Five things you should know about the EU’s Circular Economy Action Plan

EU flag in front of Berlaymont building facadeHere in Brussels, the circular economy is dominating conversations in the EU district. To someone living in the UK, this may come as a surprise: industrial policy has fallen out of favour in Britain. But the Circular Economy Action Plan is the subject of  two or three events every day here. Brussels is a city which loves to talk, but there is more to it than that. Replacing the linear make-use-dispose model with a new approach based on reuse, repair, remanufacture and recycling is being heralded as the new economic driver for Europe.

So here are five things you should know:

  1. It’s the economy, stupid

As Bill, the now less famous Clinton, once stressed, everything comes back to the economy. The Commission has been clear that this plan is an economic policy and, if it is going to succeed, it will be by harnessing industrial innovation and helping the private sector to realise the potential for profits by valuing resources better. That will create jobs and drive Europe’s competitiveness. Environmental benefits will flow from this approach, but it’s the economic arguments that will make it happen.

The employment potential of the circular economy is huge: Green Alliance recently looked at three different European Countries, showing that circular economy policies could take nearly 300,000 people out of unemployment in Poland, Italy and Germany alone, with remanufacturing in particular able to create large numbers of good quality new jobs across Europe. In Britain, work by Green Alliance and Wrap shows that a more circular economy in the UK could provide new jobs for  54,000 people currently out of work.

  1. Resource productivity will enable European manufacturers to compete

By and large, businesses in Brussels buy the idea that Europe will not compete globally by reducing labour costs, but by increasing resource productivity. Figuring out how we can continue to make the things we need with less input is why Green Alliance has convened several influential business networks and think tanks to create ACES: the Alliance for Circular Economy Solutions. These organisations all see the economic potential of the circular economy, and want to help develop the policies that will make sure the Action Plan is a success.

  1. Business needs policy makers to help make it happen

We often hear about how business is opposed to policy makers interfering in the economy. But the right kind of interventions are useful and, indeed, essential, to drive the circular economy.

Take secondary raw materials as an example. Even the most efficient industrial processes generate by-products. And every year huge amounts of those resources fall out of the economy as waste, rather than being reused. One reason is that businesses are not always sure about the quality of the secondary materials they are buying. Is it pure enough for my product? Is it safe? They ask. That’s where policy makers come in, and the Commission has promised action to develop clearer standards for secondary materials, so that the flow of resources can be diverted back into use rather than ending up as waste.

  1. There’s more to it than waste

A lot of the talk so far has focused on waste, where the Commission has proposed draft directives to increase recycling and reduce the amount of waste created. These are currently being considered by the European Parliament and the European Council. But other parts of the plan could be more important.

The best way of keeping value in the economy is to design out waste using ecodesign principles that focus on making products more durable and easier to repair. A two year old smartphone is worth £290 if it can be reused or £180 if it’s repairable. But it’s worth just 72p if it’s melted down to extract the gold and other materials contained within it.

  1. “Everybody has a plan until they get punched in the mouth”

As Mike Tyson once observed, it’s easy to come up with a plan, but more difficult to stick to it in the heat of battle. The Commission is already taking blows over how it will implement the 54 actions in the plan. How it fights over them in the coming months will be the test.

Can it use product policy to design out waste? Can it unlock the market for secondary materials without drowning it in red tape? Can it change the way we use plastics to cut out harmful products like microbeads in cosmetics and single use plastics that end up in landfill or the sea?

ACES will be watching, and making our own suggestions about how to create policies that make the circular economy a reality.

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