In Lika, a remote region in Croatia, livestock farming has always played a significant role.

Locals say that sheep have fed and clothed generations of their people.

However, in recent decades, as demand for wool has declined and traditional weaving practices have disappeared, what was once a valuable resource has become waste.

A report carried out for the EU's LIFE programme concluded coarse wool from farming and slaughter in the European Union generates about 200,000 tonnes of waste wool each year.

In 2023, Croatian businesswoman Dragica Jerkov turned the problem into a business, opening a factory in the town of Otočac that turns discarded wool into organic fertilizer.

“When we started the factory, we had no idea it was addressing a global problem. We only realized it when we began attending innovation fairs. That’s when it became clear that we had solved something no one else in the world had managed to solve in the way we did,” Jerkov says.

Unlike Australia or New Zealand, where sheep breeds produce wool suited for the textile industry, in Croatia, sheep are raised primarily for food.

Their wool has coarse, thick fibres, unsuitable for making soft, warm sweaters.

For hygiene reasons, sheep must be sheared once a year, creating thousands of tonnes of new waste, which is difficult to dispose of.

Wool decomposes very slowly, over almost 100 years, and tends to collect pathogenic microorganisms. It is considered a potentially hazardous material because it can harbour diseases, viruses and bacteria.

To reuse it safely, wool must be thoroughly cleaned and washed.

But for environmental reasons, washing wool is only permitted in certain processing centres in Europe, not in Croatia.

Jerkov and her team of collaborators have invented and patented several machines that clean and prepare wool for processing.

The most important innovation in Jerkov's machine is the ability to sterilize wool with ozone, so it doesn't leave polluted water.

It also means the processing can be done in small local plants like the one in Otocac.

As wool absorbs moisture, the pellets act as small reservoirs from which plants draw water when needed. Up to 50 percent of raw wool is pure carbon. That means processing 100 tons of wool into fertilizer stores about 50 tonnes of carbon in the soil, carbon that would otherwise enter the atmosphere.

“I believe this is the best example of a circular economy. We have transformed something that no one saw as valuable, what many would call, in quotes, waste, into a high-quality nitrogen fertilizer,” Jerkov says.

Through her factory, Jerkov has offered sheep farmers in Lika the chance to sell wool that would otherwise be treated as hazardous waste.

In doing so, she helped them solve a long-standing problem while creating new value.

AP video by Relja Dusek