On 2nd December 2015, the European Commission presented its new circular economy package containing a communication on the circular economy, together with a list of measures, and four legislative proposals on EU waste policy (www.reteambiente.it/normativa/23203/).
The circular economy concept is generally described as one in which products and the materials they contain are highly valued, unlike in the traditional, linear economic model, based on a “take-make-consume-throw away” pattern. This production and consumption model is based on two complementary loops drawing inspiration from biological cycles: one for “biological” materials (which can be decomposed by living organisms) and one for “technical” materials (which cannot). In both cases, the aim is to limit the leakage of resources as much as possible.
Whilst most stakeholders continue to wade through the detail of the texts, several highlights stood out for many from the four legislative proposals. These include the setting of new waste management targets to be met by 2030, in particular by increasing the share of municipal waste for reuse and recycling to 65%, increasing the share of packaging waste prepared for reuse and recycling to 75% (with specific targets for various materials used in packaging), and gradually limiting municipal waste landfill to 10%. In addition, the Commission proposed setting minimum requirements for Extended Producer Responsibility (EPR) schemes and differentiating the contribution paid by producers on the basis of the costs necessary to treat their products at the end of their life. Monitoring of Member State compliance with targets as through early warning systems, together with a focus on reuse and prevention and a revision of the definition of waste, were also outlined as means by which to help “close the loop” for resources in line with the United Nations Sustainable Development Goals (SDGs) adopted in 2015.
Since the European Commission put forward an initial circular economy package in July 2014 and subsequently withdrew the legislative proposal on waste included in the package in February 2015, hopes and expectations have had plenty of time to grow in anticipation of a groundbreaking and transformative proposal. There was also optimism from many that the new, re-tabled proposal would focus on a cradle to cradle approach towards circular product design as well as the end of life of goods.
Differences between the initial circular economy package put forward in July 2014 and the new one presented in December 2015 have caused some controversy amongst the EU stakeholder community. In Brussels and further afield, whether these changes resulted in cautious optimism or outright disappointment depended very much on who you asked.
On the one hand, waste management targets were revised downwards; derogations have been introduced for five Member States; the overarching target to increase resource productivity by 30% by 2030 has been dropped; and the aspirational target to reduce food waste by at least 30% by 2025 no longer appears in the legislative proposals. On the other hand, the action plan contains many new initiatives on aspects not directly related to waste management but essential for a transition to a circular economy, such as production, consumption, secondary raw materials or innovation.
The action plan presents measures in five priority sectors including plastics, food waste, critical raw materials, construction and demolition, and biomass and bio-based products. On marine litter, the aspirational objective set in 2014 to reduce marine litter by 30% by 2030 is maintained, whereas on food waste the Commission indicates that it is committed to the 2030 target set in the Sustainable Development Goals, aiming to “halve per capita global food waste at the retail and consumer levels,” inter alia, by developing a common methodology to measure food waste and clarifying EU legislation on waste, food and feed.
Across these areas and priority sectors, several types of measures are proposed. These include legislative measures, for example putting forward a revised Regulation on fertilisers as well as “softer” measures, such as support via communications and reporting initiatives, and with implementation, guidance, indicators, standards and measures to ease access to finance. In addition to these, the Commission intends to consider the need to ensure the non-toxicity of recycled materials and the contribution of the bioeconomy for the transition to a circular economy.
Stakeholder Responses to the Circular Economy Package
Although reactions to the new package of measures from the stakeholder community were mixed, notably, from the NGO community they were openly critical. The NGO umbrella group European Environmental Bureau (EEB), which represents the interests of a range of environmental groups, branded the proposal as “smoke and mirrors”. Its policy Manager for Products and Waste, Stéphane Arditi, commented: “The Commission has failed to deliver on its promise to come with a more ambitious proposal. The addition of some nice initiatives does not offset the fact that the legally binding core of the package, notably the waste targets, is weaker than the last proposal. We’ve ended up with a wasted year and a proposal that is less ambitious. Lowering the recycling targets compared to last year’s proposal means that more waste will be sent to landfill or incineration plants. This is a missed opportunity because recycling creates more jobs and causes fewer emissions than either landfill or incineration.”
