Agency in green path development: Circular bioeconomy in the wastewater sector

ABSTRACT

The mounting pressures of climate change and biodiversity loss require a transition towards more sustainable patterns of production and consumption. Within the bioeconomy, better utilization of natural resources can be achieved by pursuing a circular bioeconomy. In the article the authors study how circular bioeconomy efforts in the Hamar region, Norway, have resulted in green path development. They draw on the trinity of change agency conceptualization to deepen our understanding of how agency over time has resulted in green path upgrading in the region. Through a qualitative study, they provide novel insights into the agency of an inter-municipal water and wastewater company in green path development processes. The authors conclude that a combination of different forms of agency, exercised by different actors, has resulted in what they regard as emerging green path development within the region.

KEYWORDS:

• agency
• circular bioeconomy
• green path development
• wastewater

Introduction

Solving growing environmental problems such as climate change and both nature and biodiversity loss requires transitions towards more sustainable production and consumption patterns. The need to reconfigure the existing production and consumption systems has led to the exploration of novel industrial paradigms, such as circular economy and bioeconomy. Circularity and bioeconomy are often linked to technological and social innovation (Bugge et al. 2019), which opens up opportunities for novel industrial development in regions.

Within the literature on evolutionary economic geography, studying different forms of path development has been a key endeavour (Martin & Sunley 2006; Isaksen 2015; Trippl et al. 2017). Studies of path development entail unboxing how regions can develop new industrial paths (creation), diversify their industries (utilizing existing knowledge and assets in new industries) or renew/upgrade (e.g. implementing new technologies) existing industrial paths. Recent contributions to the literature on path development have called for a better understanding of how these development processes are influenced by agency (Grillitsch & Sotarauta 2020; Jolly et al. 2020; Sotarauta & Grillitsch 2023). In this endeavour, Grillitsch & Sotarauta (2020) have developed the ‘trinity of change agency’ framework. Three forms of agency constitute the trinity of change agency: (1) innovative entrepreneurship (technological innovation), (2) institutional entrepreneurship (institutional change), and (3) place-based leadership (local change agents). The framework has recently been applied in studies of green path development (Sotarauta et al. 2020), which can be understood as path development processes that lead to either greening of existing industries or the establishment of new green industries in a region (Grillitsch & Hansen 2019; Trippl et al. 2020). This literature thus points to investigating the role of actors as change agents in regional development, and how this agency is associated with green path development.

The circular bioeconomy concept is receiving increased attention from policymakers, practitioners, and researchers. At the core of circular bioeconomy (CBE) lies the efficient utilization of renewable biological resources to create economic outputs and contribute to the formation of more sustainable production and consumption patterns. This entails that waste and side streams are treated as resources in the bioeconomy and can contribute to decarbonization beyond the traditional bioindustries (Klitkou et al. 2019; Stegmann et al. 2020), as well as reduced demand for first-use natural resources and land. In other words, circular bioeconomy promotes the utilization of side streams and waste materials from bio-based production as input materials in other production processes.

While there has been substantial attention paid to sustainability transitions in the water and wastewater sector in earlier literature (Larsen et al. 2016), elaborating on, for example, dynamics in sociotechnical regimes (Fuenfschilling & Truffer 2016; van Welie et al. 2019), there has been less explicit attention paid to the development of CBE and related industrial development in this sector (Binz et al. 2016). Meanwhile, the literature on CBE has had the most focus on sectors such as forestry (D'Amato et al. 2022) and agriculture (Tanner & Strøm-Andersen 2019), and less on the water and wastewater sector. However, there is vast potential for material circularity and sustainable value creation from reuse and recovery of biological resources (e.g. phosphorus and biogas) from the wastewater sector. Besides biogas, both phosphorus and nitrogen recovery are at a high technology readiness level, and other resources, such as ammonium sulphate and calcium phosphate, as well as adsorbents, heavy metals, proteins, and enzymes, may be extracted from wastewater and sludge and create value (Guerra-Rodríguez et al. 2020).

The contribution of this article is twofold. First, we contribute to and extend the literature on agency in green path development (Jolly et al. 2020; Trippl et al. 2020; Sotarauta & Grillitsch 2023) by providing new insights into firm-level agency in regions where there is limited interest from system-level actors in promoting green path development. Second, the article contributes new insights into the field of economic geography by shedding light on the agency of quasi-economic actors (e.g. publicly owned enterprises such as inter-municipal companies) in green path development and how these actors pursue CBE in the wastewater sector. Based on an exploratory case study and utilizing interview data, and findings from policy documents, and field observations, we take a longitudinal approach to investigate agency in green path development based on the development of CBE linked to wastewater and waste management in the Hamar region of Innlandet County, Norway. We ask: How can actors foster green path development through pursuing circular bioeconomy? We find that, despite little attention from national and international actors, the efforts of a few key actors within the region to develop CBE in relation to a regional wastewater treatment facility have resulted in green path development. We argue that the combined actions of the four owning municipalities and two inter-municipal companies in the region – respectively established for water and wastewater management and municipal waste management – have been crucial in these developments.

