Vella: Private sector and Juncker Plan cash can create low-carbon economy

Karmenu Vella at his Commissioner's hearing in the European Parliament. [European Parliament/Flickr]

The European Union’s transformation into a low carbon economy will be paid for by the private sector and, to a lesser extent, funds from the Juncker investment Plan, Environment Commissioner Karmenu Vella has said.

“It is important to note that we in the Commission want in the future to act more as facilitators, rather than purely regulators, so we can help channel the private sector investment into green growth,” he told reporters in Brussels.

The EU is committed to being a low-carbon, circular economy with high quality ecosystems by 2050, under its 7th Environmental Action Programme.

The Commission last week axed the Circular Economy package of waste, incineration, recycling and landfill laws as part of its drive for “better regulation”. It has promised to resubmit a “more ambitious” version of the package before the end of this year.

Vella gave broad hints to some elements of the new laws, including cutting administrative costs for businesses, at a Brussels press conference this week (3 March).

Enormous cost

According to the Commission’s own figures, moving to the 2050 low-carbon economy will cost an estimated €270 billion annually for 40 years. The Juncker Plan aims to unlock €315 billion over the next three years, by offering €21 billion in risk guarantees to private investors.

“[It] will play a very important role when it comes to investment in green growth […] some of the investment package will be channelled into green economy projects, Vella said at a press conference (3 March) to launch the European Environment Agency’s (EEA) five yearly report.

The Commission was looking to the private sector to pick up the shortfall, he added. “The priorities of this Commission are jobs, growth, and investment, but these priorities will not be achieved […] unless the private sector is involved,” he said.

But environmental campaigners are not convinced the private sector will deliver the “systematic” change to models of production and consumption needed.

“Industry on its own won’t drive the transformation needed to move us to a circular economy – otherwise they would have done it already,” said Friends of the Earth Europe’s Ariadna Rodrigo.

“A strong Circular Economy legislative package is needed to give a firm political signal for the long-term, so that investments follow.”

Pieter de Pous, the European Environmental Bureau’s policy director, said, “The Commission is putting more onus on its role as a facilitator than as a regulator. Yet that only reinforces doubts about its commitment to put the necessary, sufficiently ambitious regulatory instruments in place to create a low-carbon, circular economy.”

Parts of the private sector are blamed for the dumping of the Circular Economy package, which was drafted under the last Barroso Commission.

EURACTIV exclusively revealed last year that lobby organisation BusinessEurope called for it to be withdrawn and resubmitted with an “economic” outlook in a kill-list of pending laws it sent to the executive.

>>Read: Gender equality and environment laws on business lobby hit list

EEA report ups pressure

The European Environment State and Outlook report increased pressure on the Commission to ensure its replacement for the ditched Circular Economy package was strong enough to deliver real change.

>>Read: Commission under pressure on circular economy

The EU “remains far” from achieving its goal of a circular economy, a central part of a green economy, the report said.

EEA executive director Hans Bruyninckx said that a citizen born today would be 36 by 2050, when, according to the target, he would be living in a low-carbon, circular economy.

“I think that really illustrates there is a sense of urgency […] we’ve got quite a bit of distance to be covered,” he said.

“This will include substantial new ideas, substantial new business models, substantial new technologies […] that, in and of itself, is already a high level of ambition,” he added.

There was research from the World Economic Forum and the Organisation for Economic Co-operation and Development that showed the private sector could help create a green economy, he said after the press conference.

Circular Economy axed

The Commission last week quietly dropped the Circular Economy package at a meeting of the College of Commissioners, despite MEPs, campaigners and EU environment ministers’ calls to save it.

>>Read: Circular Economy package officially dead

>>Read: Waste laws will be binned, despite protests

Friends of the Earth Europe’s Rodrigo said the decision only delayed urgently needed action to make the economy more resource efficient.

“Commissioner Vella says the Commission wants to strengthen the proposal, but it could have introduced changes without starting the process from scratch,” she said.

Details on the replacement bill have been scarce beyond vague talk of “ambition”, and later, to “closing the circle” by ensuring products were designed to be more easily recyclable.

>> Read: Circular Economy package to be ditched and re-tabled


Vella yesterday expanded on those bare bones, giving broad hints to a business-friendly set of rules. But he refused to speculate on whether the new package would retain the same targets as the old one.

The dropped Circular Economy package included legally binding targets of 70% recycling for municipal waste by 2030, 80% recycling for packaging, such as glass, paper, metal and plastic by 2030, and a ban on landfilling of all recyclable and biodegradable waste by 2025.

Any targets would have to be discussed with other Commissioners and stakeholders, Vella said.

“It is not only about the targets. We are not being more ambitious only by setting targets, […] we want to be more ambitious on the outward side, on the implementation side, on the results side, he said.

Vella said, “We want to be ambitious, focusing on the consumption and production side to make the full circle – that’s why I said half measures are not an option.”

The Commission would address waste and waste reduction at end of life and production. “We want future products to be durable, more reusable, more repairable, and more recyclable as well,” he said.

“We need to create a market for the recycled product. We do have a certain amount of recycling but most of that recycled waste is not finding its way into the production,” he added.

“We want to be more ambitious on reducing the administrative burdens without compromising on the targets, on the goals [of the replacement package],” Vella told reporters.

The Commission would promote the idea of clustering more activities so the output of one industry could be the input of another, he continued.

The industrial system could behave more like an ecosystem, he said.

“In an ecosystem we have the waste of one species being the resource of another species, and the whole idea of a circular economy is to have the waste of one industry being the input of another.”

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 given a mandate from new Commission President Jean-Claude Juncker to cut red tape and deliver “better regulation”.

He said the package would be withdrawn and re-tabled by the end of 2015. Despite the opposition of EU environment ministers and many MEPs, that decision was confirmed at a meeting of the College of Commissioners.

>>Read: Our coverage of the Circular Economy

  • By end of 2015: End of year deadline for re-tabled Circular Economy package.

European Commission

Press release: Environment report shows benefits of EU action

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