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EU's green economy roadmap meets criticism

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Published 10 October 2011

The European Commission's roadmap for a resource-efficient Europe does too little to address environmental concerns, argue green campaigners while businesses have criticised it for ignoring the benefits eco-industries bring to the environment.

The European Commission's resource efficiency roadmap, unveiled in September, suggested decoupling economic growth from natural resource use.

Europe's economy is threatened by growing competition for natural resources – including energy, water or minerals – it warned, suggesting a complete transformation of the way our society produces and consumes manufactured goods.

A leaner, more efficient industry would be better insulated from external shocks like sudden rises in commodity or energy prices, the Commission argued, and would therefore also reduce costs for businesses.

Environment Commissioner Janez Potočnik refuted claims that the Commission had shied away from proposing binding objectives, saying the roadmap did not contain targets because there had not been enough time to carry out impact assessments.

Gerben-Jan Gerbrandy, a Dutch liberal MEP who is drafting the European Parliament's position on the roadmap, agreed: "I am in favour of targets but smart ones, and I don't think we have them yet," he said.

Under the roadmap, targets should be agreed by the end of 2013 with the aim of steering company's investments towards eco-innovation.

Choosing the right indicators

Potočnik also underlined that in order to propose targets, a consensus needs to be reached first among experts on which indicators are the most suitable for monitoring progress.

Work has already started, with examples including consumption based indicators on land, materials, water, carbon or energy. Life cycle-based indicators are also being developed by the Commission's Joint Research Centre with first results expected by the end of 2011. An assessment of existing resource use indicators should be ready by early 2012.

But before agreement is reached on the best indicators, the EU executive suggested measuring progress immediately by introducing a "resource productivity" indicator that would measure GDP against material consumption expressed in euros per tonne.

Environmentalists have criticised the indicator, saying it ignores land, water and carbon footprints. Businesses have also complained, claiming that the indicator should also take into account the environmental benefits of raw materials use, not just the damage.

Product footprint

The roadmap also seeks to address the environmental footprint of products, building on an ongoing assessment due in 2012. This could be done for example by expanding the scope of the EU's Ecodesign directive to non-energy related products.

While business stakeholders generally welcome the idea, some stress that the EU executive should be careful when assessing the environmental performance of products, such as their ability to be recycled or reused.

The European Aluminium Association (EEA) for example notes that "recycled content cannot today be considered as a relevant indicator to predict which product will be most recyclable in the future".

Indeed, although metals are infinitely recyclable, they may sometimes not be recovered after decades. According to the European Environment Agency, aluminium has a life-cycle of up to 80 years in buildings for example.

For this reason, the metals industry is insisting on considering the whole life cycle approach when it comes to assessing the environmental footprint of a product.

Green taxation

In one of its potentially most controversial aspects, the Commission roadmap also suggests shifting taxation away from labour to resource use. Green taxes, it argues, are ultimately the only way to bolster a shift to a resource efficient economy.

The Greens in the European Parliament are calling for the Commission to come forward with a "Resource Taxation Directive" to "send a clear signal for investors". This could be done for example by broadening the scope of the existing Energy Taxation Directive.

However, taxation is always going to be controversial as EU action on the matter needs unanimity among member states, which keep the last word on taxation matters.  

Business groups too tend to look with scepticism at any taxation initiative. The European Steel Association (Eurofer) prefers to place the emphasis on "technology-related measures", such as improving the recyclability of products at the design stage.  Life cycle-based decision-making are "more applicable to manufacturing industries than price signals introduced by caps or taxes," it said.

On the consumer side, the European organisation BEUC says the Commission should coordinate ecological tax policies at national level and suggests introducing reduced VAT rates for green products and services.

A joint proposal to reduce VAT rates for green products was put forward by France and the UK in 2007 but it did not win enough bakcing from other EU countries to move forward. BEUC does not give up on the idea and hopes the Commission will revive it when it reviews its sustainable consumption and production action plan in 2012.

Waste as a resource

One thing that everybody seems to agree on is to promote waste as a key resource in the EU's future economy.

But in order to feed waste back into the economy as a raw material, better functioning waste sorting and collection is a must while landfilling must be curbed.

Furthermore, products need to be designed for recycling in the first place, so that different resources can be more easily extracted when dismantled. Investments in modern facilities for waste treatment and high quality recycling are needed as well, stakeholders said.

Positions: 

Meeting in September, EU Industry Ministers highlighted the potential of the internal market as one of Europe's most important assets "which should be fully exploited to deliver more sustainable growth and resource efficiency," emphasising the need "to include these topics in consumer policy" as well. The ministers also stressed that it is particularly important to ensure that "the framework conditions for companies across the EU support their competitiveness and their transition towards greater resource efficiency".

Andrzej Kraszewski, Polish Minister of Environment said that economical and efficient use of resources also means to fight the "disposable character" of things – using things once and throwing them away – and to stop living on "ecological credit".

