The EU’s circular economy package is about a lot more than just recycling

Unemployment and circular economy graphic for homepageA version of this post first appeared on BusinessGreen.

The European Commission this week fired the starting gun on its circular economy programme, and the panoply of documents released shows that it will be a marathon, not a sprint. As you’d expect for a programme designed to usher in a “profound transformation of the way our entire economy works,” it contains 54 separate actions, with deadlines stretching from the end of this month to the end of 2018.

Worse on waste and recycling 
But the key question is whether or not the new 2015 proposals are any more ambitious than those proposed in 2014. The short answer is that they are definitely worse on waste and recycling, but the programme has the potential to be transformative for the inner loops of the circular economy: ie reuse, remanufacturing and selling services instead of just products. It’s these inner loops where the bulk of the jobs, economic value and consumer, as well as environmental, benefits lie.

Areas where the commission deserves praise include new requirements for products to be more durable and easier to repair, which are due to be incorporated into EU ecodesign requirements. The detail of how these are implemented matters enormously, but the direction is clear. Similarly, linking producer responsibility payments to the real costs of recycling will encourage better product design. And the €650 million for R&D is a real commitment to helping European industry increase its resource productivity so it can compete with rapidly growing international competition.

But elsewhere the package is less clear, meaning it won’t necessarily deliver on its potential. Proposals on the bioeconomy are limited to a sharing of best practice, which is code for doing nothing. A proposal to make manufacturers provide repair guides won’t be put forward until 2018, and any requirements will only apply if they are ‘proportionate’, whatever that means. A similar proposal to investigate planned obsolescence will only begin to ‘assess the possibility’ of action in 2018, despite the evidence that white goods and laptops are breaking sooner than they used to. In addition, ecodesign requirements only cover energy related products, not the full range of products that consumers use.

This matters because reuse and repair are much more valuable than recycling. Green Alliance’s analysis shows that an ambitious set of European circular economy policies, mostly expanding repair and remanufacturing industries, could bring 270,000 people across Italy, Poland, and Germany back into work, rising to around 335,000 if you include the UK.

At a micro level, a two year old broken smartphone can be worth a third of its original value if it’s repaired: £170 in the case of an iPhone. But current legislation encourages recycling even though the value of the recovered metals, glass and plastic is worth just 72p. The commission is proposing to do nothing about this for three years.

Politically pragmatic, but is it ambitious?
As to recycling, it’s politically pragmatic to reduce 2030 targets a bit and to give eastern European countries a bit more time to reach higher recycling rates. But it isn’t ambitious. We shouldn’t assume high recycling rates are impossible or even undesirable: the rates for the 554,000 inhabitants of Treviso, Italy, have gone from around 27 per cent to 85 per cent over the past 15 years. They now pay nearly a quarter less for waste and recycling than their northern Italian neighbours. With help from the European Investment Bank, there’s no reason why the rest of Europe shouldn’t be able to reach 70 per cent over the same period.

Focusing too much on recycling targets ignores the breadth of the opportunity to transform Europe’s economy into one which is hugely more productive and less wasteful. This will mean remaking business models, not just recovering materials. The commission has set in place a framework that makes this transformation possible, but it is now up to ministers in the European Council and members of the European Parliament to fill in the gaps in the strategy, and to deliver on the ambition that everyone wants to see.

Green Alliance has recently convened the Alliance for Circular Economy Solutions (ACES), a progressive new collaboration of businesses and think tanks committed to ambitious circular economy policy in Europe. It is led by an influential group of British, Belgian, Dutch and German organisations.

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