Circular Economy Action Plan: Achieving plan's ambitious goals means investing in research and innovation

The circular economy is a crucial part of building resilience to future crises, explains Patrizia Toia.
Circular economy

By Patrizia Toia

Patrizia Toia (IT, S&D) is the ITRE Committee opinion rapporteur on the New Circular Economy Action Plan

18 Oct 2020

Even if it is only the battle against climate change that makes the headlines, the work we are doing in the European Union on the circular economy is of paramount importance. In fact, the fight against climate change is included in the broader concept of circular economy, as well as constructing an environmentally and socially competitive, resilient and sustainable economy.

As the European Commission rightly pointed out, in presenting its Circular Economy Action Plan in March, achieving climate neutrality by 2050, preserving our natural environment and strengthening our economic competitiveness all require a fully circular economy.

The bad news is that the EU has an ecological footprint of 4.7 global hectares (gha) per person, compared with the global biocapacity of 1.7 gha per person. In other words, if everyone on the planet consumed like the average European, we would need almost three Earths to sustain this. Today, our economy is still predominantly linear, with only 12 percent of secondary materials and resources returning to the economy.

Meanwhile, Europe is increasingly externalising its pressures on key environmental issues onto other parts of the world. According to the “European environment - state and outlook 2020”, some 30-60 percent of the environmental pressures associated with European consumption are exerted on countries abroad where many goods are produced.

 “Achieving climate neutrality by 2050, preserving our natural environment and strengthening our economic competitiveness all require a fully circular economy”

This footprint on resources such as land, water and energy showed an upward trend in the period studied, while reductions on certain environmental pressures were seen within Europe. This is bad for both environment and our economies.

The COVID-19 pandemic has exposed the vulnerability of the global economy, including the EU, and has made resilience a more pressing priority for governments. To build resilience to future crises and to support the response to the current Coronavirus crisis, leading institutions such as the World Economic Forum and the World Bank are increasingly calling on governments to look to circular economies.

The good news is that we are not starting from scratch. In 2015, the European Commission adopted an ambitious Circular Economy Action Plan, which included measures to stimulate Europe’s transition to such an approach, boost global competitiveness, foster sustainable economic growth and generate new jobs.

The Action Plan of 2015 set out 54 actions and as four legislative proposals on waste. These legislative proposals, along with the Action Plan, included targets for landfill, reuse, and recycling, to be met by 2030 and 2035, along with new obligations for separate collection of textiles and biowaste.

All 54 actions were adopted or implemented by 2019 and the EU is now recognised as a global leader in circular economy policymaking. According to Eurostat, related jobs within the EU have increased by 6 percent between 2012 and 2016.

The Action Plan has also encouraged at least 14 Member States, 8 regions, and 11 cities to advance their own circular economy strategies. Building on that success, we have to widen the approach, keeping closer attention to the capacity of enterprises - particularly SMEs - to adopt the innovations required.

This is why, in the draft opinion I have submitted to the ITRE Committee, I call on the Commission to step up the efforts to make more SMEs fi t for a circular economy. This can be done by supporting them with adequate incentive schemes and financing tools, capacity building and technical assistance as well as by reducing their administrative and legal burdens.

“We must also make full use of the huge opportunities offered by the digital revolution to reduce the environmental footprint in all sectors”

We must also make full use of the huge opportunities offered by the digital revolution to reduce the environmental footprint in all sectors. As it is well explained in the inspiring book “More with less” by Andrew McAfee, the forces of capitalism and technological progress are already pushing companies to produce “more with less”.

However, we also need a forward-looking political will to harness these forces. We have had such a will in the past in certain sectors. The EU’s total emissions, for instance, have decreased by approximately 24 percent below 1990 levels.

Now, we have to widen the scope of our efforts and, as proposed in the ITRE Committee’s opinion, we need measures to handle the short- and medium-term costs of the transitions and make them fair and just.

Last, I would like to highlight the importance of boosting research in the field of chemical recycling which, paired with organic and mechanical recycling, will complete a technology-neutral framework. To have ambitious and achievable goals on a circular economy means above all investing in research and innovation.

As such, the Circular Economy Action Plan cannot be separated from the issue of proper funding of the Horizon Europe programme and the coming MFF that we are negotiating with the Council. Governments now have to demonstrate the same vision as they did with the recovery plan.

Read the most recent articles written by Patrizia Toia - EU Industrial strategy: More ambition, faster implementation