Concluding remarks, 25 June 2015

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Ladies and Gentlemen,

I am glad to be here today to deliver the concluding remarks of this stakeholder conference on the circular economy. Today we have heard many excellent ideas about what can be done to promote the circular economy. In the Commission many have today been impressed to see the huge interest in this conference. It tells us the consultation will be constructive. In this respect I have a practical wish: it would be very good if everyone could contribute to the consultation as early as possible, preferably before the end of July so that we have enough time to analyse the results.

As outlined by my colleagues Frans, Karmenu and as heard on behalf of Elzbieta earlier today, the Commission is committed to coming forward with a more ambitious approach on the circular economy by the end of this year. I would like to wrap up the discussions from today with my personal take on why I believe in the circular economy, why it is crucial for growth, jobs, investment and competitiveness, and finally how we intend to take this work forward.

I am well aware that I am probably preaching to the converted when I say that it is my firm belief that the future will be circular. We have no choice but to use our resources more efficiently and move away from the linear model. This is obvious when we look at the world's two biggest economies, China and the US. Their competitiveness is grounded on different foundations. Europe must be a leader in the circular economy development, as this is the only way our economy will grow.

We are currently living beyond our means when it comes to the planet we all share. We are also not using the resources we have in a smart way, for example cars are on average parked over 90 % of the time, most office buildings are empty half of the time and we throw away a third of our food. The current linear model does not make economic, environmental or societal sense.

That is why we need to move to a circular economy. I see this move towards more sustainable models as one of the key megatrends for the future: it is not a side phenomenon of the market economy. It is a development I would compare with globalisation; it makes no sense fighting against it.

The need for more sustainable businesses and societies comes from both outside pressure from consumers and from within companies, through the continuous need for improved efficiency and productivity. As emphasised by Elzbieta, the circular economy creates new opportunities for businesses and promotes smart and clean industries.

A lot of this is happening already now. Take the so called sharing economy as an example. As already mentioned, most of the time cars are parked and buildings are not used. These are resources that exist but are not used to their maximum. This realisation laid the foundation for a booming sharing economy, where these unused resources are put to use in a flexible and demand-driven way.

The emergence of these new business models have not been without problems. Neither have earlier transitions that have followed from what was once upon a time seen as disruptive technologies such as the TV, the internet and mobile phones.

It is easy to regulate the past, but that is not what we are here for. Our job as policy makers is however to try to look into the future and ensure that the regulations we put in place can embrace also new business models and technologies. If there are problems with for instance taxation or protection of workers, let us look at those and try to find solutions. But ruling out new business models such as the sharing economy from the outset is no answer. The world keeps on turning.

Ladies and Gentlemen,

In the Commission, work on the circular economy is truly a team effort. Of the colleagues who have been present here today, Frans is focusing on the broad sustainability and better regulation angles, Karmenu on the environmental aspects and Elzbieta on the internal market and industry.

But our work is even broader than that, at least half of the Commissioners are involved in one way or another. This is of course mirrored at the level of the Commission services. This approach enables us to look at the big picture, take into account how decisions in one sector play out in other policy areas. As explained by Frans this morning, our aim is to look beyond waste and close the loop of the circular economy.

My mandate is to look at all the work we are doing from the perspective of growth, jobs, investments and competitiveness. Here I am absolutely convinced that the circular economy, if designed right, can enable a triple win.

There are economic gains to be made from using raw materials and resources more efficiently and being less dependent on imports. There are environmental gains from moving away from a linear economy where we throw away products that could be repaired or recycled. There are social gains to be made from preventing waste, further improving local waste management, recycling, repair and re-use services.

I am also confident that the circular economy taken as a whole can help Europe regain competitiveness and ensure that we are frontrunners in providing environmentally and economically sustainable solutions. This requires both regulatory certainty and investments for the future.

Within the framework of the investment plan, we are addressing precisely these two elements. EFSI, the new fund which is at the heart of the investment plan, will target high-risk investments in forward-looking projects in a number of sectors, including the circular economy. There will also be a project portal, a new platform where investors can assess projects from all over Europe. The investment advisory hub will give project promoters guidance and technical assistance on how to make those good ideas attractive to investors.

The Commission is also working hard on further deepening the internal market in key areas such as energy, digital and capital markets. This includes action on regulatory barriers and areas where fragmentation makes it difficult for our businesses to make the best possible use of the EU internal market. This matters for the circular economy as there are barriers that make it difficult for businesses to optimise their resource use. That is why creating a market for secondary raw materials is crucial: it is fundamentally about broadening our internal market. Today and throughout the public consultation we are gathering information on these types of barriers and on how we could address them at either EU, national, regional or local levels.

Ladies and Gentlemen,

Let me conclude with a couple of words on the expected impact of this paradigm shift from a linear to a circular economy and the next steps. The study from the Ellen MacArthur foundation and McKinsey found that the circular economy would produce better employment outcomes than the current path. As mentioned by Karmenu earlier today, improved recycling alone is expected to contribute significantly to employment.

However, as with any major transition, there will be those who adapt quickly and can profit from a change. There will also be those who do not see the change and end up behind the curve. Our job is to of course minimise the negative consequences by supporting a smooth transition.

The purpose of this conference has been to provide us all with more insight into what that approach should consist of and how we can make it happen. We need the input of stakeholders in order to define what needs to be regulated or de-regulated. How can we use the tools we have at EU level to promote better use of the resources we have? How can we strengthen the circular economy as an integral part of a dynamic market economy? How can we create the kind of market-based incentives that promote moving towards a circular economy?

Indeed, many of us want to support the circular economy, and policy makers are enthusiastic about this development. In this regard, I have two concerns. Policy-makers tend to think that our primary job is to regulate. Sometimes it is indeed wise and makes sense, for example in order to create a secondary raw materials market. We however need to be careful about either regulating too much, or regulating the wrong thingsin good faith. That can easily in fact be killing innovative developments or already existing good things. This is why we need smart regulation. I also have a message to pass to ourselves in the Commission: first we need to know what it is that we are aiming for, and we should then be flexible and open-minded about the tools needed to reach that goal. The tools should not become more important than the objectives.

Once the consultation has closed, we will thoroughly analyse all the feedback we have received. At the same time, our services are working on how to improve the waste directive so that it both promotes and supports the transition to a circular economy. On the basis of all this work, we will by the end of the year present an action plan on the circular economy together with the revised waste proposal. The action plan will set the circular agenda for this mandate. All the initiatives that will be listed in the action plan will then be prepared through the ordinary procedures, fully in line with the better regulation principles.

Finally, I want to sincerely thank all of you for participating in this conference today and I want to thank in advance everyone who will contribute to the public consultation. My final wish is that we could have an open discussion now and in the future in order to secure the economic, environmental and social gains of the circular economy.

Thank you for your attention.