2. Industrial Symbiosis in the Baltic Sea Region

The number of cases of IS and degree of maturity varies significantly across countries and initiatives in the Baltic Sea Region (BSR). Some of the older IS co-operations are Kalundborg Symbiosis in Denmark, Svartsengi Resource Park in Iceland, and Händelö IS in Sweden, established in in 1959, 1976, and in the 1990s respectively. Some of the most common resources exchanged are excess gas or heat, wastewater and biomass, and often they also share infrastructure. Yet, depending on the specific industrial composition of the network, the possibilities for exchange are vast. For instance, sulphur fertiliser, ash, metals, CO2, and so on. These well-known cases have inspired new IS ventures in many regions in varying scale and with different business and institutional arrangements. These have also inspired many projects and policy support mechanisms to foster IS amongst business circles and regional networks.

In some countries, IS has been explicitly promoted nationally, such as the Green Symbiosis programme by the Danish Business Authority and the SITRA National Roadmap for Circular Economy in Finland (Johnsen et al., 2015). The Finnish Industrial Symbiosis model (FISS) is a network created to support coordination efforts, which can be funded by the Ministry of Economic Affairs and Employment of Finland (Järvenpää et al., 2021). On the other hand, in Sweden, Norway and Iceland, the development of IS has taken place in a more bottom-up process and is implicitly supported in a variety of different policy programmes (Johnsen et al., 2015). However, the most decisive efforts have been facilitated by local and regional networks in close co-operation between authorities and universities, cluster associations, green development hubs among others (Moodie et al., 2019). For instance, Sweden is home to a relatively large number of operational IS cases and networks (Mirata 2018) despite lacking a national strategy for IS.

In Baltic countries, different concepts fostering circularity have gained traction in policy and business arenas. Whilst IS has become a popular and commonly used concept in Lithuania, ‘bioeconomy’ or ‘circular economy’ are the preferred terms by authorities in Latvia and Estonia. Besides the influence of EU and internationally funded projects, this may denote a clear difference in the economic structure between the three countries. Lithuania is the most industrialised economy among the three countries, with a significant presence of large-scale manufacturing and processing industries. Estonia and Latvia have a smaller industrial sector where manufacturing and processing industries are not as prominent and tend to be smaller in scale. This partly explains why there are no complex cases of IS in the Baltic states, so far. Yet, many examples of valorisation and closed loop system solutions exist but are more commonly found within individual companies without engaging in co-operation with third actors. This means that companies improve resource efficiency internally by giving side-streams new uses and entering new business areas. The governance and institutional arrangements also play a role, as in the Baltic countries, government functions are significantly more centralised and sub-national government tiers have fewer tools at their disposal to support business and industrial development.

We explore the state of the art in the three Balic States as follows.

Although IS is not entirely new to Estonia, with some ventures dating back to the Soviet era (see Photo 1) residuals from bioresources is still limited (BioBaltic 2022a), occurring sporadically and with a narrow scope across the country. Existing examples include repurposing residual malt from breweries as animal feed and using wood residues from the wood and furniture industries for pellet production. Moreover, there is currently no co-ordinated national strategy or support schemes to foster IS (Interview 1).

Photo 1: Tallinn Fish Farm in the residual warm water from the Baltic Power Plant in 1979. Source: Eesti Teadeteagentuur AS (AIS)

A White Paper on the Circular Economy was published by the Ministry of the Environment and the Environmental Agency in 2022, which sets the vision and developmental goals for circular economy in Estonia. The White Paper identifies key challenges in promoting circular economy in Estonia, including insufficient co-operation among stakeholders, unclear responsibilities, low environmental awareness, a shortage of experts, and a lack of innovative sustainable solutions. It sets out six priorities to promote circular economy, focusing on responsible resource use, sustainable business models, and minimised waste. The paper envisions Estonia as having strong expertise and cross-sector collaboration in circular economy, bolstered by effective digital solutions and comprehensive data monitoring, along with robust national coordination and supportive legal frameworks (Ministry of the Environment of Estonia 2022).