In the next section, we provide a short introduction to the wastewater sector and the concept of circular bioeconomy. Thereafter, we discuss the literature on agency and path development, with particular emphasis on the trinity of change agency, opportunity spaces, firm-level agency, and green path development processes. The methodology section introduces the case study and describes the applied research method and data sources. This is followed by a section in which we analyse how the actions of a few local actors over time have enabled green path development in the Hamar region (‘Circular bioeconomy and green path development in the Hamar region’). Finally, in we present our conclusions and reflections on the implications of our work for practitioners and future research.

The wastewater sector and circular bioeconomy

The wastewater sector is responsible for a number of activities. Traditionally, these activities have ranged from collection and treatment to disposal or reuse of wastewater sludge. As such, the sector delivers essential services to the public to safeguard proper and safe handling of wastewater, which in turn protects the environment on both land and in the sea, as recipients of treated wastewater. Worldwide, the wastewater sector is currently faced with several challenges, such as increased population growth, urbanization, industrialization, and climate change (Guerra-Rodríguez et al. 2020).

In this article, we study the role of agency, particularly that of an inter-municipal¹ water and wastewater company, in promoting green path development in the Hamar region. Therefore, it is necessary to account for the organization of the Norwegian wastewater sector, which has an impact on wastewater companies’ opportunity space (i.e. the industrial, regional, and temporal conditions in which the agency of these companies is exerted) (Grillitsch & Sotarauta 2020). By law, water and wastewater treatment plants (WWTPs) connected to the public grid in Norway are owned by municipalities (Miljøverndepartementet 2012). These treatment plants can either be operated by the municipality administration or by either municipal or inter-municipal companies. Such direct or delegated public management, with varying degrees of privatization of the operations, is the most common form of organization of the sector in Europe. However, delegated private management (where the responsible public entity appoints a private company to manage tasks based on a time-bound contract) and direct private management are also found (EurEau 2018).

In Norway, most municipal and inter-municipal companies are governed by company boards, which in some cases consist of representatives (politicians) elected from the owning municipalities’ municipal councils. In some cases, as in the utility company studied in this article, there is a representative board and a governing board, with members elected based on their knowledge and merits in an industry. The financing of WWTPs and the services they provide are covered through fees paid by the inhabitants, which are regulated by the full cost regulation. The full cost regulation entails that ‘[T]he total full cost of a service shall be equivalent to the additional cost of providing the service’ (Ministry of Local Government and Regional Development 2021). Inter-municipal companies, such as the one studied in this article, are not allowed to make a profit, unlike other companies. All income from municipal fees is to be used on delivering the service, which includes required maintenance and upgrading, by applying the best available technology, and any surpluses should result in a reduction of fees. The repayment of any large investments in facilities is also to be covered by municipal fees. The inter-municipal companies are, as such, both public and private, as they are owned by municipalities, and are obliged to meet economic profitability demands, but are not to generate an economic surplus. Hence, these companies’ motivations for economic gain is to reduce fees for their users. Therefore, we regard them as ‘quasi-economic’ actors.

The wastewater sector is, like all other sectors, faced with policies aiming to promote a circular economy, such as the EU’s revised EU Urban Wastewater Directive (European Commission 2022) and the National strategy for a green circular economy in the Norwegian case (Klima- og miljødepartementet n.d.). Moreover, as publicly owned companies, wastewater utilities can be politically directed to promote local and national goals such as contributing to circular economy (CE) (Christensen 2021). CE opportunities and challenges are already on the agenda (e.g. biogas production is implemented in most of the larger WWTPs in Norway). Phosphorus and nitrogen recovery are at a high technology readiness level, but costs are high and it is challenging to develop a market. As the sector deals with biological resources, the application of the concept of CBE is useful in promoting our understanding of the circular potential of the wastewater sector. In the main section ‘Circular bioeconomy and green path development in the Hamar region’, we shed light on how actors in the Hamar region have pursued CBE, both within the sector and in interaction with other sectors.

Agency in green path development processes

Human agency can be defined as ‘the ability of people to act, usually regarded as emerging from consciously held intentions, and as resulting in observable effects in the human world’ (Gregory et al. 2009, 347). As such, agency refers to actions taken by people or groups of people and the intended and unintended consequences of these actions (Grillitsch & Sotarauta 2020). In this article, we place particular emphasis on the firm-level agency when studying the actions of inter-municipal companies pursuing a circular bioeconomy through resource recovery and valorization, as well as how companies instigate green path development processes within the Hamar region. To develop the analytical framework, we draw on recent contributions in economic geography on green path development and agency in path development processes.