The Greens in the European Parliament regret the absence in the Commission’s roadmap of clear targets aimed at improving resource efficiency and new concrete measures that can be implemented immediately. Dutch Green MEP Bas Eickhout noted that "Europe is the region most dependent on imports and, clearly, reducing our absolute consumption of imported resources should be an urgent priority now the era of cheap and plentiful resources is over."

But he was doubtful of that "the voluntary approach outlined by the Commission will suffice to realise a resource-efficient Europe."

The Greens believe that shifting taxation from labour to resource use is one way of promoting more efficient use of resources but regret that the Commission failed to present clear proposals to this end.

The group believes that the Commission should come forward with a "Resource Taxation Directive," such as by broadening the scope of the existing Energy Taxation Directive, which, it believes, "would send a clear signal for investors and ensure greater resource efficiency."

Tony Long, Director of the WWF’s European Policy Office, argued that putting Europe on a road to resource efficiency "is not a luxury in these economically straightened times – it is an absolute necessity. European economies face nothing less than an economic transformation if the engines of economic growth are to start turning." While the Commission’s Resource Efficiency Roadmap "is a step in the right direction" it is only a roadmap and "for the real transformation towards greener economies in Europe, it will be legislation, policies and new financial instruments that will make the difference," Long went on.

Pieter de Pous, policy director at the European Environmental Bureau (EEB), an green NGO, added that "either we will regulate the EU to become a resource-efficient economy or we will keep on dreaming about it."

"The EU’s eco-design directive has shown its value in reducing the consumption of energy resources of products. If it is to do the same for all resources, it will require the adoption of binding targets," the EEB believes.

Friends of the Earth Europe (FoEE) said the roadmap "does not go far enough" in putting and end to Europe’s dependency on imported resources or to end "the region’s over-consumption of the world’s water, land and other materials". Ariadna Rodrigo, FoEE’s resource use campaigner said that "Europe’s resource consumption is amongst the highest in the world. Our dependence on imports from the rest of the world is expensive for companies and consumers and is harming the environment and communities in the global south. Europe urgently needs to cut out waste and focus on quality of life, not excessive consumption – today’s roadmap doesn’t measure up to the task at hand." FoEE also regretted that the ‘resource productivity indicator’ that was selected in the  roadmap, "only considers the weight of material resources – ignoring land, water and carbon footprints and their subsequent social and environmental impacts".

Michelle Wyart-Remy, secretary general of the Industrial Minerals Association (IMA-Europe), criticised the Commission's roadmap, saying that "using less is a very limited approach to eco-efficiency." Industrial minerals, for example, may enable savings in the downstream sector so "it is not by looking at how much you use that you will know how much you gain," she said.

"Sometimes you need to assess how the resource is of benefit to the particular usage you want to have, and you look at how it may reduce the energy consumption of the end application, how it may reduce the water consumption or how it may reduce the GHG emissions. So to achieve the manifold objective you have to make a selection of the best resource - not necessarily the one you will use in less quantity. A ton of platinum is not achieving the same performance as a ton of talc. So it is not a question of mass and volume – it’s the question of the lifecycle."

Umicore, a Belgian-based global leader in waste recovery and recycling, welcomes the roadmap "well in line with World Business Council for Sustainable Development Vision 2050 to which we contributed. Umicore is eager to work with the rest of the supply chain to better understand the material flows. We encourage the Commission to work at developing appropriate indicators before introducing targets. There is strong need to discuss with all levels of society the appropriate economic instruments that will promote resource efficient behaviour while not hurting the economy and the competitiveness of European industry."

The company is advocating a move from the traditional waste business to quality high-tech recycling in order to close the loop on all materials. Stephan Csoma, Umicore's senior vice-president of government affairs, explained that recycling is made possible due to the value attributed to waste, or because the volume of waste, which includes vehicles at the end of their lives, is such that society cannot cope with it.

For Csoma, it would still make sense to recycle scarce and critical raw materials even though the process is not economically viable, because doing so would contribute to the EU's resource security.

The European Steel Association (Eurofer) welcomed "the balanced approach" of the roadmap, which, it said, "demonstrates that technology-related measures based on Best Available Techniques or benchmarking are more applicable to manufacturing industries than price signals introduced by caps or taxes."

"By emphasising design for recycling, recyclability of materials and life cycle-based decision-making the Roadmap provides the means to make the correct technology and material choices," it said.

Eurofer director general Gordon Moffat said that "steel fits perfectly to this roadmap because the material is not only indispensable for high-tech and daily life products which build the basis of prosperity in Europe - but it is also endlessly recyclable without losing its properties."

The European Aluminium Association (EAA) also highlighted the properties of aluminium that can significantly contribute to resource efficiency, "namely endless recyclability, life-cycle perspective, and efficiency in the use phase".