In 2023, the Ministry of Regional Affairs and Agriculture published a National Circular Bioeconomy Roadmap, highlighting IS as a key approach to fostering innovative initiatives and new forms of co-operation (p.9). The roadmap emphasises the need to enhance the valorisation of bio-resources to generate higher added value from biomass. It underscores that “the most efficient valorisation of biomass is achieved not through the perspective of a single company, but through cross-sectoral co-operation among companies and value chains, following the principles of industrial symbiosis and cascading use”. Furthermore, it stresses that the broader development of IS requires systematic coordination and oversight by the state, alongside active participation from primary sector entrepreneurs in establishing new value chains (Ministry of Regional Affairs and Agriculture of Estonia 2023:11).

“Estonia 2035” is a national long-term development strategy adopted by the Riigikogu (the Parliament of Estonia) in 2021. It outlines strategic goals for the state and the people of Estonia until 2035 and identifies the necessary changes to achieve these goals. The strategy aims to integrate circular economy principles, highlighting the need for enterprises to enhance resource efficiency—such as through IS (p. 24). It also points out that resource productivity in Estonia is relatively low (EUR 0.56 per kg in 2017). To address this, the strategy calls for a stronger focus on eco-friendly technologies, sustainable business models, and improved, greener valorisation of local resources and secondary raw materials (Riigikogu 2021:9).

The Estonian Research, Development, Innovation, and Entrepreneurship (RDIE) Strategy identifies the increased valorisation of local resources—including secondary raw materials, waste, and food resources—as one of its five key focus areas (Ministry of Education and Research, 2022). Aligning with this national objective, the Estonian State Forest Management Centre (RMK) has outlined plans in its 2024–2028 development strategy to enhance domestic processing and create higher-value products by promoting the chemical valorisation of local wood (Baltic News 2024).  

Recent efforts to enhance knowledge and awareness of circular economy principles and IS include the “Initiating Industrial Symbiosis in Estonian Counties” programme running throughout 2024. Launched by the Estonian Business Innovation Agency (Enterprise Estonia) and Kredex, and supported by County Development Centres, this initiative seeks to encourage and assist companies in establishing IS networks and foster a culture of co-operation and trust among businesses. It represents an initial step towards identifying potential challenges, including regulatory and logistical issues, to effectively facilitate IS ventures. Included in the initiative, are informational and awareness-raising activities, along with two months of mentorship support for companies committed to “testing potential symbiosis in the regions.” The program targets businesses in Viljandi, Järva, Pärnu, and Harju Counties. A project report, to be published in January 2025, will present an analysis of the enablers, barriers, and motivations for IS. It will also offer recommendations to the government to support and enhance the development of IS across Estonia (Enterprise Estonia 2024).

While no functional examples of IS exist in Estonia today, this report describes a concept for the Estonian Industrial Symbiosis Agropark in section 3.4, which presents valuable insights gained during its development process. Additionally, the Paldiski city region is highlighted as a promising area for future IS initiatives. It is home to Estonia’s first long-duration energy storage system, a 500 MW facility located 750 meters below Paldiski Bay, is set to begin operations in 2029 and aims for commissioning by 2031. This project employs pumped hydro-storage technology adapted to zero terrain, providing affordable and reliable renewable energy and bolstering the electricity grid (Zero Terrain, n.d.). This underground renewable energy storage initiative also includes a port, railroads, wind and solar energy sources, and an LNG terminal. Additionally, the area holds potential for underground data centers, warehouses, and other enterprises.

With roughly 1.3 million inhabitants, Estonia’s small-scale economy is particularly affected by geopolitical tensions, political, and economic instability. At the same time, the country possesses a strong foundation in primary production across its agriculture, forestry, and marine sectors.