Green path development

The path development literature has been an important strand of literature within evolutionary economic geography. Over time, the literature has evolved from a focus on path dependency, regarding industrial structures and regional conditions as limiting factors and potentially leading to negative ‘lock-ins’ and economic decline, to more open-ended understandings of path development with a ‘path-as-process’ understanding, in which existing structures and knowledge are seen as potential stepping stones for further regional industrial development (Hassink 2005; Martin & Sunley 2006; Steen et al. 2023). Consequently, a regional path can be understood as a trajectory for regional economic development, which is made up of different forms of economic activity (and different sectors) that are to varying degrees underpinned by regional structures (technological, political, financial, educational) that support the existing path/paths (Martin 2010; Martin & Sunley 2006). Following the seminal contribution by Martin & Sunley (2006), who introduced a range of ‘de-locking mechanisms’ that could hinder path dependence, economic geographers have refined and developed several conceptualizations of potential path developments (Hassink et al. 2019). The different forms of path development entail different ways of utilizing existing regional assets and attracting extra-regional resources to promote the upgrading of existing industries (e.g. through the implementation of novel technologies), diversification into new industries (building on the existing resource base to move into novel markets), and creating of new industrial paths (either through importing resources from outside the region or through endogenous developments) (Martin & Sunley 2006; Martin 2010; Trippl et al. 2017). These path development processes are shaped by structural preconditions, such as knowledge and skills, and by the existing institutional structures that have been developed over time to maintain the existing industrial paths (Martin 2010; Hassink et al. 2019; Jolly et al. 2020).

Following the increased academic interest in the geography of sustainability transitions among economic geographers, emphasising how sustainability transitions are ‘constituted spatially’ and distributed across space, shaped by existing technological, industrial, economic, institutional, and social preconditions, a regional focus on such transformation processes is warranted (Hansen & Coenen 2015, 95; Binz et al. 2020). The path development literature has been applied to some extent to address this need for more geographical explanations of green developments, in which an emerging interest in green path development can be observed (Sotarauta et al. 2020; Trippl et al. 2020). Building on the existing conceptualization of path development processes, as described above, Grillitsch & Hansen (2019, 2167) propose four different avenues of green path development. The first is that of path development, which entails continuing to grow existing green industries. Second, path upgrading refers to any ‘major qualitative change of existing industries’ following the introduction of new technologies, organizational forms, or business models. The introduction of green technologies into industries that are ‘dirty’ would, as such, promote green path development. Third, path diversification relates to the development of new green industries based on existing knowledge base and resources. Finally, fourth, path emergence refers to how new industries are created without drawing on existing regional knowledge bases and resources, but rather drawing on extra-regional resources. In the case of green path development in the Hamar region, we apply the typology set out by Grillitsch & Hansen (2019) to analyse in what types of developments the actions of the studied actors result.

Agency in green path development

Agency for green path development can be initiated by both firm-level and system-level actors, and in an interplay between actors on both firm and system level (Isaksen et al. 2019; Trippl et al. 2020). Trippl et al. (2020) describe how firm-level actors can initiate green path development through the development of novel technologies, which in turn are supported by system-level agency (e.g. in the form of the establishment of cluster organizations that underpin the initial firm-level actions). By contrast, system-level actors can influence green path development processes through devising organizational support structures and institutional arrangements that provide, for example, financing of knowledge assets that underpin the development of a green path. In this article, we pay particular attention to firm-level actors, as we find the innovation activities of two inter-municipal companies (although enabled by system-level agency) decisive in the greening of the waste and wastewater sector in the studied region. To refine our conceptualization of agency, we draw on the trinity of change agency approach introduced by Grillitsch & Sotarauta (2020).

With the intention to provide a better understanding of how the actions of and between different economic and non-economic actors produce certain outcomes and regional developments, the economic geography community has devoted much attention to the relationship between agency and structures and how they shape regional development. We employ Grillitsch and Sotarauta’s ‘trinity of change agency’ approach to gain a better understanding of agency perspectives in regional path development in the Hamar region (Grillitsch & Sotarauta 2020). The trinity of change agency is made up of three distinct, yet interlinked, forms of what Grillitsch & Sotarauta (2020, 709) call ‘transformative agency’ (i.e. actions that produce change). The first form of agency is innovative entrepreneurship (Schumpeterian entrepreneurship) and relates to how economic actors, through the recombination of knowledge and resources, promote changes that break with existing paths. Institutional entrepreneurship refers to how individuals or organizations, or groups of individuals or organizations, through purposive action work to change existing institutions. Third, and finally, place-based leadership refers to how leaders, either individual persons or organizations, can mobilize and coordinate the efforts of multiple actors to promote path development in certain regions (Grillitsch & Sotarauta 2020). Grillitsch & Sotarauta (2020) argue that the three forms of agency can be overlapping and interacting in time, where one form of agency can enable or lead to another one. We apply the trinity conceptualization of agency to nuance and explain the different forms of agency expressed by actors within the studied region.

