Internal Market, Industry, Entrepreneurship and SMEs

Turning recycled raw materials into business opportunities

Turning recycled raw materials into business opportunities
Published on: 09/12/2015
Increasing the market uptake of secondary raw materials is a key objective of the visionary new European Commission package to transform the EU economy to a more circular one. This package will boost recycling, improve resource use, and open new markets for secondary raw materials - materials that have been recycled from waste that are placed on the market to be used in new products.

Re-injecting these materials into the beginning of the product lifecycle can reduce costs of production and our impact on the environment. Not only is this good for the planet, there is a strong business case for this. It can open up new areas of business, encourage new product development, create jobs, promote innovation and stimulate economic growth.

The EU market for recovered materials and waste is underdeveloped. To realise the full potential of all secondary raw materials, the Commission wants to help build the case for more investment, remove the barriers to their trade, improve waste management practices and build trust in the quality of secondary raw materials through the development of standards.

Overcoming barriers

Uncertainty about the quality of secondary raw materials can be an important barrier to their uptake in the economy. Standards are needed to build trust and facilitate a Single Market for secondary raw materials in the EU. The Commission will launch work to develop quality standards for secondary raw materials where they are needed, in particular for plastics.

The Commission also wants to encourage industrial symbiosis, where the waste or by-products of one industry become the raw materials or energy for another. So we have proposed to harmonise the rules on by-products and end-of-waste status. The revised legislative proposal on waste will establish a foundation for the clear legal status for by-products in all EU countries.

The transport of waste between EU countries often poses major administrative burdens. We will take measures to facilitate the legal transportation of waste while taking further action to clamp down on illegal shipments.

Secondary raw materials as a key investment area

We consider investments in secondary raw materials a priority. They are needed in areas such as waste collection infrastructure, reverse logistics, sorting or recycling and in new technologies.

Through the research and innovation programme, Horizon 2020, the EU has already funded projects on: an EU-wide secondary raw materials inventory that helps to estimate the stock and flows of raw materials in society; the recycling of waste electronic products; and the recycling of building materials. By 2020, 10 pilot projects focused on the key targets of the European Innovation Partnership on Raw Materials should also be launched.

Private finance needs to be directed towards new opportunities in the market for secondary raw materials. The European Fund for Strategic Investments (EFSI) is an instrument that can be used to fund such investments. Together with the European Investment Bank (EIB), and the European Investment Advisory Hub, the Commission will carry out outreach to encourage applications for funding, and support the development of projects and investment platforms relevant to the circular economy, e.g. in the areas of plastics recycling or minerals.

Work in specific areas

Returning the earth's resources

Nutrients from organic waste (waste biomass, food waste, used water and manure) can be returned to the soil as organic fertilisers for EU farmers and gardeners, reducing the need for mineral-based fertilisers. Currently the market for these fertilisers is hampered by differing rules and quality standards across EU countries. The Commission will propose to revise the EU regulation on fertilisers. Once this has been approved, it will help in the recognition of organic and waste-based fertilisers, developing a new market in the EU.

Re-using construction waste

Waste originating from construction and demolition represents one of the highest volumes of waste in Europe. We plan to take a series of actions to ensure the recovery of valuable resources and adequate waste management in the construction and demolition sector. For example, planned pre-demolition guidelines can boost high-value recycling in the sector. Proposed voluntary protocols can improve the quality of recycled construction materials and build confidence in this new market.

Recovering critical raw materials

Increasing the recovery of critical raw materials (CRMs) is another opportunity that the circular economy package seeks to exploit. The Commission has created a list of CRMs that are of high economic importance to the EU economy. They are critical because they are used in many key industrial applications (such as medical equipment, braking systems) and everyday electronic devices (such as smartphones), they cannot be substituted, and they often need to be imported from politically unstable regions. They also often have very low recycling rates. This means that significant economic opportunities are lost.

Increasing the recovery of CRMs will not only open the door to new businesses, but will also help secure Europe's access to CRMs. In this field we want to: improve product design to allow for better recyclability; ensure better information is provided from manufacturers to recyclers; develop high-efficiency recycling standards linked to a certification scheme; and promote the recovery of CRMs from mining waste and landfills.

Plastic as a recyclable resource

Plastic recycling has also not reached its full potential. Again, smart design, as well as proper sorting can increase the recycling rate of plastics and avoid landfilling, incineration and the use of primary materials. The Commission will outline a strategy that addresses issues such as recyclability, biodegradability, and the presence of hazardous substances of concern in certain plastics. This should create more demand for recovered plastics while boosting the demand for the services of plastic waste management enterprises.

Care with chemicals

Many chemicals have hazardous properties and EU legislation already has instruments to manage their risks. However, as more information becomes available as a consequence of scientific progress, previously unclassified substances may be identified as hazardous or have their current classification modified. The right balance has to be struck between legislation which enables the recovery of materials from waste that may contain toxic constituents for specified safe uses, and the need to ensure that hazardous chemicals of concern are properly managed. We will develop analysis and propose options on the interface between chemicals, products and waste legislation, including on how to improve the tracking of chemicals of concern in products.

The role of SMEs

While 45% of waste material from large companies is resold, this figure falls to only 25% for small and medium-sized enterprises (SMEs). The latter face difficulties taking the circular economy into account, as they cannot benefit from economies of scale like large firms.

As set out in the 2014 Green Action Plan for SMEs, we are acting to support these companies, analysing the barriers they encounter to use resources better and to improve waste management.

In addition, SMEs, including social enterprises, will make a key contribution to the circular economy: they are particularly active in fields such as recycling, repair, and innovation.