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Circular economy (CE) has been for long regarded as a vital component of the EU-wide economic security, competitiveness and sustainability. The CE in European political guidance occupies an important place combining such sectors as environment and water resilience, renewables and economic development, to name a few.
Background
Circular economy solutions are needed to safeguard biodiversity and solve the climate crisis. Join us in creating a fair transition to a society in which we maintain the value of what we produce through smarter design and shifting from owning products to using services.
Besides, CE can contribute to lower input-based imports towards greater regionalization of supply chains. Policies supporting circular economy can change relative prices between imported and recycled inputs to promote these new circular economy industrial segments until scale economies are achieved.
The EU-wide CE’s proposals include boosting sustainable products, empowering consumers for the green transition, reviewing construction regulation, strategies on sustainable textiles and waste management, etc.
In March 2020, in a Communication the Commission suggested a new “Circular Economy Action Plan for cleaner and more competitive Europe”. The plan stresses that about half of total greenhouse gas emissions, more than 90% of biodiversity loss and fresh-water deficiencies come from resource extraction and processing. Following the European Green Deal launched recently, it formulated a concerted strategy for a climate-neutral, resource-efficient and competitive economy. The plan notes that from front-runners to the mainstream economic players the CE “will make a decisive contribution to achieving climate neutrality by 2050 and decoupling economic growth from resource use, while ensuring the long-term competitiveness of the EU and leaving no one behind”.
Source and citation from: https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN
More on focal CE’s issues in our publication: https://www.integrin.dk/2024/10/23/circular-economy-towards-effective-national-guidance-and-management/
Recycling and reuse
About a decade ago one of the first EU’s CE packages aimed to assist the member states’ businesses and consumers through the transition to a stronger and more circular economy where resources are used in a more sustainable way. The proposed actions were supposed to contribute to “closing the loop” of product lifecycles through greater recycling and re-use, and bringing benefits for both the environment and the economy. The plans aimed to extract the maximum value and use from all raw materials, products and waste, fostering energy savings and reducing green house gas emissions.
The proposals covered the full lifecycle of products: from production and consumption to waste management and the market for secondary raw materials; besides, this transition were supported financially by the then European Structural & Investment Funds (ESIF), which included €5.5 billion for waste management. Additional support of €650 million was provided under the then Horizon 2020 plan to invest in the circular economy at national level. For example, following the 2020 plan, the European Commission proposed in November 2022 new EU-wide rules on packaging.
More in: https://ec.europa.eu/commission/priorities/jobs-growth-and-investment/towards-circular-economy_en
Basic CE directions
As an essential contribution to the EU-wide efforts to develop a sustainable, low carbon, resource efficient and competitive economy, the transition to a more circular economy provides for such means of production where materials and resources are maintained as long as possible, and the generation of waste is minimized. Such transition is the opportunity to transform the member states’ economy and generate new and sustainable competitive advantages for whole Europe.
More in: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024_en
The circular economy’s approaches as a key method to pursue the EU’s economic, security and environmental goals are not new in the EU: hence, the new European Commission College has additionally stressed its strategic significance in the new geo-economic and – political context.
New development parameters in the new College, while spurring innovation among the EU-wide single market, cutting off toxic dependencies and at the same time reducing climate emissions and nature footprints fits well in the agenda of the new Commission team.
Thus, to realize the CE’s potential, the new Commissioner for Environment, Water Resilience and a Competitive Circular Economy, Jessika Roswall (from Sweden, since 2022 she served as a national minister for the EU affairs), is tasked to propose a CE law to create market demand for secondary materials and establish a European single market for waste.
Additionally in: https://www.integrin.dk/2024/12/02/new-european-commissions-college-competences-and-roles-for-next-five-years-part-ii/
To make the circular economy’s strategic role clear, the Finnish Innovation Fund Sitra funded a study by Brussels-based think-tank Bruegel; the study, titled “European circular single market for economic security and competitiveness”, shows why the circular economy should be mainstreamed in EU policymaking. The CE should not be considered only as an instrument of environmental policy, but a key means to build economic security and strategic autonomy. It can also improve competitiveness of a resource-poor continent by bringing resources efficiency into supply chains and production. Finally, the CE can contribute to financial stability by decreasing demand for volatile, scarce, critical raw materials and by decreasing pressure on natural ecosystems crucial to economic growth. The report was discussed in mid-December 2024 and keynoted by Commissioner Roswall.