Furthermore, Grillitsch & Sotarauta (2020) introduce the concept of opportunity space for change agency. The opportunity space concept ‘mediates between trinity of change agency and structure’, meaning that it highlights how agency is set within, and conditioned by, certain industrial, regional, and temporal opportunity spaces (Grillitsch & Sotarauta 2020, 714). This entails that actors’ agency is both limited and promoted by industrial and regional structures, which change over time. We regard the notion of opportunity space as an extension of what Martin (2010, 21) refers to as the preformation phase, which accounts for how path creation and development is shaped by ‘pre-existing local economic and technological structures, knowledge and competence’. As such, the opportunity space concept introduces an acknowledgement of how the potential for different forms of agency is shaped by regional structures. It also has a temporal dimension, in that certain points in time enable certain types of agency, due to the convergence of regional resources and perceived opportunities upon which actors act. These points of convergence then result in path development.

In this article, we combine two strands of literature –one on green path development (Grillitsch & Hansen 2019) and one on agency (Grillitsch & Sotarauta’s trinity of change agency apparatus) – to gain a better understanding of how different forms of agency, among different actors at different points in time, have created opportunity spaces wherein green path development has taken place (Grillitsch & Sotarauta 2020). Taking a longitudinal approach, we argue that decisions from past decades have had a formative impact on green path development and that the firm-level agency demonstrated by key regional actors has been enabled by past decisions. Thus, we tap into and provide insight into the ongoing discussion on the relationship between ‘structure and agency’ (Sotarauta & Grillitsch 2023), promoting a view that firm-level agency is essential when there is a lack of structural push for greening of regional economies.

Methodology

The Hamar region

The Hamar region is located north of the capital city Oslo, adjacent to Norway’s largest lake, Mjøsa, and close to the large inland cities of Gjøvik and Lillehammer. Administratively, it falls within the county of Innlandet and includes the four municipalities of Hamar, Ringsaker, Løten, and Stange, which had a total of c.97,000 inhabitants in 2023 (Statistisk sentralbyrå n.d.,a). The bioeconomy is an important part of the industrial structure in the region, as 21.9% of the population worked in the primary industries(c.3%) and secondary industries (c.18.9%) in 2023 (Statistisk sentralbyrå n.d.,b). The inter-municipal water and wastewater company (hereafter referred to as the utility company) is owned by the four municipalities that constitute the Hamar region and is located in the city of Hamar. A second key actor in the story of green path development in Hamar is the inter-municipal waste company (hereafter referred to as the waste company). The waste company is located within Hamar Municipality and provides services for the same four municipalities as the utility company.

Method and data

Due to limited previous research on the agency among public and ‘quasi-economic’ actors in regional path development relating to CBE in the water and wastewater sector, we employed an exploratory case study (Flyvbjerg 2006; Yin 2012) approach to explore this topic, which in our case was a single case. An exploratory case study is useful when studying ‘distinct phenomena characterized by a lack of detailed preliminary research’ (Streb 2010, 372). While ideas concerning recovery of resources and water reuse are well-established in the wastewater sector, CBE is yet an emerging issue in this sector in terms of high-value and innovative products that have potential for regional industrial path development. Similarly, our knowledge of how firm actors work to innovate and develop novel solutions that could promote CBE, and how the CBE is shaped by regional structures, is limited. The inter-municipal companies in the studied region are frontrunners in seeking to foster such activities. Therefore, the region serves as a highly relevant case for the exploration of how firm-level agency can promote green path development.

The study on which this article is based was done as part of the Wider Uptake project (Wider Uptake n.d.), which aims at facilitating a transition to water-smart solutions in the water and wastewater sector, together with partners from various European countries and an African country. During a broader analysis of governance for implementing water-smart solutions in this sector, green path development related to CBE in the Hamar region emerged as a salient topic and this motivated us to contribute this article.

The empirical insights of this article are based on various sources of data, enabling triangulation of findings. First, in the period January 2021 – June 2022, we carried out four semi-structured interviews with key actors in the region who related to the studied case (Table 1), focusing on the governance conditions and the role of the studied utility companies in CBE in the region. Those interviews were recorded. Second, we facilitated three workshops (two physical and one online), with a local community of practice (concerning resource recovery and utilization from wastewater) that included key regional actors, where the introduction of water-smart solutions in the region was discussed in a multidisciplinary setting. Communities of practice are defined as ‘groups of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise in this area by interacting on an ongoing basis’ (Wenger et al. 2002, 4). The participants in the three workshops thus held key knowledge on the matters of resource recovery and utilization, and thus CBE. Extensive notes from both the interviews and the workshops were collected. Third, in addition to the workshops, we took part in three site visits to the utility companies and their partners’ resource recovery facilities under the guidance of key local actors. This enabled further discussions regarding different circular bioeconomy solutions and the processes of regional path development. Finally, we performed an analysis of the key policy developments at national and international levels to contextualize the regional developments. Moreover, we assessed available reports and documents, as well as organizations’ websites to gather further information on the studied activities. We have utilized this data also in earlier publications on the overall governance context, both in the Hamar region and other regions (in Europe and Africa) (Damman et al. 2022a; 2022b).

