What is a circular economy?
A circular economy preserves the value added in products for as long as possible and virtually eliminates waste. It retains the resources within the economy when a product has reached the end of its life, so that they remain in productive use and create further value. It may involve:
- Increasing the time products deliver their service before coming to the end of their useful life (durability);
- Reducing the use of materials that are hazardous or difficult to recycle (substitution);
- Creating markets for recycled materials (standards, public procurement);
- Designing products that are easier to repair, upgrade, remanufacture of recycle (eco-design);
- Incentivising waste reduction and high-quality separation by consumers;
- Incentivising separation and collection systems that minimise the costs of recycling and reuse;
- Facilitating industrial clusters that exchange by-products to prevent them from becoming wastes (industrial symbiosis);
- Encouraging wider consumer choice through renting or leasing instead of owning products (new business models)
The circular economy differs from the prevailing linear 'take-make-consume and dispose' model, which is based on the assumption that resources are abundant, available and cheap to dispose of. It is increasingly clear that this is not a viable model for sustainable economic growth. Nevertheless even an optimised circular economy would require some virgin raw material inputs and produce small amounts of residual waste.
How is the circular economy linked to resource efficiency?
Developing a circular economy is key for achieving the overall objective of resource efficiency – i.e. ensuring that our economy can grow while becoming less dependent on resource use and contributing to a better environment. Incremental increases in resource efficiency are still possible with the current linear economic model, but against the background of global pressure on resources and rising insecurity of supply, moving to a more circular economic model promises a much brighter future for the European economy. Keeping resources in productive use longer, using them again and again through recycling, cutting waste and reducing dependence on uncertain supplies is a direct route to improving competitiveness.
What exactly is the Commission proposing?
The Commission proposes to establish a common and coherent EU framework to promote the circular economy. This combines smart regulation, market-based instruments, incentives, information exchange, and support for voluntary approaches. The key focus areas are research and innovation, design, unlocking investment and financing, supporting business and consumers, and modernising waste policy and targets. Efforts to use resources more efficiently and promote the circular economy will be guided by a political target to increase resource productivity by 30 % by 2030.
Under the EU Research and Innovation Programme Horizon 2020, the opportunities for moving towards a circular economy at European level will be demonstrated with large scale innovation projects targeted at cooperation within and across the value chains, fostering skills development, and supporting market application of innovative solutions.
EU waste policy and targets are a key driver for shifting to a circular economy. To step up efforts, targets on waste recycling with a 2030 horizon are proposed – 70 % for municipal waste and 80 % for packaging waste. As of 2025, there will be a ban on the landfilling of recyclable waste – plastics, metals, glass, paper and cardboard, and biodegradable waste, with the objective to move towards virtual elimination of landfilling of municipal waste by 2030.
Waste legislation will be simplified, and cooperation between the Commission and Member States will be stepped up to ensure better implementation. Minimum operating conditions for extended producer responsibility schemes will be laid down. Tailor-made approaches will be implemented for specific waste streams, such as marine litter, phosphorus, construction and demolition, food, hazardous and plastic waste.
Who will benefit from these measures, and how?
The economy will become more competitive and sustainable as resource productivity increases. Resource productivity in the EU grew by 20 % in the period 2000 -2011. Maintaining this rate would lead to a further 30 % increase by 2030, and could boost GDP by nearly 1 %, while creating over 2 two million jobs more than would be the case within a business as usual scenario. This would improve security of resource supply for European industries whilst reducing environmental impacts and greenhouse gas emissions.
National, regional and local governments can take action to promote the circular economy in a predictable policy and legal environment.
Business will benefit from a push for organisational and product innovation, new markets, reduced costs, and better access to financing. Waste prevention, eco-design, reuse and similar measures could bring net savings of € 600 billion or 8 % of annual turnover for companies in the EU, while reducing total annual greenhouse gas emissions by 2 % to 4 %.
Making sustainable choices will become easier, more attractive and affordable for consumers. They will have a wider choice of environmentally friendly, durable products and new services related to renting, sharing, repair and remanufacturing of products.
