Circular economy model key to boosting European economy

In order to effectively transition to a circular economy model, we must implement concrete measures for waste prevention, writes Karl Falkenberg.

By Karl Falkenberg

17 Nov 2014

Achieving the transition towards a truly circular economy is not just a vision, it is a necessity. This is becoming increasingly evident as the global demand for resources grows rapidly. During the 20th century, the world's population was multiplied by four, economic production was multiplied by 40, fossil fuel consumption was multiplied by 16 and water consumption was multiplied by nine.

This trend will continue in the future. With the global population set to grow to more than nine billion people in 2050, including a new middle class of four billion people, it is clear that our current linear economy model, where we mine, manufacture, use and throw away, is set to hit a wall soon. This model is based on the extraction of raw materials and the ever increasing production of goods with a short lifespan.

"Better eco-design, waste prevention and reuse can bring net savings for EU businesses of up to €600bn"

The current economic crisis has been marked by high unemployment and limited growth. Companies are starting to open their eyes to the potential that lies within a circular economic model – one industry's waste becomes another's raw material. It is a model based on reuse, repair, remanufacturing and recycling of materials and products. Now is the time to take action. The seventh environment action programme (EAP) sets out a pathway for Europe to move towards a more circular economy, where residual waste is virtually eliminated. The goal is to increase resource productivity and to separate economic growth from resource consumption and environmental impacts.

With this particular aim in mind, last July the commission adopted a communication on the circular economy – 'a zero waste programme for Europe'. The communication builds on the EU's growth strategy, 'Europe 2020', showing how innovation in markets for recycled materials, new business models, ecodesign and industrial symbiosis can contribute to a zero-waste economy. It proposes an aspirational target to increase resource productivity by 30 per cent by 2030, based on raw-material consumption compared to GDP. This would help member states focus their policies and promote synergies across EU policy areas such as employment, industry and research.

The green employment initiative which accompanies the communication is a policy framework for labour markets and skills to support the transition towards a green, low-carbon, energy economy that is efficient both in terms of resources and energy. It was designed to anticipate structural change and support workers in acquiring the new skills needed. In addition, the green action plan for small and medium sized enterprises (SMEs) aims to help them exploit the business opportunities available to them. The action plan assists them in improving their resource efficiency, supporting eco-entrepreneurship, and making the most of opportunities in greener value chains.

"By 2025, a maximum of 25 per cent of municipal waste should be landfilled in non-hazardous waste landfills and the landfilling of recyclable materials such as paper, glass, metal, plastic and biodegradable waste will be banned"

The commission also adopted, as part of a 'circular economy package', a legislative proposal on the review of waste targets. This proposal translates the strategic vision on resources and waste set out in the seventh EAP into concrete legislative measures, by amending three existing pieces of legislation – the waste framework directive, the landfill directive and the packaging and packaging waste directive. Its overall goal is to create a clear and stable policy framework, allowing public and private actors across the EU to plan ahead and develop long-term investment strategies focusing on prevention, reuse and recycling.

The proposal recognises the particular importance of waste prevention, setting a target to reduce food waste generation by 30 per cent by 2025. Ambitious recycling and reuse targets have been set for municipal waste – 70 per cent by 2030 – and packaging waste – 80 per cent by 2030, including material-specific targets set to gradually increase between 2020 and 2030. The commission has also proposed a progressive phasing out of landfilling. By 2025, a maximum of 25 per cent of municipal waste should be landfilled in non-hazardous waste landfills and the landfilling of recyclable materials such as paper, glass, metal, plastic and biodegradable waste will be banned. By 2030, the amount of municipal waste dumped in a landfill should not exceed five per cent.

Furthermore, the proposal foresees additional measures, such as the introduction of an early warning system to anticipate possible compliance difficulties, increased traceability of hazardous waste, a clear definition of the minimum requirements for extended producer responsibility schemes, simplification of reporting obligations and harmonisation and streamlining of the calculation of targets in order to improve the reliability of key statistics.

The combination of all the measures proposed in the newly adopted package should pave the way for a transition towards a truly circular economy, which will in turn contribute to job creation and growth. Better eco-design, waste prevention and reuse can bring net savings for EU businesses of up to €600bn. Measures to increase resource productivity by 30 per cent could boost GDP by nearly one per cent, while also creating two million additional jobs.


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