Various stakeholders in Estonia are keen to advance these sectors up the value chain into secondary and tertiary production, aiming to generate higher added value from bio-resources. However, despite these efforts, the valorisation of by-products or residuals from these bio-resources is still underdeveloped (BioBaltic 2022a).  This shortfall is partly due to insufficient support for transforming bioresources into higher value-added products. A significant challenge is the fragmented management of biological resources, with responsibilities divided across various ministries, resulting in multiple uncoordinated efforts and strategies (BioBaltic 2022a). Given the limited power and mandate of sub-national authorities, it is crucial for central governments to take on a stronger co-ordinating role and provide financial support to boost know-how and investment in circular business models.

Further challenges to Estonia’s development of innovative bio-based products and IS activities include limited investments in R&D by both private companies and public entities. Additionally, regulatory barriers pose central obstacles to facilitating IS and limit the potential for resource valorisation, as highlighted by interviewees (Interview 1 and Interview 2). For example, high land-use taxes and environmental fees undermine the economic viability of developing large industrial parks. To unlock future opportunities for residue valorisation and enhance IS, Estonia should address challenges related to developing capabilities within the labour market and business community (BioBaltic 2022a).  Moreover, there is a need to increase awareness among businesses about the actual possibilities of IS.

Despite these challenges, there are several positive factors that can drive innovation in Estonia. The country boasts a robust startup community and strong consumer support for local products, which are crucial for fostering a vibrant innovation ecosystem. Furthermore, cultivating a shared understanding of IS, its opportunities, challenges, and regulatory obstacles is an important step in fostering effective discussions, encouraging collaborative efforts and promoting the advancement of IS in Estonia (Interview 1).

The term 'industrial symbiosis' is used by a select group of experts in Latvia who are involved in EU-funded projects related to this topic. The term is not widely used in business circles, however. IS is translated to Latvian in two different ways: 'industriālā simbioze' and 'rūpnieciskā simbioze' but is rare to find either of them in academic publications in relation to Latvia. However, this does not mean that IS does not exist in the country, but rather that other terminology is used, such as waste utilisation or valorisation of side-streams. The most suitable point of entry for discovering IS in Latvia would be the LIFE "Waste to Resources IP" project, which was initiated in 2022 by the Ministry of Environmental Protection and Regional Development of Latvia (now the Ministry of Smart Administration and Regional Development) and overtaken by newly established Ministry of Climate and Energy in 2023 (Interview 4). The project unites 22 partners and has established a platform called 'Sinergia' with the goal of fostering IS in Latvia.

https://sinergia.lv/, last retrieved on 09.12.2024

The platform offers opportunities networking, workshops, support for resource mapping, and technical expertise, helping businesses identify synergies that align with EU policies. It also focuses on reducing waste generation and promoting circular economy principles in line with the National Waste Management Plan 2021-2028. The project encourages IS via increasing and innovative technologies to transform waste from one company into valuable raw materials for another. The project supports eco-innovation and provides opportunities for start-ups, SMEs, and larger enterprises to enhance resource sustainability and waste reduction (Par projektu - Sinergia, 2023).

The Circular Economy Roadmap (CE Roadmap – published in 2024) provides strategies for optimising resource utilisation and reflects the transition from a linear consumption model, characterised by the 'take, make, dispose' approach, to a circular economy, where product and material value is preserved. The approach is phased and provides practical examples for the public, private and non-governmental sectors. These examples are largely based on the results of the LIFE project, 'From Waste to Resources'. Moreover, the CE Roadmap offers insight into the present state of material consumption and productivity in Latvia. While Latvia's domestic material consumption per capita was 14.8 tons in 2022, which aligns with the EU average, its resource productivity remained low, fluctuating around 0.9 EUR/kg compared to the EU average of 2 EUR/kg (CE Roadmap, 2024). This indicated inefficient use of natural resources in the economy and the lack of de-coupling between material consumption and economic growth.