Citizens will enjoy a cleaner and healthier environment, better waste infrastructure and waste management, and products that last longer, can be repaired and are recyclable.
What is the resource efficiency target? Will it be binding and how will progress be measured?
A realistic target to increase resource productivity, endorsed by the EU and its Member States, would focus political attention and action on tapping the potential of a more resource efficient and circular economy to create sustainable growth and jobs. In the EU Environment Action Programme to 2020 (7th EAP), Member States and the European Parliament decided to establish indicators and set targets for resource efficiency, as well as and to assess the whether it would be appropriate to include a lead indicator and target in the European Semester. The mid-term review of the Europe 2020 Strategy will provide an opportunity to endorse such a target at a high political level.
After careful examination and wide consultation, resource productivity, as measured by GDP on Raw Material Consumption, has been identified as an appropriate candidate for such a target.
RMC is an aggregate indicator measuring (in tonnes) all the resources used in the economy, while taking into account resource use embedded in imports. Currently it is available for the EU and some Member States. Data for the remaining Member States will be available soon.
The European Resource Efficiency Platform recommended that the EU should aim for at least a 30 % increase in resource productivity measured in this way. It will be up to the next Commission to decide on whether to propose to include GDP/RMC as a headline target in the context of the revision of the Europe 2020 Strategy after the on-going public consultation.
Are Member States developing initiatives in the field of the circular economy?
There are a number of Member States that are active in this field:
In Germany, in the framework of the national strategy for sustainable development, the decoupling of economic growth and material consumption has been underlined since 2002. In 2012, in implementing the EU Waste Framework Directive, a law was adopted promoting the circular economy and ecologically sound waste management that calls for a closed material loop. This law is a part of a broader programme for an efficient use of resources (PROGRESS).
The UK developed an initiative on circular economy WRAP, estimating that a circular economy could generate 50 000 new jobs and 12 billion euro of investment, boosting GDP by EUR 3.6 billion. Furthermore, taking circular economy principles into account when designing products could allow for 140 million extra tons of waste to be successfully captured between now and 2020, leading to EUR 1.7 billion in extra recyclate revenues for the UK economy.
In 2013 France developed a strategy with long term measurable objectives and a roadmap to transition to Circular Economy. The French Institute for Circular Economy brings together a wide range of stakeholders, and promotes exchange of best practices, awareness-raising, research and development of concrete examples. The outcome of consultations underway will be summarized in a white paper, with a view to adopting legislation on the circular economy by 2017.
In the Netherlands, it is estimated that shifting to a circular economy would bring significant reduction in CO2 emissions, land use, fresh water use and raw materials – more than 25% of the total imports of goods by weight in the Netherlands/year. The circular economy could amount to EUR 7.3 billion a year in market values (or 1.4 % of today’s GDP) and could create 54 000 jobs.
How are the other green growth initiatives adopted on 1 July linked to the circular economy package?
The Circular Economy Communication and the waste policy and targets review, together with the Communications on sustainable buildings, green employment and the green action plan for SMEs, launch a renewed resource efficiency agenda for the coming years.
These initiatives stem from commitments in the Roadmap to a Resource-Efficient Europe and the 7th EAP, and aim at wide policy integration to achieve economic, social and environmental objectives.
Why is waste management a key element towards circular economy?
Turning waste into a resource is one key to a circular economy, but of course the waste phase is only one in the circle. The objectives and targets set in European legislation have been key drivers to improve waste management, stimulate innovation in recycling, limit the use of landfilling, and create incentives to change consumer behaviour.
The persisting economic system is basically a linear model where we extract, manufacture, sell, use and throw away. If we re-manufacture, reuse and recycle, with one industry's waste becoming another's raw material, we can move to a more circular economy where waste is eliminated and resources are used in an efficient and sustainable way.
Efficient and sustainable waste management focusing on waste reduction, reuse and recycling would contribute to stop losing valuable materials and ensure their reinjection into the EU economy.
What are the current challenges for waste management in Europe?
