EU seeks common framework for Circular Economy

SPECIAL REPORT / Changing business models and throw-away habits may take time. The European Commission wants to speed up the process with binding targets for recycling and public procurement in a Circular Economy package expected in July.

Enhancing business engagement is considered critical in the quest for a lean resource economy. This point has been largely highlighted at a Green Week event in Brussels, though views differ on ways of achieving it.

“In 2002 we reached a turning point for commodities prices, which reflect the fact the resources are scarce,” said Jocelyn Bleriot, from the Ellen MacArthur Foundation.

According to the WWF, the world economy currently needs more than 1.5 time the resources the planet is able to produce today.

The MacArthur Foundation has been a strong advocate of the circular economy since its launch in 2007. Its focus is now on the technical conditions to reach it, and the different strategies to adopt for value creation.

“Recycling is not the only way out. We need to think of reuse, prolongation of (the) life of products, and also enhance business models,” explains M. Bleriot.

Selling services rather than products

Rather than selling products, companies should think of how to offer a service, Bleriot says.

Renting, for example, may allow enhancing life cycles. Enabling access to products over ownership also means organizing take-back systems and infrastructure or logistics, and facilitating cross-sector collaboration.

However, industrial policies remain local, and calls for a proper European industrial policy on the subject remain isolated.

Need for clarity

Regarding the need for regulation, opinions get rather polarised.

“Recycling is not just about scrap metals” Bleriot says. The End-of-waste criteria, supposed to organise the recycling of critical raw materials, do not involve enough materials according to environmentalists. Piotr Barczak from the European Environmental Bureau (EEB) says packaging, for instance, represents a major issue.

“The packaging waste directive is very old, it needs to be reviewed. This should be included in end-of-waste criteria, because packaging is not decreasing, it's growing ! We’re still a throw-away society,” he said.

A lot of hope stands in the Circular Economy Package planned for July by the European Commission, as “regulation is not clear for anyone at the moment,” according to Jocelyn Bleriot.

Old policies criticised

Some speakers also questioned the rationality of existing European policies.

Sebastien Godinot from the WWF pointed out the high price of creating jobs through the Common Agricultural Policy (CAP). A job created through the CAP costs more than €250,000 per year, as the whole system leverages land prices. Whereas a job created in the resource-efficiency sector represents more value for money, he says, as it can be financed with €50,000. Renewable energy jobs need the same amount of investment, he said.

Some speakers also stressed the need to cut subsidies for fossil fuels, which were three times bigger than subsidies for renewable in 2012, according to the European Commission. The same point was also highlighted by the EU's Environment Commissioner, Janez Poto?nik.

>> Read : Poto?nik: ‘Subsidies to energy and water use raise barriers to a circular economy’

How to get the numbers right

Accounting issues might also be a way of taking resources into account.

Jean-Paul Albertini from the French environment ministry reminded that waste statistics and accounting rules were very different across EU member states, preventing any real comparison. The harmonisation of waste and landfilling data, according to Albertini, should be a priority in the fight for slimming waste production.

Regarding accounting issues, Sebastien Godinot underlined the need to add externalities in GDP accounts, as natural resources expenditures are not currently included in the cost of economic growth. He insisted on the need to internalise those costs through legislation, citing biodiversity and carbon footprint.

The same point was also stressed by William Neale, a member of Poto?nik's staff. He reminded the audience that Germany already calculated the weight of waste related to GDP, and that other countries should do the same.

Including resource efficiency targets in the United Nation's post-2015 Millenium Development Goals was also stressed. This would encourage Europe, and developed countries, to join the MDG scheme, in which they are not yet included.

Binding targets

William Neale also gave indications as to how the July Circular Economy Package will look like.

“We kept the waste hierarchy, it’s still legitimate. But the scope of the package to come should be broader than waste,” he said.

He also said that a binding target of 70% of waste recycling could be a good option, and that the idea of targeting zero landfill was a good idea. “If some EU members can do it, we need to try to generalise it in the EU. Germany, the Netherlands and Sweden have the best record when it comes to recycling and avoiding landfill and incineration of waste.”

Piotr Barczak from the European Environmental Bureau (EEB) said the zero waste economy should be given a chance in the Commission package. “Even if it’s unachievable, it’s a path to take, and we do need to oblige the member states to create facilities for recycling and stop using landfills.”

The package should also provide a resource efficiency target for public procurement, Neale said. This is the most ambitious part of the package, as a third of the European economy relies on public contracts.