Circular Economy: From EU policy concept to having a concrete impact

by Marta Edreira Garcia 18 Jul. 2018

In December 2015, the European Commission (the Commission) launched its plan for a Circular Economy, consisting of a series of legislative proposals with a view to achieving a new economic model. Under this model, both production and consumption should develop to be in line with the environment and the earth’s resources, in order to benefit present and future generations. Through agreements such as the Paris Agreement, the result of COP 21 and the Sustainable Development Goals, signed in New York City in September 2015, the European Union has shown its firm commitment to sustainable development and mitigation, and adaptation to climate change. The circular economy is also part of this drive.

In the Circular Economy Action Plan, launched in December 2015, a circular economy was defined as an economy ‘where the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimized’.

The European Union seeks, in order to implement this new economic model, a broad commitment from all levels of government, including regions and local entities, as well as social and economic agents. Denmark, Finland, Luxembourg, the Netherlands, Portugal, Scotland and regions such as Flanders have already designed their strategies or circular economy action plans, adapting the community framework to their economic, social, natural, productive and energy needs.

In January 2018, the Commission launched its new Circular Economy Plan for 2018. In addition to the 2015 legislative proposals, the Commission's Action Plan includes development measures in the areas of production, consumption, waste management, secondary market of raw materials and sectoral actions, focused on fields such as plastics, food waste or bioproducts; in addition to the promotion of research, development and innovation (R&D&I) as a key transverse element to carry out this transition. Some of the main points of the Plan are as follows:

Waste Management

The latest data collected by Eurostat shows that, in 2014, 2,502 million tons of waste was generated in the European Union, of which only 900 million, or 36 percent, was re-used. Regarding the rate of recycling by Member State, there are large differences, varying from 80 percent in some areas to less than five percent in others. The revised legislative proposals on waste seek to set clear targets for reduction of waste and establish an ambitious and credible long-term path for waste management and recycling. Key elements of the revised waste proposal include the common EU target for recycling 65 percent of municipal waste and 75 percent of packaging waste by 2030, harmonizing calculation methods for recycling rates throughout the EU, concrete measures to promote re-use and stimulate industrial symbiosis. The proposal also defines economic incentives for producers to put greener products on the market and support recovery and recycling schemes (for example, in the case of vehicles or EEE products).

The EU proposal responds to specific review clauses in three pieces of EU waste legislation:

  • Waste Framework Directive
  • Landfill Directive
  • Packaging and Packaging Waste Directive

Although in the case of EU Directives, each Member State may adapt the objectives to its specific circumstances and to its individual framework, the following common consequences can be expected due to the specific objectives of the European proposal:

  • Simplification of waste legislation and measurements methods related to targets;
  • Harmonization of a minimum level of Extended Producer Responsibility (EPR) schemes;
  • New mid-term waste targets in line with the resource efficiency EU ambitions and access to raw materials;
  • Reuse and recycling should be feasible at the highest level, in virtue of the principle of hierarchy established in the EU Waste Management Framework Directive. The suitability of products to be reused and recycled from the first step of production, as well as ensuring energy efficiency in their manufacture, are points of great importance in the European strategy, which will need to be applied by all Member States, taking into account the eco-design concept.

Chemicals

As well as multiple documents related to different issues in waste management, the EU proposal also consists of options to address the interface between chemical, product and waste legislation. Through its proposal, the European Commission is looking for a better system of identification of substances of concern, to reduce the presence of chemical substances in commercialized products and to improve their trace-ability. This will be achieved through:

  • Improving access to information for companies on the composition of the discarded goods they handle by the time the goods become waste.
  • Ensuring the uptake, when possible, of secondary raw materials by promoting non-toxic material cycles; It is important to consider possible chemical restrictions and exceptions from them in the recycling and reuse of products.
  • Harmonizing the interpretation and implementation of end-of-waste rules across the EU to further facilitate the use of recovered material within the EU.

Monitoring the Implementation

The transition from a linear economy to a circular economy is an opportunity to boost competitiveness and to welcome a more sustainable and efficient model of growth. The importance of the circular economy to European industry was recently highlighted in the renewed EU industrial policy strategy. European programs and funds will keep stimulating industrial innovation and the Commission will work with EU Members States to implement national reforms to comply with the new requirements.

It is estimated that, by 2030, the circular economy could generate a profit of 1.8 trillion euros in the European Union as a whole, which is 0.9 trillion more than the current linear economy model. The Commission also calculates that there will be savings in raw materials by industry of 600 billion euros (8 percent of the annual turnover of the EU in 2015) and that around 580,000 new positions of work associated with the new model will be created, of which 30 percent is associated with full compliance with EU regulations on waste and eco-innovation.

The strong industrial focus of these policies has been complemented by sector-specific measures such as those relating to the steel, space and defense industries , and through a strong focus on key enabling technologies.

In this transition, monitoring the key trends and patterns is essential to understand how to implement the concept in the different sectors potentially affected (from employment policies to general environmental requirements), and to help identify good results and best practices in Member States’ legislation. The results of this monitoring should form the basis for setting new priorities towards the long-term objective of a circular economy and drive new actions. For this reason, the Commission has developed a simple monitoring framework in the action plan to track progress towards the circular economy through specific indicators which capture the main elements of the concept. However, the cross-sectional nature of the circular economy makes it difficult to follow. The circular economy monitoring framework is based on, and will complement, the existing Resource Efficiency Scoreboard and Raw Materials Scoreboard, both developed in recent years by the Commission. Indicators will be kept up to date and open to the public eye. These indicators include the lifecycle of products and materials, priority areas and sectors, the impacts on competitiveness, and innovation and jobs. But it is not a closed list and it will continue increasing. For example, issues like green public procurement need further development.

Industry in Europe provides 36 million direct jobs, and it is expected its weight in the EU GDP will be back to 20 percent by 2020. Europe’s global leadership and international stature depends in large part on high value added, low carbon and sophisticated European products and services. The ability to keep moving forward in innovation and sustainability is key if Europe is to face the local and global challenges, take advantage of new industrial age opportunities and globalization, and keep ensuring the high standards of living of citizens, both inside and outside Europe.