Although waste management continues to improve in the EU, the economy currently loses a significant amount of potential secondary raw material which is found in the waste stream. In 2010, total waste production in the EU amounted to 2.5 billion tonnes. From this total only a limited (albeit increasing) share (36 %) was recycled, with the rest being landfilled or burned of which around 4 to 500 million tonnes could be recycled or reused. The EU thus misses out on significant opportunities to improve resource efficiency and create a more circular economy, create growth and jobs, take cost-effective measures to reduce greenhouse gas emissions and reduce its dependency on imported raw materials.
Without new initiatives to improve waste management in the EU, significant amounts of valuable resources will continue to be lost in the coming years. Without a clear perspective for the medium- to long-term, the EU risks seeing increased investments in inflexible, large-scale projects focused on the treatment of ‘residual’ waste, which may stand in the way of the potential to improve resource efficiency though reducing waste generation at source, and reusing and recycling more of the waste which is generated. T
The dissemination of best practices between Member States needs to be reinforced, in particular concerning the economic instruments, which are key to boost waste prevention, re-use or recycling.
There are large divergences in terms of waste management performances between MS, as well as in terms of quality of monitoring tools such as statistics on waste generation and management. In the EU28, 492 kg of municipal waste was generated per person in 2012. However, municipal waste generation totals vary considerably, ranging from 668 kg per capita in Denmark to 279 kg per capita in Estonia. The treatment methods also differ substantially between Member States, with countries having nearly phased out landfilling and reaching high rates of recycling and composting, while others are still heavily relying on landfilling.
What are the objectives of the waste target review?
The main aim is to provide a strategic vision of where we want to be in 2030 and adjust the legislation to the demands of the circular economy by boosting the level of its ambition.
A clear and stable policy framework will allow public and private actors across the EU to develop long term investment strategies focusing on prevention, re-use and recycling.
This will help push the EU towards a more circular economy, securing access to raw materials, protecting the environment, creating jobs and economic activity as well as increasing EU competitiveness.
Based on the objectives of the 7th EAP, we want to see:
- overall waste generated per inhabitant in decline;
- recycling and re-use at their “maximum feasible” level;
- landfilling ultimately phased out;
- and incineration limited to non-recyclable materials.
We also need better implementation of the targets already in place. That means:
- better monitoring and improved statistics;
- a simpler approach to reporting;
- more frequent and better use of economic instruments, giving people an economic incentive to recycle more.
What are the key elements of the proposal?
The proposal sets ambitious targets and precise key instruments to achieve and to monitor them.
The main elements of the proposal include:
- Recycling and preparing for re-use of municipal waste increased to 70 % by 2030;
- Recycling and preparing for re-use of packaging waste increased to 80 % by 2030, with material-specific targets that will gradually increase between 2020 and 2030 to reach 90% for paper and cardboard by the end of 2025 and 60% for plastics, 80% for wood, 90% of ferrous metal, aluminium and glass by the end of 2030;
- Ban on landfilling recyclable waste (including plastics, paper, metals, glass and biodegradable waste) by 2025, and give a mandate to the Commission to consider further phasing out of landfilling of recoverable waste by 2030;
- Measures aimed at reducing food waste by 30 % by 2025;
- An early warning system to anticipate difficulties of Member States to achieve targets and to advise and assist them in getting on track;
- Improving traceability of hazardous waste;
- Increasing the cost-effectiveness of Extended Producer Responsibility schemes by defining minimum conditions for their operation;
- Measures to promote the dissemination of best practices in all Member States, such as better use of economic instruments (landfill/incineration taxes, EPR schemes, Pay-as-you-throw schemes, incentives for municipalities) and/or improve separate collection schemes;
- Simplification of the reporting obligations and alleviating obligations faced by SMEs involved in waste management;
- Improving the reliability of key statistics through harmonised and streamlined calculation of the targets;
- Improving the overall coherence of waste legislation by aligning definitions and removing obsolete legal requirements.
What are the expected impacts?
Stop losing valuable materials: although waste management continues to improve in the EU, the EU's economy currently loses a significant amount of potential secondary raw material which is found in the waste stream. We currently lose annually around 600 million tonnes of materials contained in waste, which could be recycled or re-used. This will make a significant difference, especially in a context of soaring resource prices, resource scarcity, and increasing global competition concerning the access to raw materials.