"In addition to saving up to 95% energy and greenhouse gas emissions compared to primary production, aluminium has the great advantage of being infinitely recyclable without a corresponding loss in quality," said Patrick de Schrynmakers, EAA secretary general. The EAA also welcomes the proposal to establish a common methodological approach to display and benchmark the environmental performance of products over their life-cycle (environmental footprint).

However, the EAA "strongly encourages the EU institutions to use the right parameters when assessing the environmental performance of products. In particular, recycled content cannot today be considered as a relevant indicator to predict which product will be most recyclable in the future. Rather it is necessary to look into the end-of-life recycling phase, in order to see the complete picture of the whole product lifecycle."

Such an approach is needed because aluminium has a "very long life-cycle – between 10 and 20 years in transport and between 50 to 80 years in buildings," it said, noting that currently more than 70% of the aluminium ever produced is still in use.

Eurometaux, the European Association of Metals industries, welcomed the roadmap’s strong focus on recycling and said it feels that the specificities and performance of the non-ferrous materials can "significantly contribute to a resource-efficient and more circular economy". It also welcomes the development of correct indicators, given that they are based on "a true understanding of the material flows and of the industrial value chains" and that any targets are defined through a constructive dialogue with stakeholders on that basis.

Eurometaux said it was concerned however about "the end-of-waste criteria, which in our view are opening the door to more exports of valuable materials outside Europe - and hence to less recycling in Europe."

The Nickel Institute also noted that it is important that true life cycle thinking is the basis of a resource efficiency roadmap, and that both impacts but also benefits from using resources are taken into consideration.

While the roadmap mentions life cycle thinking, it often talks only about environmental impacts occurring in parts of the life cycle. "Many raw materials such as nickel have a certain environmental impact occurring during their production and manufacture, but they also create a lot of environmental benefits during their use and when being recycled," it stressed.

The Nickel Institute was sceptical of the roadmap’s long term objectives on "zero waste" and "full recycling", saying these "are neither achievable nor will they create benefits for the environment and economics". "Primary supply and recycling complement each other, not only presently but also in the future."

The Nickel Institute thus supports "meaningful targets on recycling, knowing that roughly a third of the global nickel use already is covered through nickel recycling".

PlasticsEurope, the trade association representing the European plastics manufacturers, welcomed the roadmap’s focus on the life-cycle approach and on treating waste as a valuable resource.

"The plastics industry is committed to contributing to Europe’s resource efficiency by promoting the use of plastics in insulation, packaging, and transport; by developing innovative sustainable applications for its products and by promoting best practice in recycling and energy recovery," said Wilfried Haensel, PlasticsEurope executive director.

The association also fully supports the goal of the EU to eliminating landfill in Europe by 2020 and is calling for better enforcement of existing European legislation in this area, in particular in relation to plastic waste.

CEFIC, the European chemicals industry trade group, said it believes the chemical sector "is squarely placed to hold a leading role to more effectively use the planet’s limited resources." It said that the roadmap opens up opportunities for innovation – an area where the chemicals industry sees itself in a leadership position.

The chemical industry "is poised to have a lead role through a concrete public-private partnership in cooperation with other European process industries. In addition, advanced materials produced by the chemicals sector help address efficiency challenges faced by the housing and transport areas," CEFIC stated.

Willy De Backer, head of the Greening Europe Forum at Friends of Europe, a Brussels-based think tank, said the roadmap "is probably one of the better sustainability policy proposals to come out of the Commission lately, but it still has some major flaws."

"The diagnosis of the resource predicament is excellent but the remedies are still too much inspired by the traditional economic growth paradigm and the Commission still ducks the question of the ecological and energetic limits to growth."

De Backer said the roadmap still clings to the "ideological obsession" of economic growth and keeps betting on the myth of "decoupling" although lots of studies provide enough scientific evidence that absolute decoupling is not possible.

Next steps: 
  • By the end of 2011: JRC work on environmental impact categories based on life cycle analysis data for the full production and consumption chains should deliver first pilot results.
  • Early 2012: An on-going study on the assessment of resource efficiency indicators and targets is investigating the feasibility of various options and should be ready to present results.
  • 2012: Review of the EU the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan (SCP-SIP).
Outi Alapekkala
Background: 

Resource efficiency is one of the seven flagship initiatives adopted under the 'Europe 2020' strategy for growth, agreed by EU leaders in 2010.

The concept relates to decoupling economic growth from natural resource use – be it raw materials, commodities, water, air or natural ecosystems.

In January 2011, the European Commission adopted a first policy paper on the topic, which established resource efficiency as the guiding principle behind EU policies in almost all economic sectors – including energy, transport, climate change, industry, commodities, agriculture, fisheries, biodiversity and regional development.

In September, the EU executive followed up with a Roadmap for Resource-efficient Europe, suggesting indicators to measure the EU's use of natural resources.

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