Table 1. List of informants

Informant	Organization	Interview ID
CEO	Inter-municipal utility company	Interview 1
CEO	Inter-municipal waste company	Interview 2
CEO	Wastewater treatment technology company	Interview 3
Advisor	Innlandet County	Interview 4

We used content analysis of our collected data to answer the research question of the article. The analysis took place in two steps. First, with the help of our primary and secondary data, we established a timeline of key actions related to CBE in the water and wastewater sector that has enabled the emerging green path development in the Hamar region. This included identifying key events in the broader regional context from the 1970s onwards, as well as the specific activities by the utility company and other regional actors, which have been at the core of the developments investigated in this article. Second, we drew upon the trinity of change agency (Grillitsch & Sotarauta 2020) to analyse the roles of the utility company and the waste company in those developments over time. The concepts of innovative Schumpeterian entrepreneurship, institutional entrepreneurship, and place-based leadership were used as codes to make sense of this agency. In the following section, we present the findings from the two analytical steps.

Circular bioeconomy and green path development in the Hamar region

In this section, we summarize the key policy developments in Norway and the European Union and then proceed with an analysis of how, over a longer period, agency has supported and created opportunity spaces for green path development related to the circular bioeconomy in the Hamar region.

Key policy developments in the European Union and Norway

Even though Norway is not a member state, it is strongly influenced by European Union (EU) policymaking through the European Free Trade Agreement (EFTA) and the European Economic Area (EEA). In effect, most EU regulations are implemented in Norway. This includes the current Urban Wastewater Treatment Directive (European Commission 1991). However, the level of compliance as regards wastewater treatment and discharge has been relatively low due to challenges related to geographical conditions and backlogs in infrastructure development and maintenance. Until recently, discharges to sensitive areas had been prioritized, and regional authorities have permitted dispensation from the secondary treatment requirements as a transitional measure in cases where compliance is associated with high costs and non-compliance is associated with limited environmental risk. However, in 2019 the Norwegian Environment Agency announced that it would begin to introduce fines for lack of compliance within a time limit of seven years (VAnytt 2019). Meanwhile, the Proposal for a revised Urban Wastewater Treatment Directive (European Commission 2022) arranges for new, stricter requirements, to protect the environment and health, but also to enable CBE. In terms of fertilizers, the EU’s fertiliser regulation 2019/1009) (European Commission 2019), as the overarching EU legislation for trade in conventional and organic fertilizers, is restrictive when it comes to products from sewage sludge. However, earlier EU organic farming regulations (European Commission 2018) were recently modified in Regulation 2023/121 to authorize ‘Recovered struvite and precipitated phosphate salts’, for use in organic farming certification (European Commission 2023) that in turn had modified Regulation 2021/1165 (European Commission 2021). Meanwhile, the EU’s waste framework directive proposes that reuse and recycling of municipal waste should be increased to a minimum of 55% by weight by 2025, and by 60% and 65% by 2030 and 2035 respectively (European Commission 2008). In sum, EU policies are moving towards encouraging a more circular economy within the wastewater sector but regulatory developments are as yet still underway.

In Norway, unlike in many other European countries, the use of sewage sludge as fertilizers for agriculture is allowed, under certain specified conditions. However, the national regulation on fertilizers of organic origin (Gjødselvareforskriften) has been under revision since 2009 (Helse- og omsorgsdepartementet et al. 2003). This is associated with uncertainty regarding future framework conditions, as some have called for more restrictive rules in line with the EU’s fertiliser regulation 2019/1009 (European Commission 2019), while others suggest that organic fertilizers based on sewage sludge should be further encouraged. In the Norwegian government’s National strategy for a green circular economy (Klima- og miljødepartementet n.d.) it is outlined that the state will actively develop framework conditions for circular economy in the country. The strategy also highlights the role of regional authorities in facilitating local action. However, circularity in the wastewater sector is not mentioned as a priority area. Meanwhile, the Norwegian government seeks to cut its climate gas emissions by 55% by 2030 and by up to 95% by 2050. In addition to being part of the European Emissions Trading System (European Commission 2003), Norway has a carbon tax, which increases over time, acting as a key instrument motivating industries to, for example, replace fossil fuels with biogas and other renewable alternatives. However, in the transport sector for example, the strong Norwegian policies favouring electrification and hydrogen have contributed to crowding out biogas as a low-emission solution (Bach et al. 2021).