Develop new businesses, create jobs: In Europe, 400 000 direct jobs would be created through proper implementation of the exiting waste legislation and a further 180 000 direct jobs could be created by 2030 through these revised targets. Most of them would be impossible to delocalize outside the EU. Going beyond these direct jobs in waste and recycling sectors, the impact on the wider economy of greater resource efficiency are even greater. In Europe, taking additional steps to increase Resource Productivity by 30% by 2030 could boost GDP by around one per cent, while creating more than 2 million jobs. It is estimated that measures such as better eco design, waste prevention and re use could bring net savings to businesses in the EU of up to €600 billion or 8% of their annual turnover. By securing our access to raw materials, by developing new business models, by creating jobs in Europe, the circular economy has a role to play in getting us out of the current economic crisis, being more resource efficient, increasing the competitiveness of the EU economy in the long-term.
Increase quality of life: Improved waste management contributes significantly to reducing greenhouse gas emissions (443 million tonnes avoided between 2014 and 2030, directly by cutting GHG emissions from landfills and indirectly by recycling materials which would otherwise be extracted and processed). Improper waste management can have direct consequences at local level such as landscape deterioration due to landfilling, local water and air pollution, etc. Sustainable waste management focusing on prevention, reuse, recycling has direct impact on littering at local level and on the more global issue of marine litter (-28 % by 2030) in the oceans and its impact on the biodiversity and in the food chain.
How were the proposed waste targets and policy options determined?
The proposal is based on ex-post evaluations – including a ‘fitness check’ study covering the packaging and packaging waste Directive – as well as on an ex-ante evaluation using a European reference model on waste generation and management.
Based on the results of these evaluations, a detailed impact assessment and a comprehensive public consultation have been carried out. The proposal also takes into account the recent assessment of waste management performance in the 28 Member States, including the compliance-promotion initiatives with the Member States who are in most need of improving their waste management performance.
The proposed targets were set at levels already achieved today in the most advanced Member States. Deadlines were then calculated taking into account the time needed for all MS (based on past progression rates) so that all MS would be able to respect the proposed targets and the proposed deadlines. This approach is considered as prudent as new techniques have emerged at all levels of the recycling chain (separate collection, sorting, recycling) which should allow less advanced MS to make rapid progress in the coming years. In addition, the mid-term approach (with final deadline in 2030) allows for the necessary flexibility in implementation.
The proposed targets were also fixed in a ‘synergetic’ and consistent way so that landfilling is progressively reduced while recycling of municipal and packaging waste is increasing at a similar rhythm. They are also consistent with existing requirements (e.g. separate collection by 2015, recycling and landfill diversion targets).
How can the targets be achieved?
The proposal includes supporting mechanisms that will ensure smooth implementation at national, regional and local levels, as well as regular monitoring of progress through the creation of an early-warning system, waste data registries, improved reporting and calculation methods, better use of key economic instruments, simplified obligations for SMEs.
In addition, the Commission has launched a compliance-promotion exercise which aims at assessing and monitoring the implementation of EU waste legislation as well as providing technical guidance and support to Member States efforts. The Commission also works in close collaboration with Member States to ensure the optimal use of EU funds with a priority given to investments and technical assistance related to the first steps of the waste hierarchy (prevention, reuse and recycling). The new LIFE regulation includes the possibility of funding projects in support of implementation of waste management policies.
Those measures should ensure that Member States with lower recycling rates are taking advantage of the experience and good practices of the best-performing ones. It should help them to design the appropriate package of measures and leapfrog the implementation stages in order to capture rapidly the potential benefits (including direct cost savings and increased revenues from material sales) linked with the achievement of the upgraded targets.
Solutions that work are based on good governance and reinforced technical capacities. They also rely on economic measures which have proved successful in improving waste management, in particular through landfill and incineration taxes or bans, pay-as-you-throw and extended producer responsibility schemes, or incentives for local authorities to promote prevention, re-use and recycling.
