Will the EU’s new circular economy plans live up to expectation?

illustration europeA version of this post first appeared on BusinessGreen.

After months of speculation, we will soon have clarity on a debate that’s been rumbling on for months. No, I’m not talking about who’s going to run the country, but what the European Commission means by a “more ambitious” circular economy package.  This is the set of policy and regulatory measures proposed by the Commission to minimise waste and make the most of the economic opportunities from repair and recycling across Europe.

The opportunity to jump start a new era
The Junker-led Commission withdrew the last package in an effort to prove their deregulatory credentials. This was met with such widespread condemnation that they promised to bring back something better and, since, every utterance from the Commission officials involved has been pored over for clues of what ‘better’ might look like. Thankfully, the rune-reading has an end in sight. The Commission is due to publish a set of draft proposals at the end of this month.

The stakes are high. A progressive package could jump start a new era of product and material production and consumption, just as European vehicle and appliance standards have had a major impact on global markets. By contrast, a weak package would send a signal to business that political momentum has been lost, discouraging investment. But, in either scenario, ambitious member states could and should work together to make the most of the opportunities from a more circular economy.

Elements needed for a strong policy package
Different member states have very different starting positions, compare Romania’s one per cent recycling rate to Germany’s 65 per cent. The challenge of setting targets that would require an unprecedented rate of improvement in some European countries highlights the need for a more tailored approach. But there are some things the new package ought to contain that should be applied across every country. One of these is design standards to ensure that products are long lasting and easy to repair and recycle. Another is measuring what counts as recycling based on the amount of recycled material that gets put back on to the market, rather than the weight of material collected, to ensure collection systems have quality as well as quantity in mind.

Agreeing these Europe-wide measures would deliver economies of scale and support the remanufacturing, repair and recycling markets. Guaranteeing a supply of suitable products for a circular economic system increases financial returns from collection systems and gives businesses the confidence to invest in remanufacturing and reprocessing infrastructure or to use second life components or materials.

The North Sea Resource Roundabout
There are also other areas where member states already have the opportunity to support economies of scale and create new markets. To explore these opportunities, Green Alliance co-hosted a conference with the Dutch Embassy in London. This focused on how member states can work together to support circular economy business models. In particular, it launched the idea of a North Sea Resource Roundabout (NSRR), which would see a group of northern European countries working together to agree harmonised definitions and practices to promote trade in leasing services or remanufactured and recycled products. A good example of this is the Environment Agency’s collaboration with its Dutch counterparts to develop a shared approach on end of life criteria that would make it easier for Dutch and British companies to trade by-products and products made from waste materials.

The next step for the NSRR is to identify what products, materials and regulatory mechanisms it should focus on. Given that five of the top ten countries in the European recycling league table have a North Sea coast, this shouldn’t be difficult and there shouldn’t be a shortage of skills, experience, technologies and products to share.

This greater co-operation and harmonisation between member states should be in addition to, not instead of, encouraging a Europe-wide circular economy policy. There are some single market requirements, like product standards, that need to be instituted at a European level. But for areas where the Commission has decided member states are better placed to act, or where European processes are painfully slow, there’s an immediate opportunity for ambitious member states to get ahead and work together to make life for business easier, lowering regulatory barriers to trade and investment. Significantly in the context of the general election, this is an approach that should appeal to whoever forms the next government, whatever they think of Europe.

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