In a circular economy, the value of products and materials is maintained for as long as possible. Waste and resource use are minimised, and when a product reaches the end of its life, it is used again to create further value. This can bring major economic benefits, contributing to innovation, growth and job creation.
A circular economy encourages sustainability and competitiveness in the long term. It can also help to:
Action at EU level can drive investment, create a level playing field, and remove obstacles stemming from European legislation or its inadequate enforcement.
On 2 December 2015, the European Commission put forward a package to support the EU's transition to a circular economy.
The EU Action Plan for the Circular Economy outlines a set of both general and material-specific actions. While some obstacles to a circular economy are generic, different sectors and materials face specific challenges due to the particularities of the value chain.
The Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs cooperates with other Commission departments on the following actions.
Better product design is key to facilitating recycling and helping to make products that are easier to repair or more durable, thus saving precious resources. At the same time, current market signals are not always sufficient to make this happen, meaning incentives are needed. Additionally, the Commission has proposed an improved labelling system for the energy consumption of household appliances to help consumers to choose the best performing products.
More on ecodesign
Production processes can be improved to use resources more efficiently and to produce less waste, increasing the competitiveness of European industry. Practices such as industrial symbiosis (where the waste or by-products of one industry become the inputs for another one) or remanufacturing should be encouraged. This can create business opportunities and boost innovation while preserving our environment. The measures will be introduced at a pace that gives industry time to adapt and exploit the opportunities.
The choices made by millions of consumers can support or hamper the circular economy. These choices are shaped by:
Actions on clear and reliable labelling, improving reparability, upgradeability and durability of products are important in this context. Leveraging public purchasing power through green public procurement can be an especially important tool to boost the circular economy.
Innovative forms of consumption may be an area where new business opportunities will emerge in the course of the transition to the circular economy, e.g. sharing products or infrastructure (collaborative economy), servitisation and the increased use of digital platforms. These new forms of consumption are often developed by businesses or citizens, and promoted at national, regional and local level. The Commission supports these new business and consumption models through Horizon 2020 and through Cohesion Policy funding. As announced in the Single Market Strategy, the Commission will also develop a European agenda for the collaborative economy.
Secondary raw materials still account for only a small proportion of materials used in the EU (around 10 % in total). There are important barriers to their uptake in the economy, for example due to inadequate collection systems or the uncertainty of their sources, composition, quantity and quality. We need a better insight into raw materials stocks and flows in the EU. In many cases it is too administratively complicated to transport waste from one EU country to another. Clear end-of-waste rules and/or standards may be needed to build trust and to enable secondary raw materials to benefit from the internal market.
For example, nutrients from organic waste (food waste, used water and manure) can be returned to the soil as organic fertilisers, reducing the need for mineral-based fertilisers. The circulation of these fertilisers is hampered by differing rules and quality standards across EU countries (see below).
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 designated as hazardous or have their current classification modified. A balance has to be struck between legislation which enables the recovery of materials from waste that may contain toxic constituents and the need to ensure that hazardous chemicals of concern are properly managed.
Research and innovation are key to enabling the transition to a circular economy and to boost the competitiveness of EU industry.
Public and private investments are necessary to make it happen. Horizon 2020, COSME, the Structural and Investment Funds, the Fund for Strategic Investments and other EU programmes are important support instruments at the EU level. SMEs, including social enterprises, are particularly active in fields such as recycling, repair and innovation. They play an important role in the development of a more circular economy.
The green action plan for SMEs adopted in July 2014 was designed to complement the circular economy package.
A number of materials and sectors face specific challenges in the context of the circular economy. These challenges need to be addressed in a targeted way.
Plastic is a key enabling material in many industrial and consumer applications thanks to an innovative EU plastics industry. The benefits plastics bring to our society and economy are undeniable. However, the value of plastics is lost due to an inadequate and insufficient plastic waste management (less than 30% of plastic waste generated is recycled). Littering and leakage in the environment are also causing negative impacts on land and sea life.
The transition to more circular plastics and plastics value chain is an opportunity for the EU society and economy. This is the new vision set in the plastics strategy in line with its industrial policy strategy and also providing a tangible contribution to the implementation of the 2030 Sustainable Development Goals and the Paris Agreement.
The EU Plastics Strategy sets a list of actions to be taken at different levels (local, national, European and international) that will improve the economics and quality of plastic recycling, increase the trust in recycled plastics and boost the market, curb plastic waste and litter and drive investments and innovation.
The Commission also launched an EU-wide pledging campaign to boost the uptake of recycled plastics. Both industry and public authorities are invited to submit their pledges to rPlastics-Pledge@ec.europa.eu until 30 June 2018.
Read more on the European plastics strategy.
An estimated 100 million tonnes of food is wasted annually in the EU. Food is lost or wasted along the whole food supply chain: on the farm, in processing and manufacture, in shops, in restaurants and canteens, and in the home.
Apart from the related economic and environmental impacts, food waste also has an important social angle – donation of surplus food should be facilitated so that safe, edible food can reach those who need it most.
In September 2015, the United Nations General Assembly adopted Sustainable Development Goals for 2030. These included a target to halve per capita food waste at retail and consumer levels, and to reduce food losses along production and supply chains. The EU is committed to meeting this goal. The legislative proposal for waste framework directive presented in December 2015 calls on EU countries to:
See also: EU actions against food waste
Critical raw materials (CRMs) are of high economic importance to the EU, yet there is a high risk associated with their supply due to the fact that production is concentrated in certain countries.
CRMs are used in many industrial applications and everyday electronic devices. For example, a smartphone might contain up to 50 different kinds of metals, including CRMs. The very low rate of recycling of most of these materials means that significant economic opportunities are lost. It can be difficult to recover critical raw materials in products that use them, so better product design must be encouraged.
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Waste originating from construction and demolition represents one of the highest volumes of waste in Europe. AA tonne of construction and demolition waste is produced per person per year – i.e. 500 million tonnes in the whole EU every year. Valuable materials are not always identified and recovered. Improving waste management in this sector is crucial for the circular economy.
More on the construction sector
Bio-based material, such as wood, crops or fibres, can be used to manufacture a wide range of products, as well as for bio-fuel and other energy uses.
Apart from providing an alternative to fossil-based products, bio-based materials are also renewable, biodegradable and compostable. At the same time, these materials require special attention due to the need to minimise their lifecycle environmental impact, making sustainable sourcing an important priority. In a circular economy, a cascading use of renewable resources should be promoted together with innovation in new materials, chemicals and processes.
More on biomass
Recycled nutrients are a distinct and important category of secondary raw materials, for which the development of safety and quality standards is necessary. Recycled nutrients from organic waste or by-products (food waste, used water and animal by-products such as manure) can be returned to the soil as fertilisers, reducing the need for mineral-based fertilisers and creating organic fertilisers for EU farmers and gardeners. The circulation of these fertilisers is hampered by differing rules and quality standards across EU countries.