Summary of actions and EU-funded research projects related to the Circular Economy:
BBI (Bio-based Industries Joint Undertaking). The Bio-based Industries Joint Undertaking is a €3.7 billion Public-Private Partnership established under Horizon 2020 between the EU and the Bio-based Industries Consortium. It is dedicated to realising the European bioeconomy potential, turning biological residues and wastes into greener everyday products through innovative technologies and biorefineries, which are at the heart of the bioeconomy. The first call for proposals will be published at a joint event which will take place in Brussels next 9 July. Learn more about the BBI (http://ec.europa.eu/research/press/jti/factsheet_bbi-web.pdf) and check the Participant Portal (http://ec.europa.eu/research/participants/portal) for the announcement of the first calls on 9 July.
Cu-PV (Cradle to cradle sustainable pv modules, EU budget contribution: € 4.49 mln, Project coordinator - Energy Research Centre of the Netherlands, Petten, The Netherlands): Even if solar power is pollution-free during use, production of solar (PV) modules consumes extensive energy and natural resources. Recycling is hardly considered during module production, and therefore cumbersome and inefficient. This project aims to minimise the use of critical resources like energy, silver and lead, while simultaneously maximising recycling possibilities: introducing design for recycling in this sector, and collaborating over the value chain for improvements in recycling.
cycLED (Cycling resources embedded in systems containing Light Emitting Diodes, EU budget contribution: €4.05 mln, Project coordinator - Fraunhofer IZM, Berlin, Germany): The energy saving potential for Light Emitting Diodes (LED) products is significant, and the strategic importance of the LED technology is reflected in the current and upcoming market development. However, LED-based product systems contain many resources like indium, gallium or rare earth metals. Some of these substances are classified as critical raw materials at EU level. To strengthen the emerging LED market in Europe cycLED focuses on the improvement of the material flows and policy measures to remove barriers for LED technology dissemination.
DRAGON (Development of Resource-efficient and Advanced underGrOund techNologies, EU budget contribution: €3.24 mln, Project coordinator - Montanuniversität Leoben, Leoben, Austria): In the near future Europe’s underground construction industry is expected to excavate around 800 million tons of mineral resources from tunnels, metros and other underground constructions like underground powerhouses, sewage tunnels etc. Currently, this excavation material is usually disposed of in landfills. DRAGON aims at achieving resource efficiency in tunnelling and other underground construction processes by turning the excavation material into a valuable resource for other processes and sectors such as the cement, steel, ceramic or glass industries. The project sets out to solve this challenge by developing a prototype system for the automated online analysis, separation and recycling of excavated materials in underground construction sites.
ECO-INNOVERA - ERA-NET ON ECO-INNOVATION (Boosting eco-innovation through joint cooperation in research and dissemination, EU budget contribution: €1.99 mln, Project coordinator - Ministry of Higher Education, Science and Technology Ljubljana, Slovenia): To be competitive at global level Europe needs to boost the implementation of the eco-innovation in industry. To promote Eco-Innovations in Europe ECO-INNOVERA is: providing best practice examples for research planning and funding on Eco-Innovation; setting-up a networking platform for information exchange on Eco-Innovation in Europe; assessing potentials and challenges of research on Eco-Innovation and developing measures to address them; and developing targeted dissemination strategies to support the diffusion of Eco-Innovation along the whole value chain.
ECOWAMA (ECO-efficient management of WAter in the MAnufacturing industry, EU budget contribution: €3.87 mln, Project coordinator - Fraunhofer-Gesellschaft zur Förderung der ange-wandten Forschung e.V., Stuttgart, Germany): Annually, European metal finishing and coating operations produce over 300,000 tonnes of hazardous waste and consume over 100 million cubic meters of water. The innovative resource efficient technology to be developed and demonstrated in the ECO-WAMA project seeks to improve the economic viability of the surface treatment of metals and plastics through the valorisation of industrial waste streams. It will enable an energy and eco- efficient closed-cycle process including recovery and reuse of pure metals and deionised water, reducing demand for primary raw materials and energy.