The National Development Plan (NAP) of Latvia places considerable emphasis on economic transformation through the implementation of the “EU Green Deal,” which advocates for the advancement of circular economy principles across manufacturing and service sectors. The objectives set out in the NAP are to facilitate the adoption of eco-efficient technologies, eco-design practices and intersectoral IS, with a particular focus on the regional level. While the NAP indicates some funding from the Cohesion Fund earmarked for the implementation of IS at the regional level under the support scheme "Local Government Development for Business Promotion", with the aim of developing a regional symbiosis model (Action Plan to CE, 2020), field experts mention that there has been no budget funding to advance green deal in IS area (Interview 4).

Despite the lack of explicit IS pilots in Latvia, research shows that while valorisation in Latvia often occur in isolation, some by-product exchanges could be considered examples of 'industrial synergies', especially in the forestry and food sectors. Rosa & Beloborodko (2015) define ‘industrial synergy’ as industrial by-product exchange between any two companies in contrast to more complex networks of industrial collaboration regarded as “industrial symbiosis”. Almost 10 years after that study, similar examples are listed on the 'Sinergia' homepage, focusing on the reuse of brewers' spent grains (BSG) by the regional brewery Valmiermuiža. The brewery produces about 500 kg of BSG for every 2,000 litres of beer brewed. To minimise waste, the brewery donates the spent grains to local farmers, such as the 'Zilūži' farm, as animal feed, which increases milk production due to its high protein content. Some brewer's grains are also used in unique products such as "drabiņu cepumi" (brewer's grains biscuits) made by a local bakery (Existing Symbiosis, 2023). Apart from this example, other listed cases by Sinergia are more focused on biogas production. However, most of these activities take place within individual companies, without much involvement of external stakeholders, and thus do not fall under the definition of IS. This confirms previous research showing a quest from companies towards increased valorisation of side-streams, but so far this occurs with little or no co-operation with entities outside their own structures. However, the example of Balticovo (Box 1) shows how initial steps towards valorisation can lead to more advanced initiatives involving other players along the value chain.

 

Furthermore, a particularly interesting development from a governance perspective at the sub-national level is the Vidzeme bioregion. We delve more as follows.  

Vidzeme Bioregion is a collaborative governance initiative bringing multiple stakeholders together under the common goal of setting the region towards a development path based on the use and valorisation of bio-based resources. The ‘bioregion’ was established in October 2023, in Sigulda during the International Bioregion Forum, when attendants were invited to sign the Bioregion’s Memorandum of Good Will (see Photo 2).

 

Photo 2: Public signing of Vidzeme Bioregion Memorandum of Good Will in Sigulda, 25^th October, 2023. Source: https://www.vidzeme.lv/bioregiona-forums-saved-kopa-uznemejus-un-petniecibas-institucijas/

The establishment of the Vidzeme Bioregion is unique for Latvia, as it illustrates an unprecedented level of co-operation among diverse partners. The Bioregion's Memorandum of Good Will includes six principles and eight priority action areas aimed at promoting organic food production and consumption in the region, ensuring nature conservation and restoration, reducing waste in households and businesses, promoting a circular local economy, encouraging the transition to renewable energy, supporting the sustainable use of natural resources and cultural heritage, and developing tourism that offers an authentic experience. It was signed in 2023 by 13 founding partners from different sectors, including the local governments of the Vidzeme region (Cēsis, Sigulda, Valmiera, and Saulkrasti), environmental protection, education, agriculture, tourism and waste management (Founding Vidzeme Bioregion, 2023; Interview 5). While Vidzeme bioregion does not explicitly aim for IS, the push for circularity, valorisation and increased co-operation set the foundation for IS to emerge.