European Environmental Bureau (EEB), www.eeb.org
Friends of the Earth Europe were even more scathing stating that the Commission’s proposal did not live up to its promise whilst suggesting that the proposal was a casualty of the European Commission’s so-called “Better Regulation” Agenda. Magda Stoczkiewicz, Director at FoE Europe, commented: “This has been a year of unnecessary delay. Under the guise of Better Regulation, the Commission has totally undermined claims of ‘ambition’ by watering down binding measures and giving Member States a free pass to shy away from tackling our overconsumption crisis. Compared with the previous one, this package is not Better Regulation but short-termist Bad Regulation.”
Friends of the Earth Europe, www.foeeurope.org
Zero Waste Europe, also lamented that the proposal failed to address prevention and reuse, and even went so far as to eliminate food waste and marine litter reduction targets. The organization also echoed the complaint that the package was less ambitious on separate bio-waste collection and lowers waste recycling targets.
Zero Waste Europe, www.zerowasteeurope.eu
But EU Industry struck a more conciliatory tone with Markus J. Beyrer, Director General of Business Europe stating: “The renewed approach is a good step to support business in this long-term transition agenda. Acceleration of the circular economy entails stronger commitment and collaborative approach involving governments, businesses and science as well as consumers and increased value chain cooperation.”
Business Europe, www.businesseurope.eu
EU Affairs Director, Ben Butters, of Eurochambres, The Association of European Chambers of Commerce and Industry also welcomed the new package commenting: “There was much discussion prior to the adoption of the new package about the level of ambition following last year’s withdrawal. But fundamentally EU legislation must be workable if it is to accomplish its objectives, so ambition must be coupled with pragmatism. That is why the Circular Economy package must take into account the financial and operating conditions of the businesses that will be obliged to comply with it and also Europe’s generally very cautious economic forecasts. We believe that the Commission’s proposal on the whole strikes a good balance between ambition and pragmatism and we now look to the Parliament to follow suit.”
Hubert Mandery, Director General for CEFIC, the European Chemicals Association noted: “Maximising efficiency and minimising waste are good business practice, and it only makes sense to consider how those same principles can be applied to the economy as a whole.” However he expressed disappointment that the Commission appeared not to have taken the opportunity to clarify the definition of waste, and encouraged them to do so in order to ensure that valuable resources are not lost to the economy due to regulatory barriers. Further noting that the Communication identifies a need to facilitate the traceability and risk management of chemicals in the recycling process, Mandery added, “The European chemical industry is committed to ensuring the safe use of chemicals. We look forward to working with the Commission and other stakeholders to make sure that the same high standards apply at every stage of the circular economy.”
However, concerns were raised by pioneers in the renewable’s sector about how well the package had recognized both the potential and the need to reward the EU’s innovative better performers.
Kari Herlevi, Senior Lead on circular economy for SITRA, the Finnish Innovation Fund commented: “The European Commission’s new program on circular economy includes important policy guidelines and is more comprehensive than the first version, but more incentives are needed. For example, clear indicators, fiscal incentives and funding instruments for investments would speed up the transition towards circular economy. The mutual aim of the Circular economy package is obvious and welcome in order to improve Europe’s competitiveness through resource efficiency. Additionally, concrete incentives and obligations are quickly needed to steer companies’ innovation, consumer behavior and public procurement.” Furthermore, he cautioned: “It is notable that the circular economy and its relevancy to prevent climate change has drawn too little attention. This is an indication of political silos although it is clear that climate change cannot be prevented without the wise use of natural resources. Bioeconomy (such as bioproducts like advanced renewable biofuels, bio chemicals) and digitalization are an important part of circular economy. It is very important to move to experiments and concrete actions.”