HYDROWEEE DEMO (Innovative Hydrometallurgical Processes to recover Metals from WEEE including lamps and batteries - Demonstration, EU budget contribution: €3.76 mln, Project coordinator - Kopacek KEG, Vienna, Austria): Waste from Electrical and Electronic Equipment (WEEE) is the fastest growing waste stream in the EU at a rate of 3 to 5 % per year containing high amounts of diverse metals such as yttrium, indium, lithium, cobalt, zinc, copper, gold, silver, or nickel. The HydroWEEE Demo seeks the recovery of rare and precious metals through hydrometallurgical processes. This project has the objective of building two industrial scale, real-life demonstration plants (one stationary and one mobile) in order to test the performance and prove the viability of the processes. The mobile plant could be attractive for smaller recycling companies as several SMEs could reduce the necessary quantities of waste as well as the required investments.
IDREEM (Increasing Industrial Resource Efficiency in European Mariculture, EU budget contribution: €4.21 mln, Project coordinator: Scottish Association for Marine Science, Dunbeg Oban, United Kingdom): Aquaculture is the fastest growing food production sector globally but the European aquaculture industry faces questions of economic and environmental sustainability. This project aims to develop technology to reduce pollution and increase productivity and profit by recycling waste streams, converting them into secondary raw materials for the production of organisms such as seaweed and shellfish.
RESFOOD (Resource Efficient and Safe Food Production and Processing, EU budget contribution: €4.34 mln, Project coordinator - Netherlands Organisation for Applied Scientific Research, The Hague, The Netherlands): Many natural resources (e.g. minerals, water, soil) are used to grow and process food products but, in many cases, their usage is highly inefficient due to the lack of technological solutions and knowledge in combination with uncertainties about health and safety issues. Furthermore, the food chain management is challenged by the large amount of wasted food. RESFOOD is developing innovative technologies for the re-use of nutrients, energy, water and biomass; developing new methods for improving the disinfection processes for vegetables ensuring appropriate monitoring of health and safety risks; and validating the solutions in five on site pilot demonstrations, also including Life Cycle Assessment.
SPREE (Servicizing Policy for Resource Efficient Economy, EU budget contribution: €2.39 mln, Project coordinator - Research Council of Lithuania, Vilnius, Lithuania): Green growth policies, improving resource productivity through supply side measures such as supporting eco-innovation or facilitating sustainable use of raw materials, have achieved only relative decoupling since they have inevitably led to rebound effects through the increased scale of consumption. The challenge is to design policy instruments which integrate both supply and demand side policies influencing both production and consumption patterns together with positive societal effects. SPREE project proposes to face this challenge by supporting the transition from selling products to providing services, with a focus on the water, mobility and agro-food sector.
Environmental footprint of products
In support of a single market for green products, the environmental footprint method developed by the Joint Research Centre, the Commission's in-house science service, is a multi-criteria measure of the environmental performance of a good or service throughout its life cycle. It seeks to establish a common methodological approach to enable Member States and the private sector to assess, display and benchmark the environmental performance of products, services and companies based on a comprehensive assessment over the entire life-cycle. Currently the JRC is leading two pilot projects, on intermediate paper products and on sector rules related to copper-producing companies, which aim to develop harmonised product- and sector-specific rules through a multi-stakeholder process.
More information on these topics: https://ec.europa.eu/jrc/en/research-topic/green-and-resource-efficient-europe
European Platform on Life Cycle Assessments
The Commission has also launched a European Platform on Life Cycle Assessments, in response to commitments in the Integrated Product Policy Communication (2003), which highlight that life cycle assessment is the most appropriate approach for the environmental assessment of products, and that a Platform is required to facilitate the availability and quality-assurance of data, methods, and studies. Cornerstones of this knowledge base that is vital for moving towards a circular economy include the Life Cycle Data Network and the European Reference Life Cycle Database. These Platform tools facilitate the feasibility and efficient use of resources in the EU for many potential policy options for environmental information, more comprehensive macro-scale environmental analyses, and study dissemination. They support also macro scale environmental assessments of supply chains and end-of-life waste management options if improvement potential and associated targets are to be assessed.