Environment

The road to a circular economy

06/08/2014

The European Commission is proposing a range of measures to accelerate Europe’s transition to a more circular economy. Through greater resource efficiency, and by turning waste into a resource, this new model has benefits for competitiveness, growth and employment, as well as the environment.

In a world of growing populations and dwindling resources, the EU aims to realise a vision where we live well, within the planet’s ecological limits. To get there, we need to limit environmental impacts while improving economic well-being.

Moving to a circular economy is not only possible, it is profitable, but that does not mean it will happen without the right policies.

The question is: how to square this circle?

“Europe is densely populated, locked in a resource-intensive economic model, facing increasing – and more volatile – resource prices, and import dependent for our resources and energy,” said European Commissioner for the Environment Janez Potočnik. He noted that we had no option but to seek to add more value from the resources we use, facilitating greater productivity across many sectors.

Achieving the transition to a more circular economy will require tightening the bond between waste reduction and resource efficiency, learning to appreciate waste as a resource, and applying the lessons of the natural world, where nothing is wasted. Above all, it will mean getting away from the current approach where we dig limited raw materials out of the ground, use them once to make a product, and then dispose of them by burying them back underground.

The fundamental switch will involve moving away from our ‘take, make, consume and dispose’ economies to a model based on ‘re-use, repair, refurbishing and recycling’. The Commission proposals to bring this about are wide-ranging, and include new waste targets and indicators to monitor resource efficiency, policies to boost recycling and make product life cycles more sustainable, and initiatives to create green jobs and support eco-entrepreneurs.

“We are living with 19th century linear economic systems still now, in the 21st century world of emerging economies, millions of new middle-class consumers, and interconnected markets,” said Commissioner Potočnik. “If we want to compete we have to get the most out of our resources, and that means recycling them back into productive use, not burying them in landfills.”

Closing the loop

Building on the Europe 2020 strategy for smart, sustainable and inclusive growth, the new proposals accompany a review of the EU’s current waste targets. The proposals note how waste policy has been a powerful driver for recycling and re-use, but that more needs to be done to close the loop. Incentivising changes earlier in product life cycles and value chains – where there is significant scope for job creation – would help. Greater encouragement is also needed for designs that favour low-resource use, longer product lifetimes, and easier repair and recycling.

 Communication Towards a circular economy

Recycled fabrics, car-sharing schemes and ‘repair cafés’ are a clear sign that change is in the air. New business models can change us from ‘consumers’ to ‘users’ and shift demand from disposable products to services based on renting and repairing. ‘Industrial symbiosis’ can use waste from one production process as input for another, or share a limited supply of rare and expensive catalysts among the companies that use them. ‘Urban mining’ can reclaim the precious metals used in advanced technological products.

But the incentives and infrastructures in linear economies hold back resource efficiency. The Commission Communication signposts some avenues for change, exploring how innovation in markets for recycled materials, new business models, eco-design and industrial symbiosis can help build a zero-waste economy and society.

Taken together, these measures could bring net savings for EU businesses of up to €600 billion, while also reducing greenhouse gas emissions. Additional measures to increase resource productivity by 30 % by 2030 could boost GDP by nearly 1 %, while creating 2 million additional jobs.

Setting targets

“Moving to a circular economy is not only possible, it is profitable, but that does not mean it will happen without the right policies,” said Commissioner Potočnik. “The 2030 targets that we propose are about taking action today to accelerate the transition to a circular economy and exploiting the business and job opportunities it offers.”

Setting an EU indicator for resource productivity will help Member States focus their policies and promote synergies across EU policy areas such as employment, enterprise and research.

Improving our economic well-being and our environment at the same time was once considered ‘squaring the circle’. Now it is called the circular economy.

“We propose to measure resource productivity against a target linking raw-material consumption to GDP,” explained the Commissioner, suggesting an improvement of 30 % in this measure by 2030 as a target to be considered in the forthcoming mid-term review of the Europe 2020 strategy.

Coordinated action

The new proposals aim to create a coherent framework for the circular economy, with smart regulation and policies that are better inter-linked. Clear targets and policy support reduce uncertainty – encouraging the right climate for investment – and engage businesses and consumers. And the Commission will aim to foresee upcoming hurdles, for example by including the transition towards a circular economy in the EU’s research agenda.

“Research and innovation are the keys to success for the circular economy, which is why we are proposing a joined-up approach today,” said European Commissioner for Research, Innovation and Science, Máire Geoghegan-Quinn. “Alongside a supportive regulatory framework, our new Horizon 2020 programme will contribute the know-how necessary to shape a resource-efficient, green and competitive low-carbon economy in the EU.”

Together with related proposals to improve the environmental performance of buildings, and the review of waste and recycling targets, the Commission has proposed new, inter-linked initiatives on green jobs and SMEs.

The ‘Green Employment Initiative’ is a policy framework for labour markets and skills to support the transition towards a green, low-carbon, energy- and resource-efficient economy:  anticipating structural change and supporting workers in acquiring the new skills needed.

The ‘Green Action Plan for SMEs’ aims to help exploit the business opportunities available by improving European SMEs’ resource efficiency, supporting eco-entrepreneurship, and making the most of the opportunities in greener value chains.

Together these ideas will shape the renewed resource efficiency agenda for the coming years. The legislative proposals now go to the European Council and Parliament.

“Improving our economic well-being and our environment at the same time was once considered ‘squaring the circle’,” said Commissioner Potočnik. “Now it is called the circular economy.”

 

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