In addition, there are a number of initiatives promoting the circular economy in Vidzeme region. One example is the LIFE research project, which conducted a resource flow analysis of Cēsis Municipality. The study revealed the urgent need to reduce non-sortable and non-recyclable waste, particularly by curbing the flow of banned chemicals and hazardous materials in supply chains (CE in Cesis Report, 2023). Furthermore, the results show that businesses are calling for better legislation, particularly on recycling construction waste and supporting organic farming to make it more competitive with conventional methods. While the region outperforms the national average in agriculture output, particularly organic farming, there are a number of structural challenges that hinder valorisation and circularity initiatives. Namely, declining population, poor quality infrastructure, limited education opportunities, and lacking platforms for communications between farmers  (CE in Cesis Report, 2023). Despite challenges, the LIFE project identified several companies in Cēsis Municipality that have successfully applied circular economy principles, such as woodworking companies reusing by-products e.g., ash, and organic farming focusing on sustainable practices that are environmentally friendly (CE in Cesis Report, 2023).

Overall, the growing awareness of the importance of circular economy, and the cumulative efforts done via research work (e.g., material flow mapping) and policy work (e.g., mobilising stakeholders from different industries working together) represent substantial foundation for the development of IS in Latvia. Particularly, the Vidzeme bioregion, stands out as a collaborative governance model pulling different stakeholders together under the umbrella of a common development vision (Interview 5).

The advancement of IS in Latvia is contingent upon the expansion of its social capital and the nurturing of trust within society. To progress beyond isolated business activities, closer inter-regional collaboration and a boost of know-how and investment from the national government would be required. So far, specific support for IS development is mostly coming from EU funding programmes – i.e., Sinergia, funded by LIFE "Waste to Resources IP". However, there is no specific support for companies to develop IS. Latvia’s level of industrialisation is relatively low, and thus there are few actors with the capacity to make use of wasted side-streams. Furthermore, there is a lack of a role model for IS in Latvia, which has resulted in a limited understanding of the concept and its practical implications. It is inevitable that IS will grow in line with the maturity and openness of various industries. So far one of the main drivers for change has been the quest for energy independence, rather than a voluntary shift towards a more environment-focused approach. It is therefore probable that lower-level IS cases will develop first, resulting in a resource-to-energy flow development rather than higher added value ventures. Business-science collaborations remain uncommon. Innovative ideas tend to remain locked within the walls of underfunded scientific institutions and applied science universities. However, governance experiments, such as Vidzeme Bioregion, and the increasingly innovative business sector offer a promising outlook for valorisation and IS development in Latvia.

Although, still small, Lithuania is the largest economy in the Baltics. Lithuania's economy is fast-growing, largely linear and characterised by a strong trade profile and specialisation in industrial processes (Lithuania’s Circularity, 2021). Growth, however, varies significantly across industries. The life science sector is among the fastest expanding in Europe. Manufacturing industry, including metalworking, woodworking, and textile production have been present for longer time and are particularly important in south and east regions. Lithuania’s richness in bio-based resources also represents a promising area to increase value added by use of technology and boosting co-operation. However, the missing ingredient is precisely that: co-operation. Nevertheless, fully and partly bio-based manufacturing contributes with over 9% of the national GDP, whereas primary production contributes only with around 3% of GDP (See Figure 2). In terms of circular use of resources, Lithuania ranks amongst the lowest in Europe. According to Eurostat the ‘circular material use rate’ for the period of 2010–2019 in Lithuania is 3,9%, which is well below the 12,4% EU-27 average and the 30% in the Netherlands, the best performer in the bloc (Eurostat in Roadmap for Lithuania’s industrial transition to a Circular Economy 2021).

Figure 2: Bioeconomy and its subsectors' share of Lithuanian GDP. Produced by: Henrietta Nyström (Nordregio), based on data by Vitunskienė et al. (2017). BioBaltic project (2022b).

