2018 has been a turning point for the transformation of Europe into a more sustainable and circular society. The year started with good news for innovation frontrunners in the form of the first-ever coordinated European Strategy for Plastics. This was soon followed by negotiators agreeing new targets for the use of renewable energy resources in the EU and wrapped up in October with the publication of the updated EU Bioeconomy Strategy. It has also been a busy year for the European Commission (EC), particularly for commissioners such as Jyrki Katainen, responsible for jobs, growth, investment and competitiveness. This is because a sustainable society is not only about making processes circular and using biological resources as raw materials, but also about caring for everyone’s welfare. Hence, jobs and growth play a crucial role in the process and represent an important challenge when transforming economic models. We discussed the role of the EC in facilitating this transition and creating new opportunities for all European citizens with Commissioner Katainen.
According to the EC, both the circular economy and the bioeconomy have great potential for generating new jobs. How will they contribute to economic growth?
“The circular economy will be a source of new jobs in the coming years because it will increase productivity and help the EU import fewer resources from other countries. Basically, we’ll spend less money on imports and at the same time try to maintain the value of raw materials in Europe for as long as possible, by recycling products and secondary raw materials over and over again. Furthermore, the bioeconomy also has great potential for creating jobs and growth. Most of the feedstock used for bioeconomy products comes from our own farms, forests and coastal areas, so the bioeconomy provides an important source of income diversification for these sectors. It is estimated that bio-based industries could create around one million new jobs by 2030.”
How does the EC plan to deal with potential job losses that might occur because of this transition?
“In some sectors, where raw material demand is about to decline because of the circular economy, we have to create mechanisms to help people find new jobs. There are various member states with plenty experience in these kinds of transitions. For instance, when in Finland companies from the ICT (Information and Communications Technology) sector, such as Nokia, were laying off lots of people, the country created a mechanism to help people find new jobs, receive training or become entrepreneurs. It means that we already have social funds in place; which is the way to help member states obtain financing for their projects. However, each individual case is different and financial support must be tailored according to specific needs. So, a bio-based and circular economy is a source of growth and job creation, but, at the same time, some of the jobs may be different than the ones we have today. This leads to the second point which needs our attention: skills. The Commission has very little power in the field of education and training. However, since we are witnessing an evolution where jobs, carriers and working places are changing, member states have to react and provide adequate training.”
We have addressed the circular economy and bioeconomy as separate concepts. However, merging both concepts seems necessary if we are to achieve greater sustainability. Is the EC working towards a circular bioeconomy?
“The bioeconomy is the renewable leg of the circular economy. The circular economy is not always about renewable resources, even though it can be, but the bioeconomy encourages replacing the remaining fossil-based raw materials. Also, as I said before, it’s good for Europe because we can use our own feedstock instead of importing raw materials such as oil.
One of the concrete measures that we are carrying out at the moment for the bioeconomy to become a sustainable part of the circular economy is to create quality standards for bio-based plastics. There are plenty of bioplastics on the market, but they are not necessarily fully sustainable. Even though they are better than oil-based plastics, some of these products don’t biodegrade. Or, even if they degrade, they break down into microplastics, which then enter our food chains. We want to reduce the amount of oil used for plastics, but we also need to make sure that we can get rid of microplastics. That’s why we need sustainable criteria: establishing quality standards is one of the most important measures. Another example is our target increase for using new generation biofuels. Forestry practices must be sustainable so that biofuels are sustainably produced. This will significantly improve the biofuel market in the coming years, once the new targets are in place.”
In terms of biofuels, do you think there has been a lack of concrete proposals within the new Bioeconomy Strategy for the sustainable achievement of EU bioenergy targets?
“Yes, that is true. And we have to take this seriously, because even if biological feedstocks are better than the use of fossil fuel based feedstock we still have to make sure that the whole value chain is sustainable. For instance, if we increase the use of forest-based biomass, we have to make sure that forest management is sustainable, meaning that the forest is being replenished more rapidly than it is being consumed. The circular economy, as the EC sees it, is the industrial leg of climate protection whose entire value chain must be sustainable. We know that there are plenty of opportunities for the use of forest-based biomass, certainly more than we are using at the moment, but we have to make sure that forests are being managed adequately.”
Some environmental campaigners argue that efforts must focus on reducing the use of plastic rather than looking for alternatives such as bioplastics. To what extent does the European Strategy for Plastics really focus on prevention?