Overall, neither increased resource recovery from the wastewater sector nor market creation for those resources has been a priority area for policy. Biogas production has, however, been prioritized nationally when national guidelines and support schemes have been developed (Miljødirektoratet 2023; ENOVA n.d.). Nationally, the attention to better environmental performance has rather focused on, for example, enforcing the existing EU regulations regarding wastewater discharge. Despite this limited push from policymakers on resource recovery, circular bioeconomy has long roots in the Hamar region, warranting attention to explore further the agency behind such developments.

Circular bioeconomy and green path development in the Hamar region

A legacy of environmental awareness and action

The very beginning of the green path development process that we discuss in this section can be traced back to the 1970s and the Norwegian government’s Mjøsa Campaign (Miljøverndepartementet 1979). At the time, Mjøsa – Norway’s largest lake and a crucial drinking water source for 55,000 inhabitants – experienced a massive growth of blue-green algae due to phosphorous pollution from surrounding industry, agriculture, and municipalities (Miljøverndepartementet 1979). In the late 1970s, the situation was severe, resulting in deteriorating drinking water quality and the risk of long-term degradation of Mjøsa. The Mjøsa Campaign was initiated by the Norwegian government to reduce phosphorous pollution from the surrounding areas from 400 tonnes per year in 1976 to 175 tonnes per year by 1979. The campaign was ultimately a success, the lake was saved and measures put in place during the campaign were used as inspiration for other areas struggling with similar challenges, both nationally and internationally (Miljøverndepartementet 1979). Furthermore, and of key importance for this article, the Mjøsa Campaign instilled an environmental awareness in the municipalities surrounding the lake, including their inhabitants, that can still be observed today. Additionally, the governmental funding from the Mjøsa Campaign resulted in the establishment of the utility company and the building of the first wastewater treatment plant (WWTP).

The Mjøsa Campaign, the experiences and the knowledge developed on how to prevent phosphorous pollution, along with the establishment of the WWTP, and subsequently the water and wastewater company, are important elements of what Martin (2010) refers to as the preformation phase of path development processes. The preformation phase constitutes the ‘inherited conditions’ (i.e. the pre-existing economic and technological structures, knowledge, and competencies that shape the environment in which change agents operate) (Martin 2010; Grillitsch & Sotarauta 2020). The importance of the Mjøsa Campaign on more recent developments was evident from the former CEO of the utility company, who explained that the company’s innovation activities, which promote a circular bioeconomy today, could be traced back to the Mjøsa Campaign (Interview 1).

Innovation and diversification in the wastewater sector

At the core of the circular bioeconomy concept lies a better utilization of biological resources. In Norway, and in most other countries where there is existing sewage infrastructure and centralized wastewater treatment plants, resources that are found in wastewater and sewage sludge are currently underutilized (Lehtoranta et al. 2022). The key actions and events – both technological and institutional character – in the history of the utility company that have enabled green path development in the Hamar region are listed in Table 2. As it falls outside the limits of this article to delve into detail for all of these actions, this section is structured around four key events where we find that the agency of the actors studied here shapes the future green path developments. These events are related to biogas production, the establishment of the inter-municipal companies under study, struvite production, and soil production.

Table 2. Key events in green path development in the Hamar region, Norway

Year	Event	Explanation
1974	Establishment of the utility company	The beginning of the utility company’s history. Owned by five municipalities
1980	Installation of heat pump	Recovery of heat from wastewater treatment process (the first installed heat pump in the Nordics)
1996	Biogas facility (Cambi) put into operation	Biogas production from wastewater sludge
2002	The establishment of an inter-municipal utility company	Separating the water and wastewater services and waste management from the municipal administration to a new inter-municipal company
2003	Gas engine installed at the wastewater treatment plant	Production of electricity from surplus gas from sludge storage
2013	Biological wastewater treatment (pilot) started, patented in 2015	Recovery of phosphorous as struvite
2016	Biological wastewater treatment – full-scale testing	Recovery of phosphorous as struvite
2016	Demerger	Splitting up of the waste and wastewater activities The studied inter-municipal waste company established
2016	Soil production	The inter-municipal waste company starts soil production from garden waste and wastewater sludge
2017	Establishment of a private subsidiary	A private company set up to marketize the biological wastewater treatment process developed by the utility company
2020/2021	Full implementation of biological wastewater treatment, the first (2020) and second (2021) line in full operation	Recovery of phosphorous as struvite (10,000 kg per year when fully operational)