Source: https://www.sitra.fi/en/publications/a-european-circular-single-market-for-economic-security-and-competitiveness/
EU Circular Economy Resource Centre
The EU Circular Economy Resource Centre (EU CERC) expected to start its operations in the beginning of 2025; the centre, led by Sitra and the Finnish Ministry for Foreign Affairs, will strengthen collaboration between Europe and the Global South.
The EU CERC is a joint initiative of the European Commission, Sitra, the Finnish Ministry of Foreign Affairs and the Belgian development agency Enabel.
The EU CERC aims to promote circular economy cooperation between the EU and partner countries in the Global South and to increase the uptake of circular economy policies and business models globally. The CERC is born out of the need to share best circular economy practices and know-how between the EU and partner countries and to deepen international cooperation for the circular economy.
“Europe has been among the first to put the circular economy into practice, but in recent years progress has also been made on other continents,” says Sitra’s program director in charge of the Centre. “Without international collaboration, the circular economy will not advance fast enough and on a large enough scale; thus, the new EU CERC will provide great opportunity to spread our own expertise and learn from others.”
The European Green Deal and EU’s CE action plan are driving and accelerating the transition to circular economy in the member states. The action plan also has a strong global dimension as the value chains for products and materials are often global and transnational; thus, resolute measures are needed throughout entire value chains to make them circular. This in turn requires sufficient regulations and incentives for the circular economy in both the public and private sectors, across countries and value chains.
The EU’s CE action plan will impact European states and the rest of the world: e.g. the EU’s vision of a circular single market will increase the demands on products and services provided by partner countries. However, it will only be possible if the circular economy is promoted around the world: therefore, the EU intends to support partner countries’ efforts to boost the circular economy and meet increasing circular economy demands.
This is precisely the issues that the EU CERC is both dealing with and responsible for: the centre will also have a flexible and agile response to the demand from partner countries for European circular economy expertise.
More in: https://www.sitra.fi/en/articles/finland-leads-the-new-eu-circular-economy-resource-centre/
Additionally, the guide to help states to make a national road map in:
https://www.sitra.fi/en/news/a-guide-to-help-any-country-create-a-national-circular-economy-road-map/
Our opinion. Since 2015, the EU has made very little progress in transition to a circular economy: up to 2021, the average circularity rate in EU-27 increased by only 0.4 percentage points: i.e. seven member states (Lithuania, Sweden, Romania, Denmark, Luxembourg, Finland and Poland) even regressed during that time.
However, two latest EU actions plans and €10 billion were aimed at preserving the value of products and resources for as long as possible while minimizing waste. The first, in 2015, contained 54 specific actions; the second, issued in 2020, added 35 new actions and set the target of doubling its ‘circularity rate’ by 2030, i.e. the proportion of material recycled and fed back into the member states economy.
But neither of these plans were binding, though they were designed to support member states in increasing CE’s activities: by mid-2022, nearly all EU countries had a national circular-economy strategy or were in the process of developing one.
Source: https://www.eca.europa.eu/en/news/NEWS-SR-2023-17. The EU Court of Auditors conclude in mid-2023 that the EU’s ambition of doubling its share of material recycled and fed back into the economy by 2030 looks very challenging.
The basic four “Rs” in circular economy’s paradigm – reduce, reuse, recycle and recover – are still valid, but very slowly implemented.
More in Euromonitor at: https://www.eumonitor.eu/9353000/1/j9vvik7m1c3gyxp/vjzphjqzh2te
Besides, the European Circular Economy Stakeholder Platform, “powered” by the Commission and the Economic and Social Committee, showcased and discussed recently the EU’s progress in the green and digital transitions.
More in: https://circulareconomy.europa.eu/platform/en/ecesp-annual-conference-2024-circular-economy-visions-actions.