A new report from the Aldersgate Group out today (23 January), “Amplifying action on resource efficiency”, brings forward new business trials showing that greater resource efficiency could deliver significant economic benefits to EU businesses.
By encouraging resource efficient design and tackling key barriers such as access to finance, the Circular Economy Package could significantly improve the resilience and competitiveness of the EU economy, the report states.
The new research published by the Aldersgate Group on behalf of the REBus project is based on the successful delivery of 26 business pilots that have delivered €5.62m in financial savings and reduced materials consumption and greenhouse gas emissions by 62,619 tonnes and 1,953 tonnes, respectively.
The work has been conducted across the UK and the Netherlands in a range of key market sectors (including electrical and electronic products, textiles, construction and ICT) that are worth an estimated €350bn to the EU economy.
Based on the results from the pilot projects, the research also finds that adopting resource efficient business models across these key sectors of the EU economy could deliver:
- Significant financial benefits: An increase of up to €324bn in gross value added (GVA) to the EU economy by 2030;
- Reduced materials dependence: A reduction in material demand of up to 184 million tonnes and an additional 172 million tonnes of material diverted by 2030;
- Decreases in greenhouse gas emissions: A reduction of up to 154 million tonnes CO2eq by 2030.
Steve Wallace, Director of the Aldersgate Group said: “The businesses involved in Rebus have demonstrated that resource efficiency can lead to commercial success. Theirs is an example that others can follow.
“The pilots demonstrate that resource efficiency makes business sense and that there’s a double-win given the environmental benefits that coincide with the financial gains. The report that we are launching today sets out the critical actions required to encourage and support more businesses to follow this path, leading to a more resource efficient and therefore more prosperous European economy.”
“The pilots demonstrate that resource efficiency makes business sense and that there’s a double-win given the environmental benefits that coincide with the financial gains.”
The report features learnings from these business pilots as well as several case studies from Aldersgate Group corporate members, including IKEA UK and Sky.
The pilots taking part range from small SMEs such as iPower (whose installation of small scale fuel cells in social housing is estimated to save consumers up to 36% on their energy bills, whilst mitigating 3-4 tonnes of CO2 annually) to the Dutch Ministry of Defence (whose textile recovery programme for its military personnel has delivered additional revenue of approximately €750,000 and a savings of over 14,500 tonnes of CO2 annually).
The report also sets out a range of policy recommendations for the EU Circular Economy Package based on the learnings from these business pilots:
- The Ecodesign Working Plan must embrace resource efficiency standards and apply them across an increasingly broader range of products to ensure consumers are purchasing goods that last as long as they should and waste isn’t unnecessarily created.
- A viable innovation framework that improves businesses’ access to funding and technical expertise must be supported. This is especially true for SMEs.
- The Commission should encourage and support Member States to introduce fiscal incentives, such as variable VAT rates, so that circular products and services are promoted over their counterparts. The EU’s Action Plan on VAT provides a clear opportunity to address this.
Modernising European Economy
Other recommendations in the report include EU public institutions leading by example through public procurement practices that favour resource saving goods and services, finalising the changes to the definition of “waste” to incentivise the re-use of materials and improving the availability of data on how businesses are becoming more resource efficient.
Nick Molho, Executive Director of the Aldersgate Group said: “The Circular Economy Package is a great opportunity to scale up the benefits of these pilot projects across the EU. By requiring more resource efficient product design, working with businesses to remove the financial and technical barriers that stand in the way of innovation and encouraging the use of fiscal incentives, the Circular Economy Package could significantly improve the resource efficiency, competitiveness and resilience of the EU economy.”
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The Circular Economy is an important element to modernise the European economy. If we want to transform the market economy in a more sustainable direction, we must show there is a business case behind the circular way of thinking. To make it happen the Commission’s and co-legislators’ task is to set the appropriate framework. However, it is eventually companies that bring a more circular and sustainable economy into reality. The REBus project presents valuable evidence that being circular is profitable. At the same time it provides ideas on how to change the regulatory environment to help business get engaged in this transition.”