EuropaBio, the European Association of Bioindustries, welcomed the Commission’s focus on public procurement schemes, communication and awareness campaigns and incentives for the use of more resource efficient, renewable products and processes. But Secretary General, Nathalie Moll, also emphasised the hurdles facing biobased industries in the creation of a circular economy: “We are trying to emerge into a marketplace where, in 2015, the fossil carbon industry received an estimated $5.3 trillion in subsidies, equivalent to 6.5% of GDP according to the IMF (refered to Post-tax energy subsidies: IMF Working Paper ‘How Large Are Global Energy Subsidies?’). To make the playing field yet more uneven, fossil carbon products rarely if ever need to demonstrate or foot the bill for proving sustainability, unlike renewable, EU-sourced biobased alternatives. An EU Circular Economy strategy only makes sense in the context of a serious reality check of this situation and of the need to put in place long-term support and measures to enable its better performers to flourish.”
European Bioplastics (EUBP), the European association representing the bioplastics industry along the entire value chain, welcomed the Circular Economy Proposal of the European Commission. It acknowledged that “bio-based materials present advantages due to their renewability, biodegradability and compostability. The focus of the proposal has indeed been broadened compared to its predecessor,” stated Hasso von Pogrell, Managing Director of EUBP. “However, the link between bioeconomy and circular economy needs to be developed further. Concrete tasks have to be identified that drive the development of a truly circular economy – a biobased circular economy. Biobased materials, products, and their value chain need to be given a level playing field with conventional, fossil-based commodities.”
European Bioplastics, en.european-bioplastics.org/
In a first reaction to the Commission’s publication, Martin Reynolds, Chairman of EUROPEN, the European Organsation for Packaging and the Environment stated: “EUROPEN members are committed to continuously improving the environmental performance of packaged products in a sustainable manner. Being able to take advantage of the scale of the EU Internal Market has been crucial to unlocking the packaging supply chain’s investment in resource efficient innovations. Therefore, we strongly support the retention of the Internal Market safeguard, which remains vital to achieving a competitive and resource efficient Circular Economy for our industry.” Virginia Janssens, Managing Director of EUROPEN, added: “We welcome the proposal’s intention to improve the transparency of and rule enforcement for existing Extended Producer Responsibility (EPR) schemes, as well as the accountability of different actors in EPR implementation. In line with this shared responsibility, we will now assess the implications of some of the proposed wording in particular related to producers’ financial contributions to these EPR schemes.”
Voicing the need for market demand side measures in the circular economy, President David Palmer-Jones of the European Federation of Waste Management and Environmental Services, FEAD, said: “If Europe truly believes in the wider economic, environmental and social advantages of a Circular Economy, it must recognise that market forces and supply side measures alone will not deliver it.” He added “Europe’s economy can only be truly circular if strong markets are available for the secondary raw materials the recycling and reprocessing sectors produce. The current markets are unstable and disincentivise secondary raw material production and uptake by Europe’s industry. While secondary materials are in direct competition with lower-price virgin materials, we will not deliver a more circular economy in Europe, even when overall demand for raw material is strong, unless the environmental cost of using primary raw materials is better reflected in their price.”
For now, in Brussels, stakeholders pore over the details of the texts, drawing up their wish lists of amendments, and the Commission’s parcel is passed onto the European Council and Parliament. Most agree that a quick political agreement is unlikely with the European Parliament likely to seek more demanding waste targets and some Member States already hinting that current targets are too tough. Meanwhile, debate intensifies between those who see the future lying in market “pull” measures, creating demand for secondary raw materials, and those who wish to instead focus on the “push” measures by driving collection measures.
The Netherlands is gearing up to make the circular economy a centrepiece of its Presidency of the Council of the European Union during the first half of 2016 and will aim to present its Council conclusions on the package before handing over leadership to the Slovaks in the second half of 2016.
Across the board, mixed reactions to the circular economy package were surely to be expected as the transition towards a circular future will involve disruption and change, creating winners and losers. Brussels has long been the battleground for clashes between advocates for either environment or for industry but in our circular future those who succeed must achieve the perfect balance of both.