The economy — jobs, incomes, investments — has dominated daily conversations in Armenia since independence. But as the world evolves, many governments now recognize that the aim is not just consistent growth, but sustainable development. How do Armenians relate to the concept of Circular Economy, given our Soviet past, and how is the CirculUP! project taking the country to greater circularity?
Interview : Nazareth Seferian
Photo : Impact Hub Yerevan
The story so far
There was an old bit of dark humor in Armenia in the 1990s: “During the Soviet Union, we had lots of money but nothing to buy. Now, the shops are full of things to buy, but we have no money!” More than thirty years after independence and this transition to a market economy, Armenian consumers find themselves in a very different place compared to this bitter joke—incomes in the country have increased and the shops full of things to buy have been supplemented by department stores and malls, the ability to order online and get home delivery, or even the opportunity to go on shopping trips abroad.
But, in some areas, consumer practices have not yet completely imitated those in the West. It is still quite common to see cobblers and tailors in small booths in the city, offering cheap repair services that help prolong the life of shoes and clothes. When a household replaces a piece of furniture or a television at home, the older items often find second lives at summerhouses or at a relative’s place in the village, rather than heading directly to landfills.
At the same time, malls are full of fast fashion brands, and consumers crowd to buy what they can during seasonal sales, “shopping night” events, or before major holidays. Plastic waste is everywhere in the form of discarded bottles, coffee cups, and bags.
Recent research reveals that Armenia recycles less than 15% of its plastic waste, much below the global average of around 50%. According to news reports, packaging and single-use products make up around 40% of municipal waste.
UNICEF estimates that a resident of Yerevan generates around 300 kg of waste a year, while for someone living in Armenia’s regions, this number is closer to 220 kg a year.
Meanwhile, Armenia has experienced considerable economic growth in recent years—more than 12% in 2022, over 8% in 2023, and above 5% in 2024. The challenge now is to sustain this momentum while being sustainable from the point of view of environmental conservation and social inclusion.
On the sustainability front, the attention largely falls on the concept of a “green economy”, particularly renewable energy. Armenia’s largest industrial solar power plant launched in Mets Masrik in May 2025, with a design capacity of 55 MW and a planned annual generation of 24 kWh of electricity. Mesrop Mesropyan, the Chairman of the Public Services Regulatory Commission, announced in Parliament at the end of 2024 that additional large solar stations were under construction, with a combined planned capacity of 577 MW. In general, the deregulation of electricity markets in Armenia several years ago opened the door to greater independence from fossil fuels at the consumer level.
But when it comes to greater circularity in the economy, these actions barely scratch the surface of what can be done or, in fact, of what needs to be done.
The challenges ahead
As with many challenges facing Armenia today, substantial work needs to be done targeting mindsets. This transformation must occur across multiple levels—among consumers, entrepreneurs, corporate decision-makers, public officials, and more.
Studies looking at post-Communist societies have identified several common patterns in consumer culture. One such factor is this sense of “entitlement” that normalizes overconsumption; a 2011 study in Romania, for example, showed that around 85% of respondents felt that they had the right to “purchase and consume at a rate that would allow reaching Western living standards.” More recently, a 2023 study comparing EU countries on sustainable production and consumption showed that the bottom half consisted almost entirely of countries from the former Eastern Bloc.
When it comes to the business sector, environmental concerns are not at the forefront in Armenia. Indeed, the challenges faced by the country, both post-independence and more recent, often push social issues to the forefront when it comes to corporate social responsibility activities. And often, these take the form of charitable initiatives rather than strategic sustainability programs.
However, significant momentum is building around Extended Producer Responsibility (EPR) with institutions like the American Chamber of Commerce, American University of Armenia, European Business Association, and the Union of Manufacturers and Businessmen of Armenia. The incentive for this action stems, arguably, from an external source, particularly the EU-Armenia Comprehensive and Enhanced Partnership Agreement (CEPA) signed between the Republic of Armenia and the European Union in 2017. The objective is to ensure that producers and importers bear responsibility for post-consumer waste products, rather than expect that responsibility to be borne by other parties.
Panel Discussion at Impact Hub Yerevan during the CirculUP! Project Launch
The CirculUP! Project
It is in this context that Impact Hub Yerevan launched the CirculUP! project in January 2023, aiming to spark a systemic shift toward Circular Economy over three years. With 1.5 million EUR in European Union funding and the expertise and support of Impact Hub Amsterdam, the Impact Hub Network, and the local partner Environment and Health NGO in Armenia, this project aims to build a comprehensive ecosystem that would then consistently drive the economy to greater circularity.
“We are seeking to work with all layers of the Armenian economy,” Impact Hub Yerevan CEO Gevorg Poghosyan said during the project’s launch event, “We’re going to work with environmental and social organizations, business support groups… We’ll train existing businesses and help them transition from a linear value chain to a circular one, we’ll engage with startups, involve the public sector… We’re building a consortium of people who will become ambassadors of Circular Economy.”
The project has made multiple resources on circularity available to organizations and businesses in Armenia, including the Impact Hub Circularity Toolkit, training sessions based on proven methodology from the Netherlands, case studies from other countries, and more. The Armenian Circular Economy Coalition (ACEC) consists of experts and influential thinkers from various fields and conducts its activities through a steering committee, a technical assistance working group, a policy working group, and a communications working group. Coalition members participated in a study visit to the Netherlands, where they examined enterprises with established circular value chains, and also observed the public policies that allowed such businesses to thrive.
The CirculUP! project seeks to demonstrate the strong business case for circularity through training sessions using the CIRCO methodology developed in the Netherlands. This approach takes businesses through their existing linear value chains and identifies cases of value destruction as well as potential new economic and environmental value. The agricultural businesses that have participated in this training have discovered, for example, that discarding the pits of certain fruits or poultry feathers represented a missed opportunity. These “waste” materials could instead generate new products and grow the company’s bottom line. This simultaneous focus on both the economic value and the environmental significance of circularity is key to the mindset shift that is required for long-term circularity success. Additionally, the CirculUP! project supports startups and small and medium enterprises (SMEs) by providing competitive grants designed to fund circularity investments, thus growing local case studies that can be used to encourage the rest of the private sector.
Circular Economy principles promise a future that is sustainable and full of new opportunities and innovations. CirculUP! is an ambitious first step towards that future in Armenia, and the ecosystem-building approach it employs will seek to establish a strong foundation that other initiatives can then follow.
The years ahead will reveal whether the Armenian economy can maintain its upward trajectory while also developing a circular mindset.
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