia. For instance, when a biogas plant needs to promptly utilise waste streams in the production process, such as production waste from the food industry (e.g. yoghurt waste) or low-volume, unstable waste streams (e.g. potatoes) from farmers, an environmental permit has to be applied for. However, the process of obtaining an environmental permit is typically lengthy and entails substantial financial costs. This impedes the utilisation of these residues since their energy value and quality suitability will be diminished if they are stored. 
3. In Estonia, the establishment of industrial symbiosis parks in proximity to biogas facilities throughout the country is recommended. These parks could incorporate a pyrolysis plant, facilitating the refinement of woody biomass (e.g. stumps). Additionally, enterprises capable of sharing locally generated energy, materials and water should be included. 

Required adaptations for Estonian market

Furthermore, our study demonstrated two context-dependent conclusions that may apply only to Estonian target market and that require adaptations of the platform to be replicated in Estonia:

1. The digital marketplace should be prepared to establish cross-connectivity with national systems to ensure that environmental authorisation requirements and sales and purchase rights are met. As environmental permits applied for are registered in a separate database in Estonia, it is envisaged that it would be both possible and necessary to link the same database to the platform. The national data system would facilitate the automatic identification of permits held by both the seller and the buyer, enabling the platform to determine the validity of their placement of waste for sale. In the absence of the relevant permits, the system would automatically block transactions, and, conversely, will allow transactions to proceed if the permits are deemed to be invalid.
2. In Estonia, there is the understanding that the large and main waste streams (manure, silo, etc.) are well-established, and regional biogas plants are involved in these streams. This is primarily due to the high investment required to build a biogas plant. Hence, when it comes to digital marketplace replication in Estonia, the focus is directed towards smaller and less volatile waste flows. Smaller streams are primarily concerned with regions where there are no biogas plants in geographically defined proximity, or waste types that are less generated and of unstable volumes.Consequently, developers of the digital marketplace may face the challenge of managing a reduced volume of waste flows, which can also result in a more limited user base for the platform. This prompts the question of how to ensure the sustainable development of the platform, particularly from a financial perspective.

Opportunities for improvement

Additionally, we present context independent recommendations that could be important to apply irrespective of the target area:

1. The digital marketplace could be prepared to function as an information centre, providing clear and accessible information on recycling opportunities, legislation, regulations, and support measures to both buyers and sellers (similarly to KiertoaSuomesta.fi, which includes a dedicated content hub to share knowledge on circular economy and side streams). Additionally, there is a necessity to identify methods of integrating the platform with R&D institutions to enhance awareness and promote product innovation in the field of waste recycling. 
2. Furthermore, the digital marketplace could be expanded to encompass multiple sectors. For instance, a biogas plant or a farmer is not only dependent on agricultural residues, but also on residues from the food and drink industry. Conversely, agricultural residues are not only used by farms. For instance, the horticultural sector has expressed interest in fertilisers, given the transition in climate policy towards a substantial reduction in peat extraction, which will consequently diminish the availability of peat substrate. Other sectors, such as the chemical industry and those that use agricultural residues, have also expressed interest in fertilisers. 
3. It is vital to simplify and facilitate the usage of the digital marketplace, particularly for waste sellers. Practitioners have noted the extensive use of numerous platforms, which necessitates a substantial time investment. Furthermore, the uploading of images and relevant information may not be feasible or a priority for all potential users, highlighting the importance of integrating automated solutions into workflows to reflect relevant information on the platforms as far as possible, particularly for the purchaser. 
4. Ensuring that the exchanged product has passed the necessary analyses is of particular importance, especially in the case of agricultural residues, where there is a higher risk of transfer of biological hazards in the residue use area. For example, it is important to carry out analyses on silage if it is to be used to feed dairy cattle, to avoid an increase in the incidence of miscarriages. Additionally, the utilisation of municipal sludge for refining is constrained by its chemical compounds. 
5. It is crucial to ensure that comprehensive information is provided on the waste being sold, as practitioners have noted that a general description can act as a barrier to transactions and potentially result in the purchase of substandard or unusable waste. This necessitates ensuring direct contact between the buyer and the seller of the waste
6. Furthermore, it is essential to ensure that the market price of the waste is competitive. The sale of residues is perceived as a means of generating additional income; however, as farmers do not prioritise the sale of residues, they might lack awareness of their actual monetary value. Furthermore, a considerable proportion of waste is seasonal in nature, resulting in significant fluctuations in selling prices from year to year. Consequently, the digital marketplace must ensure a minimum market price that is aligned with the quality and seasonality of the waste being sold. This is necessary to ensure that farmers also derive benefit from the sale of residues, thereby encouraging the increased valorisation of agricultural waste. 

In a nutshell, the digital marketplace developer/owner should consider strategies to ensure a substantial user base, as well as identify potential leaders and financiers for platform development. To mitigate risks, it would be worthwhile to focus on specific and unstable agricultural residues, to extend the use of the platform across different industrial sectors and to ensure a competitive price for the waste streams. From the seller’s point of view, it is important to ensure the ease of use of the digital marketplace and, from the buyer’s point of view, a detailed overview of the residues to be sold. It is also imperative to ensure that the entire process of buying and selling complies with legislation and regulations.