Commission announces investment boost for circular economy

Incineration Plant in Brno, Czech Republic. [Jaroslav A. Polák/Flickr]

The EU executive announced today (26 January) the first steps towards legislation on the burning of waste for energy, and that it would work with the European Investment Bank to spur financial backing for projects supporting the shift to a circular economy.

The circular economy is a vision of a future where as little as possible is wasted in a world of finite resources and rapid population growth. Supporters argue that the sustainable economic model will create jobs and growth and move the EU away from “throwaway” culture.

For the shift to be successful, new markets, for example in waste sorting, will need to be created across the EU. For that to happen, a reliable regulatory framework is needed, and so is investment.

In 2015, the Commission put forward its Circular Economy Package of waste and recycling laws. The rules, which controversially replaced earlier draft legislation prepared under the Barroso administration, are six bills on waste, packaging, landfill, end of life vehicles, batteries and accumulators, and waste electronic equipment.

Resources will be reused or recycled as often as possible under the strategy. When waste ultimately reaches the end of its possible uses, it could be burnt for energy.

But incineration is controversial because of its environmental impact, possible health risks, and the risk of waste being burnt before truly necessary.

In Sweden, about 50% of waste is burnt for energy. That has been criticised for artificially inflating recycling figures because waste that could be recycled ends up being incinerated. Sweden also imports waste to burn to keep the plants working to capacity.

The Commission has published a communication, often the first step towards binding rules, giving advice to member states on how to turn waste into energy. It calls for an EU waste hierarchy, which demands that the prevention and recycling of waste is prioritised over incineration.

According to the EU executive, the guidance will help ensure a “properly balanced waste to energy capacity” and avoid waste to energy plants becoming stranded assets due to not having enough waste to burn because of better recycling practices.

The Circular Economy Package calls for a common EU target for recycling 65% of municipal waste and 75% of packaging waste by 2030, and there is a binding target to reduce landfill to a maximum of 10% of municipal waste by 2030. Those targets were increased upwards by MEPs earlier this week.

MEPs bolster EU recycling and landfill targets

Members of the European Parliament’s Environment Committee yesterday (24 January) moved to increase draft EU recycling and landfill targets that had been lowered by the European Commission in its re-tabled Circular Economy Package.

The package is currently being amended by the European Parliament and the Council of Ministers, with a view to a final version of the text being finalised by July.

“We are closing the loop of design, production, consumption and waste management, thereby creating a green, circular and competitive Europe,” First Vice-President Frans Timmermans said.

Finance and the Juncker Plan

The Juncker Commission also announced the creation of a Circular Economy Finance Support Platform. The initiative brings together institutional investors such as pension funds, EU officials, entrepreneurs and the European Investment Bank.

Commission Vice-President Jyrki Katainen said, “Our goal is to upscale investment, both public and private, in the circular economy. It very often means new business model and they may require new, innovative ways of financing.”

The platform, which could also involve NGOs, national ministries and promotional banks, will use existing EU financing instruments, such as the Horizon 2020 research programme and the European Fund for Strategic Investments, which is also known as the Juncker Plan.

The Juncker Plan, helmed by the EIB, uses EU money as risk guarantees to encourage private investors to back qualifying projects. The platform will also examine whether new financing instruments should be created, as well as raise awareness of the circular economy and provide technical support.

EIB Vice-President Jonathan Taylor said, “We see the circular economy as key to reversing the course of climate change, making more sustainable use of our planet’s scarce resources and contributing to Europe’s growth.

“To accelerate this transition we will continue to advise and invest increasingly in innovative circular business models and new technologies as well as in more traditional resource efficiency projects.”

The Commission will open a call for expressions of interest for members of an expert group as a first step to establishing the platform.

The amount of investment expected is not yet clear but, according to the Commission in September 2016, the Juncker Plan raised €116 billion in investment in its first year.

The three-year plan hopes to raise a total of €315 billion from €21 billion of EU seed money. The model is being extended to last longer and to spur investments outside the EU, for example in areas hosting large numbers of migrants who may want to head to Europe.

The European Commission also announced a proposal to restrict the use of certain hazardous substances in electrical and electronic equipment.

Alternatives to these hazardous materials were proposed in order to make recycling components more profitable.

Later this year, the Commission plans to take measures on the economics, quality and low rate of plastic recycling and reuse. It will also address the significant leaking of plastics into the environment.

Water reuse is also a priority. There will be a legislative proposal to set minimum requirements for reused water for irrigation and aquifer recharge, aiming to encourage efficient resource use.

Progress towards a more circular economy and the effectiveness of action at the national and EU level will continue to be regularly monitored, the executive said.

Positions

Simon Wilson, Coordinator for Alliance for Circular Economy Solutions, said, "For a real circular economy we need to start by designing out waste, not just cleaning it up. Whilst we have seen some progress on waste policies, on key areas like product design the Commission’s actions fall far short of what is needed."

First Vice-President Frans Timmermans, responsible for sustainable development, said, "Building a circular economy for Europe is a key priority for this Commission. We have made good progress and are planning new initiatives in 2017. We are closing the loop of design, production, consumption, and waste management, thereby creating a green, circular and competitive Europe."

Vice-President Jyrki Katainen, responsible for jobs, growth, investment and competitiveness, said, "Our goal is to upscale investment, both public and private, in the circular economy. This new Platform is an excellent tool to raise awareness of the circular economy projects' immense business potential and, consequently, draw in more funding for their financing."

Ferdinand Kleppmann, President of CEWEP, said, “This Communication created big expectations. It was supposed to use the newest scientific data to help policy makers see WtE for what it is – a strong partner in the Circular Economy and Energy Union. Unfortunately, the resulted text has more basis in political considerations rather than in facts and science."

Ferran Rosa, ZWE’s Policy Officer, said, “We cannot keep wasting our money and resources in subsidising waste-to-energy. Divestment from waste-to-energy is needed if we want to create the right incentives for a circular economy."

EESC member Cillian Lohan, rapporteur of the EESC's opinion on the Circular Economy Package, said, "It is important for Europe to speed up the transition to a circular economy. It must be comprehensive and apply to all sectors."

EESC member Brenda King, President of the EESC's Sustainable Development Observatory (SDO), said,"To achieve quick and practical results we need to have the most important players and transformers - namely civil society - on board."

Martin Siecker, President of the EESC's Section for the Internal Market, Production and Consumption, said, "European stakeholders involved in a circular economy are eager to share expertise and experiences and discuss the most critical aspects of the transition to a resource-efficient economy."

Annick Carpentier, Director General of ACE, said, “The further deployment of renewable materials for packaging will contribute to foster innovation, investments and qualified jobs in Europe. This positive vote will lay the groundwork for a low-carbon economy and reduce dependence on finite primary materials.

The outcome of this vote is also good news and a step forward for increased recycling in Europe. Bolstering separate collection of packaging will generate a further push for innovation in sorting and recycling solutions as well as secure higher recycling rates,”

Background

The Circular Economy package was intended to increase recycling levels and tighten rules on incineration and landfill.

It consists of six bills on waste, packaging, landfill, end of life vehicles, batteries and accumulators, and waste electronic equipment.

Commission First Vice-President Frans Timmermans was been given a mandate from new Commission President Jean-Claude Juncker to cut red tape and deliver “better regulation”.

He told MEPs in December 2014 that he would consult with the Council of Ministers and the Parliament before withdrawing and re-tabling the package.

Waste laws will be binned, despite protests

The European Commission’s decision to ditch the Circular Economy package of waste, recycling and incineration laws, was confirmed yesterday (22 January), despite the objections of the EU Parliament and national environment ministers.

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