“Actually, the more we recycle plastics, the less we need virgin plastic. In that sense, the overall production of virgin plastic will decrease. Therefore, recycling is an important part of preventing the consumption of plastics. Secondly, the more we can produce and recycle bio-based plastics, the less we will need the fossil-based equivalent. Plastic is also a good material because it is very light if compared to other materials such as glass. Glass can appear to be more sustainable if you only look at the feedstock aspect, however the footprint of a heavier material can actually be bigger than that of a lighter product (as it takes more energy to transport editor’s note).
At the same time, when reducing the use of virgin plastics, we also try to prevent the increase of food waste. Food waste is a huge problem and plastic can help us prevent food waste. In this area we need to create more standards for plastic packaging in order to make sure that we can recycle it over and over again, which, to a large extent, is unfortunately not the case.
As a concrete incentive for member states to improve circularity, we introduced a levy as part of the Multiannual Financial Framework proposal (MFF) 2021-2027. It is a levy, not a tax, but it will be directly proportional to the quantity of non-recycled plastic packaging waste generated in each member state (0.80 € per kilo).”
Large companies such as Coca-Cola and Danone have recently signed a voluntary commitment to tackle plastic pollution (the New Plastics Economy Global Commitment). To what extent can such pledges contribute to tackling plastic waste?
“We need a whole range of measures, however these campaigns are good examples that demonstrate how companies can really change their business models and become more sustainable in terms of plastic use. It’s a good example for other companies that have not yet acted on this opportunity. As a European regulator, we must enable a new sustainable recycling market to emerge, and that is why the proposals to which I referred before, namely creating quality standards for plastic packaging, are very important. Pledging campaigns are important to create peer pressure on companies. However, they must be followed up with regulation. For instance, the bioplastics market needs regulation so that it can become profitable and so that there is a market logic behind it. Otherwise, we’ll always be in a situation where cheap oil prices dominate the plastic market, and we really have to get rid of this unhealthy and vicious cycle.”
The updated Bioeconomy Strategy introduced a €100 million Circular Bioeconomy Thematic Investment Platform. To what extent will this boost private sector investment in the bio-based industry?
“This €100 million is mostly aimed at innovation. We need innovation. We really have to invest in new business models, but also in new products that are more sustainable. In that sense, the EU support for innovation is very important. However, I also want to mention that the EC is currently helping member states where waste recycling is not developing as effectively. In concrete terms, DGs (EC’s directorate-generals) are organising events in those states that are lagging behind. During these events industrial players, companies and local authorities are invited to look at the potential opportunities. Therefore, we are providing technical advisory services for member states, and we show examples of how other countries or regions have managed to improve waste management systems to become more circular. Once again the private sector plays an important role because not all regions and municipalities know what kind of technology is already available. The more the public sector is able to modernise waste management, the better the opportunities for the private sector to invest in those areas and technologies. We are in the middle of a very robust and fast transformation. I’ve had lots of feedback from recyclers saying that their business is booming at the moment. In certain countries, they are on the edge: they have to hire more and more people and produce more and more equipment for recycling purposes. This is a positive sign, but we have to make sure that the whole of Europe stays on course and we don’t create divisions around this issue.”
Finally, what project would you highlight in terms of jobs and growth for 2020?
“Since Renewable Matter is based in Italy, I will give an Italian example. Italy has been an extremely active user of the European Fund for Strategic Investment (EFSI), which is part of the Juncker Plan (Investment Plan for Europe), especially for small and medium-sized enterprises (SMEs). To date, Italy has already mobilised over €444 billion in fresh investments throughout Europe and supported almost 800,000 SMEs. Out of these 800,000 SMEs, Italy has used EFSI so actively that almost 400,000 Italian SMEs have already obtained financing. This is very significant as Italy is a very entrepreneurial country. All those entrepreneurs who have obtained EFSI financing will most probably hire new people or at least become more competitive in the market. This is just one tool that we have used quite successfully throughout Europe, but especially in Italy. The investment plan for Europe, the Juncker Plan, is set to create 1.5 million jobs by 2020. That is also a significant number.”
Ce, “Bioeconomy Strategy” October 2018, tinyurl.com/y9w6qjfg
Ce, “A European Strategy for Plastics in a Circular Economy”, January 2018; ec.europa.eu/environment/circular-economy/pdf/plastics-strategy.pdf