The most relevant policy effort to support IS is the Roadmap for Lithuania's industrial transition to a Circular Economy

https://mita.lrv.lt/uploads/mita/documents/files/Roadmap_final.pdf

  (2021) developed by the Agency of Science, Innovation and Technology under the Ministry of Agriculture. The roadmap puts substantial emphasis on the need to work along supply chains in a coordinated manner with all relevant stakeholders and the need for application of science and technologies in value creation. The document mentions IS on several occasions and the need to support economic models, monitoring, and funding, however, there is no direct suggestion for how to practically achieve it. The SWOT analysis made in the context of the roadmap pinpoints to the low levels of business participation in R&D, the insufficiently developed platforms for co-operation and coordination and low business participation in associations and alliances (ibid.). All of these are key preconditions for establishing IS initiatives. Yet, the document also points to the opportunities emerging from the increasing demand for ‘sustainable and upcycled, remanufactured products’, which can serve as incentives for Lithuanian industry to invest in circularity. Importantly, the roadmap highlights the importance of leadership in the public sector in driving transition processes, including the decentralisation of a ‘network of circular economy knowledge and competence centres’. Yet, it mostly suggests empowering different players such as education institutes, business associations and other non-governmental organisations, while leaving it unclear what should be the role of local governments. Nevertheless, this highlights the key principles of co-creation that are fundamental for identifying synergies and eventually concrete IS co-operations.

In a more recent effort, the Academy of Agriculture of the Vytautas Magnus University (VDU ŽŪA) together with the Ministry of Agriculture (LR ŽŪM) launched the Lithuanian Bioeconomy HUB. The effort is particularly concerned with enabling co-operation and intersectoral coordination which is needed to boost innovation and value creation in bioeconomy sectors.

Lithuania's National Progress Plan for 2021–2030 has set a strategic goal of raising the circularity index to the EU average of 12.8% by 2025. This will entail improvements in waste recycling and an increase in the use of secondary raw materials for new products. To facilitate recycling, Lithuania plans to reduce regulatory burdens for low-impact recycling activities, waive permit requirements, and provide financial support for innovation in recycling. The National Waste Prevention and Management Plans (NWPMP) sets out the objective of expanding separate biowaste collection by 2024, textile waste by 2025, and furniture by 2026. The plans also place an emphasis on the responsibility of producers in the recycling of textiles and furniture, allocating funding to technology development for substituting natural raw materials with secondary alternatives, with a particular focus on durability, reusability, and recyclability to advance circular economy goals. It is noteworthy that since 2022 50 % of all public procurement in Lithuania is green public procurement (GPP). From 2023 all public procurement have been carried out in accordance with GPP requirements (Lithuania’s CE Profile, 2022).

Lithuania’s country profile of circular economy produced by  European Environmental Agency’s (EEA) lists the following barriers (see Figure 3) for Lithuania to advance in circular economy (Lithuania’s CE Profile, 2022), and those are somewhat similar to bio-based IS related barriers. However, a notable barrier that should be added is the lack of piloting cases, which would showcase the IS benefits to various industries’ players.

Figure 3: Ranking types of barriers to circular economy in Lithuania. Source: (Lithuania’s CE Profile, 2022)

Another key strategic document supporting the CE in Lithuania is the Guidelines for Lithuania's Transition to a Circular Economy by 2035, adopted by the Government of the Republic of Lithuania in 2023. This document establishes a horizontal approach and outlines six key intervention areas: circular industry, circular construction, circular bioeconomy, circular transport, circular waste management, and circular consumption (Ministry of the Environment of the Republic of Lithuania 2023). 