Biogas production

The work with biogas in the utility company commenced in the early 1990s when a large waste treatment and biogas plant (Mjøsanlegget) was established near Lillehammer, in response to environmental concerns and connection with the Olympic Winter Games in 1994. This involved partners from several adjacent regions, with pilot support from the Ministry of the Environment. The project was pathbreaking at the time, and the inter-municipal waste company in the Hamar region remains involved in the project. Subsequently, in 2010, the utility company set a target to reduce energy costs by 50% and become climate neutral by 2020. By 2012, an innovative procurement process was initiated by Norwegian Water and the National Programme for Supplier Development (LUP). Five companies delivered bids in the procurement process. The tender was won by Nærenergi, which entered into collaboration with the utility company to develop a demonstration biogas plant. The plant entered into full operation in 2017 (Thorvaldsen & Jarstein 2017). The biogas production at the utility company’s facilities constitutes path upgrading, as they were able to take advantage of resources that previously had not been valorized (the methane from sludge) and to create a new business model related to that activity (Grillitsch & Hansen 2019). According to the original estimates, distribution and use of the biogas for transport would result in annual savings of 2862 tons CO₂ and generate a lifetime profit of 3.6 million NOK (Thorvaldsen & Jarstein 2017). However, the former CEO expressed frustration over changing signals concerning biogas as an alternative fuel in Norway, both at the national and regional level (Interview 1). While the inter-municipal waste company’s trucks run on biogas, other solutions have been selected for collective transport in the region. Hence, the agency of the inter-municipal company is not supported by structural change that would support the actions of the company. The current distributor is optimistic about the longer-term perspective, but so far it has been challenging to develop a market. Due to the increasing and unpredictable costs of renewable electricity, the utility company is currently planning to establish systems whereby it can use biogas as a source of energy for its processes, besides the heat that is already being utilized.

Becoming an inter-municipal company

The establishment of the inter-municipal utility company in 2002, at the time responsible for both water and wastewater services and waste management in the Hamar region, was an important organizational rearrangement that later would contribute to enhancing CBE and green path development in the region. Prior to the establishment of the inter-municipal utility company, the water and wastewater services were handled by the municipality administrations themselves. In previous studies, it has been argued that organizing the wastewater services within municipalities in a separate company promotes novelty and innovation compared to organizing it as a part of the municipal administration (Södergren & Palm 2021). The reason for the company model being more prone to innovation is that the activities are separated from other municipal responsibilities, such as health care and education. As such. the inter-municipal company can devote its full attention to improving its water and wastewater services. With more resources to focus on one thing, it is also more likely that the company model promotes resource recovery (Södergren & Palm 2021). The establishment of the inter-municipal utility company in the Hamar region, which we regard as institutional entrepreneurship from the group of owning municipalities, constitutes a crucial event in the preformation phase (Martin 2010), as it laid the foundation for future potential innovation, both for the utility company and the inter-municipal waste company.

Biological wastewater treatment process and struvite production

Another key development in the story of green path development in the Hamar region is the development of a biological wastewater treatment process. The predominant treatment method in Norway currently is chemical treatment. As a result of the addition of chemicals, the sewage sludge that is left after such treatment contains a chemical composition (heavy metals) that makes it unusable for other applications than limited spreading on farmland (which is heavily regulated to reduce the concentration of heavy metals) (Helse- og omsorgsdepartementet et al. 2003). In 2013, the utility company started to develop its own biological treatment process to move away from utilizing chemical treatment. The initial in-house development of the biological treatment technology was piloted in 2013 and fully implemented in 2020–2021. The new biological treatment process also enabled the extraction of phosphorous as struvite (crystallized phosphorous). The struvite extracted from the wastewater treatment process enabled the development of a new industrial opportunity for the utility company. Through innovative Schumpeterian entrepreneurship, resulting in the development of novel biological treatment technology, the utility company has enabled green path upgrading (Grillitsch & Hansen 2019), where c.10,000 kg of struvite extracted per year has opened for a new line of business, fertilizer production (Interview 1). The struvite, which has been approved for use and registered as a product in 2023, can be used to replace mineral (mined) fertilizers in, for example, agriculture, parks, and golf courses.

Finding room to innovate within a self-cost regime is challenging, as the added costs related to technology development need to be covered by fees paid by the inhabitants who utilize the services. However, the former CEO of the utility company described the owning municipalities as forward thinking ‘who wants us to make money in other ways than fees’ (Interview 1, our translation). By providing the utility company with an opportunity space, the owning municipalities have contributed to enabling innovation, and in the continuation of this, green path upgrading (Grillitsch & Hansen 2019), as it has resulted in a substantial qualitative change, where the implementation of novel biological treatment technology enables phosphorous recovery and a new business model for the utility company. The opportunity space created was specific to the region, as it was enabled by a certain group of municipalities with a distinct history when it came to preserving water bodies (as discussed above in the section ‘A legacy of environmental awareness and action’). Furthermore, the opportunity space was actor-specific, as it was only open to the inter-municipal company, which is the only company with the right capabilities and knowledges to seize the opportunity and develop new business models As continuous development and innovation is challenging under a self-cost regime, the four owning municipalities and the utility company (as owners) set up a subsidiary technology company to develop further and commercialize the treatment technology. Thus, the innovation activity has resulted in new economic activities in the region.

