€324bn Circular Economy Opportunity Needs Long-Term Support

A new report from the Aldersgate Group out today (14 December), “Beyond the Circular Economy Package”, argues that EU institutions should continue to support the shift towards greater resource efficiency beyond the completion of the Circular Economy Package. 

By introducing a range of new business case studies drawn from several sectors of the EU economy, the report shows that businesses and public organisations are investing significantly in resource efficiency but that the transition to a more circular and competitive economy will take time and requires long-term policy support.

The new research, published by the Aldersgate Group, includes a range of business trials and case studies across several sectors of the economy.

Some of these include pilot projects carried out under the REBus project, which at the end of 2016 saw 28 resource efficiency business pilot projects deliver €5.62m in financial savings and a reduction of materials consumption and greenhouse gas emissions by 62,619 tonnes and 1,953 tonnes, respectively.

“The move to a more resource efficient economy calls for an ambitious policy framework beyond the Circular Economy Package, which will require the active engagement of all stakeholders, from policymakers and businesses to consumers.”

These pilot projects have been carried out across 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.

Research carried out as part of the project found that adopting the resource efficiency business models tested by these business pilots across their respective economic sectors could increase the EU economy’s gross value added by up to €324bn by 2030.

Whilst the resource productivity of the EU economy is improving overall, the report shows that businesses often face a number of barriers to taking greater action, ranging from regulatory obstacles and a lack of effective market signals to difficulties in obtaining finance or technical advice to drive innovation.

Nick Molho, executive director of the Aldersgate Group said: “The Circular Economy Package is delivering welcomed progress on some of the barriers that are slowing down business action on resource efficiency. However, an economy-wide shift to much greater resource efficiency will take time.

“To invest in new business models, more resource efficient processes and new supply chains, businesses need the assurance that the resource efficiency agenda will remain a priority for the EU in the long term.”

Long-Term Policy Action

Building on the progress that has been made to date by the Circular Economy Package, the report identifies six key areas of long-term policy action for the Commission and its co-legislators, including:

  1. Pursuing work to include resource efficiency design criteria in product standards by delivering on the commitment to publish an updated Ecodesign Working Plan once a year and rapidly broadening the range of products subject to resource efficiency design criteria;
  2. Promote business innovation on resource efficiency, through continued financial support for business trials and broadening the sectors that receive technical support through the Commission’s Innovation Deals;
  3. Expand the use of circular economy criteria in the public procurement of a broadening range of products and encourage their application across EU Member States and EU institutions;
  4. Encourage Member States to develop pricing mechanisms that support material re-use where it is environmentally effective to do so;
  5. Ensure a consistent implementation of the Circular Economy Package in different Member States. This is especially important in terms of the improved definitions of “waste” currently being negotiated by all three EU institutions, which must ensure that materials are no longer classified as “waste” when they can be re-used safely.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The transformation towards more resource efficient business models is not a matter of choice but a necessity for retaining competitiveness. With the comprehensive Circular Economy Action Plan, the European Commission intended to address the key regulatory and financial challenges to facilitating this transition.

“But this is just the beginning. The move to a more resource efficient economy calls for an ambitious policy framework beyond the Circular Economy Package, which will require the active engagement of all stakeholders, from policymakers and businesses to consumers.”

For the full report CLICK HERE

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