Besides circular economy drivers for bio-based IS in Lithuania, other relevant policy areas boosting it are climate and energy related, as well as bio-economy focused. Thus, the National Climate and Energy Strategic Plan for Lithuania places a strong emphasis on the production of high-value goods using biomass as a priority, in line with the country's broader goals in sustainable resource use and renewable energy. The strategic plans, including the Comprehensive Plan of Lithuania and the National Energy and Climate Action Plan for 2021–2030, have set the objective of increasing biofuel to 9% and biogas to 2% of electricity production by 2030. This will be achieved by shifting towards biomethane in power plants and local biofuels for heating. In the agricultural sector, the objective is to reduce greenhouse gas (GHG) emissions by 9% by 2030. Land-use strategies are in place to increase GHG absorption through afforestation and perennial crop cultivation. Lithuania's Smart Specialisation Strategy provides support for bioeconomy R&D, with a particular focus on sustainable agriculture, renewable energy, and biopharmaceutical innovations. Additional policies, such as the National Energy Independence Strategy, the Regional Policy White Paper, and the government's strategic programmes, serve to reinforce Lithuania's commitment to advancing its bioeconomy through a prism of energy independence and security where the aspiration for energy independence from third countries (especially Russia and Belarus) is the driving force of bioenergy development in Lithuania (Vitunskienė et al., 2023).

The biogas sector in Lithuania has experienced a period of rapid growth, with production increasing by over 25% annually between 2009 and 2018. This growth has been driven primarily by the use of agricultural waste materials such as manure and crop residues. The market is dominated by a number of key players, including UAB Modus Energy, UAB Šilutės Bioenergija, and Ignitis, which are involved in the development of large-scale biogas facilities and biomethane production. Despite this growth, there are still several challenges including limited infrastructure, regulatory barriers and community opposition to new plants. The government has introduced various measures to support investment in biogas, including tax incentives and streamlined permits. Meanwhile, the biofuel sector in Lithuania is focused on biodiesel and bioethanol from crops such as rapeseed and rye (see Table 1), with companies such as BioBaltis and UAB Mestilla leading the way. However, the sector is facing challenges, including a reliance on imported feedstocks and limited advanced biofuel production from agricultural residues and used oils (Vitunskienė et al., 2023).

Table 1: Biogas and biofuel production in Lithuania. Source:(Vitunskienė et al., 2023).

These developments could signal that there are untapped opportunities to develop smaller-scale regional biogas production facilities, based on bio-based IS business model instead of using primary biomass for biofuel or biogas production purposes.

The furniture and wood production industry in Lithuania represent 1.5% of material consumption, 1.2% of GHG emissions, and 5.2% of the country's gross value added (GVA). However, the furniture sector, which generates approximately 90,000 tonnes of wood waste annually and is responsible for about 11% of the country's total wood waste, faces distinctive challenges due to its reliance on a single significant buyer (IKEA). This monopsony relationship requires high standards of environmental performance and process digitisation (using Industry 4.0 technologies), but it can also result in cost pressures and the risk of disinvestment, given IKEA's price-setting power (Lithuania’s Circularity, 2021). So far, IKEA has not made any efforts to initiate IS in Lithuania. Yet, the scale of available side-streams represents an important opportunity to engage the Swedish company to become an important player in increasing circularity in furniture production industry in the Baltics and develop new economic opportunities surrounding the use of side-streams. In addition, there is substantial potential for IS at the micro- and meso-levels, especially within industrial parks (Lithuania’s Circularity, 2021). This indicates a pathway for Lithuania to deepen its circular economy transition across diverse sectors. 

Lithuania has a strong potential for developing a bio-based industrial symbiosis. However, a number of structural challenges are hindering its rapid development. The established bio-based energy sector operates with primary bio-based resources and lacks motivation to invest in upcycling waste streams from multiple industries (mainly forestry and food-related). One reason is that the development of a business model for multiple smaller-scale feedstock deliverables requires significant network development and logistics planning. However, Lithuania's growing dependence on imported biomass could provide an incentive for exploring the use of locally sourced bio-based resources. Despite the country's progress towards green public procurement (GPP), a robust framework to support the creation of IS is lacking. This somewhat explains the passive role of strong regional players piloting IS initiatives. However, the policy context and increased awareness have set a fertile ground for new business ventures in the utilisation of bio-based side-streams. The key governance challenge in the near future will be to boost the conversation and facilitate the co-operation between interested parties.