Soil production

As demonstrated in the section ‘A legacy of environmental awareness and action’, the legacy of the inter-municipal utility company has been an important precondition for its work on circular bioeconomy. For the case of soil production at the inter-municipal waste company, the Mjøs Campaign is also mentioned (Interview 2) as an important reason for the motivation to start soil production from garden waste and wastewater sludge. The soil production was initiated by the utility company, as a way to utilize sewage sludge. Through close collaboration between the two companies, and particularly experimentation and development of soil products by the waste company, soil production became a new industrial activity in the region. We argue that the soil production results from a combination of place-based leadership by the utility company, which instigated the development through dialogue with the waste company, and innovative Schumpeterian entrepreneurship by the waste company. By recombining their resources (sewage sludge from wastewater treatment and garden waste from waste management) and drawing on the waste company’s knowledge of composting, the two companies developed an economic activity that is new to the region, and as such have promoted path upgrading (Grillitsch & Hansen 2019). The development of soil production in Hamar demonstrates how an actor-specific and region-specific opportunity space enables agency, as production came about through dedicated actions from the two inter-municipal companies. The two companies could draw on regional possibilities that only these two actors, with their distinct knowledge of potential usage of existing bioresources, could perceive.

In more recent events, there has been an initiative to establish a new soil production factory (information from meetings with the utility company), which would increase the potential production volume and is expected to create seven new jobs.

Conclusions

Theoretically, this article makes two contributions to the literature on agency in regional development by providing novel insights into the agency of inter-municipal companies in green path development processes. As such, we have applied Grillitsch & Sotarauta’s theoretical apparatus of the trinity of change agency and opportunity space (Grillitsch & Sotarauta 2020) on thus far understudied actors in the agency and path development literature. Grillitsch & Sotarauta (2020, 707) argue that ‘human agency refers to intentional, purposive and meaningful actions, and the intended and unintended consequences of such actions’. In this article, we have shown that the unintended consequences of the four owning municipalities’ actions when forming an inter-municipal wastewater company have been the root of emerging green path developments within the Hamar region. Following actions of innovative Schumpeterian entrepreneurship, where the utility company has developed novel biological treatment technology, several new business models in which recovered resources from the wastewater treatment process constitute the main input factor have been established. As an inter-municipal company, the company has also demonstrated place-based leadership, through instigating the development of soil production in the inter-municipal waste company. The waste company has also demonstrated, in collaboration with the utility company, innovative Schumpeterian entrepreneurship, as it has started soil production, adding a new business model to the existing waste management services provided. These actions, utilizing recovered resources from wastewater treatment and waste management, have enabled path upgrading in the Hamar region.

In cases where there is a lack of system-level agency, and limited policy push for the greening of regions and their economic activities, as is the case for resource recovery in the wastewater sector in Norway, firm-level agency becomes crucial. This article contributes to the literature on agency in green path development by underpinning the importance of firm-level agency to compensate for the lack of system-level agency for green path development. As such, the article also contributes to the ongoing exchange within the literature on the interaction between ‘agency and structure’, as we argue that in cases where there is a lack of structural elements (e.g. strong policies that promote a desired development, such as a circular economy), agency among regional actors can take on decisive roles.

We (the authors) have seen that green path development, in the form of path upgrading (Grillitsch & Hansen 2019), has occurred following the efforts of key regional actors when pursuing CBE in the Hamar region. Although we see limited economic development now (in 2024), despite new economic activities being developed and new jobs created within the region, we believe that increased focus on CBE and the valorization of recovered natural resources found in, for example, wastewater will become central in the transition towards a more circular economy, both in Norway and in other countries. As utility companies perceive themselves more as resource providers than service providers, they can promote novel ways of creating value from waste, which could become important in the future. As such, the emerging green path development in Hamar can be regarded as the seed for future branches of industrial development within the region, perhaps then also with higher economic output and creation of more jobs within the region. We argue that what has been observed in the Hamar region could be relevant in other non-metropolitan regions too, where the wastewater sector is constituted by one or a few actors. We believe that resource recovery also can promote green path development in other regions and that valorization of recovered resources (from wastewater, and other sectors) can be an important starting point for development.

Municipal companies, owned by a single municipality, are largely similar to inter-municipal companies in terms of organizational characteristics (Södergren & Palm 2021). The findings in this article are therefore likely to be relevant also for municipal wastewater companies. Furthermore, in this article we have introduced circular bioeconomy to the field of economic geography as a promising avenue for future research, where the valorization of recovered bioresources plays a key role.

Regarding future research, more attention should be paid to studies of how the public sector and municipal and inter-municipal companies can contribute to the transition to a circular bioeconomy. Studies that would dig deeper into how public service providers can transition towards becoming resource hubs and the potential regional development processes related to these activities would be a welcome contribution to both the field of economic geography and the broader social sciences.

Acknowledgements

The work reported in this article was based on activities within the Horizon 2020 project WIDER UPTAKE funded by the European Commission under grant number EC/H2020 869283.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Companies where all participants (owners) are municipalities, county municipalities, or other inter-municipal companies.