Europe goes circular
It's been three years since the E.U. instituted its circular economy strategy, and the concept has gone from being a fringe topic to mainstream thinking. But it isn't being applied to the energy sphere

In 2015, when the European Commission first put forward its Circular Economy Action Plan, the concept was so unknown that Commission Vice President Frans Timmermans had to explain it to a befuddled press corp. “Our planet and our economy cannot survive if we continue with the ‘take, make, use and throw away’ approach,” he said as he unveiled the package. “We need to retain precious resources and fully exploit all the economic value within them.”

The idea is to transition from the “throw-away economy,” where we use something once and then dispose of it, to a circular economy where everything is reused. The system regenerates, and energy and material loops are closed. The main tools to achieve this are recycling, reuse and refurbishing, as well as the use of renewable energy.

A painless revolution

Over the past three years the concept, once obscure, has turned into one of Europe’s hottest buzzwords. Its particular promise to businesses, consumers and policymakers alike is that it can enable a sustainable transition without a significant change to quality of life or revenue. In fact, the system’s ability to save resources and eliminate waste can result in serious profit.

“When I started working on plastics five years ago, I thought it was a bit of an ugly topic and nobody wanted to talk about it,” says Jean Pierre Schweitzer, a product policy and circular economy officer at the European Environment Bureau. “But now there’s been a huge take up of the topic, and it seems like there are constantly events in Brussels and across Europe on the circular economy. So in terms of supporting the concept, and bringing resource productivity onto the agenda, it’s been a real success.”

The Commission has said implementation of their circular economy strategy could create 170,000 jobs and bring a net savings of €600 billion for businesses in the E.U. According to the consultancy McKinsey, the policy could deliver a net economy benefit of €1.8 trillion by 2030. That value is generated in all parts of the circle, from production to waste.

The strategy also looks anew at some materials which many have come to view as old fashioned. Traditional industrial products like steel, glass and aluminium are usually not considered environmentally friendly. But because they lend themselves so easily to reuse, these materials are going to be much better for the environment and climate than newer, harder-to-reuse materials like plastics.

The legislative proposals in the package will also create new design requirements for producers, ones that will make their products more easily reusable and recyclable. Though some European producers have bristled at these new requirements, the Commission says the new design requirements create a market opening for new production technologies and materials, changes which can give European companies an edge. Making products easier to disassemble will also make it easier for manufacturers to retrieve and reuse them, saving money.

The strategy also set out new recycling requirements, setting a common E.U. recycling target of 65 percent of municipal waste by 2030, and 75 percent of packaging waste by 2030. Today only around 40 percent of the waste produced by E.U. households is recycled.

New proposals

Earlier this year the Commission came out with new proposals as part of the strategy, mostly targeting plastic waste. They proposed to ban single-use plastics like drinking straws and cups by 2021 and to require that all plastic be recyclable by 2030. On 24 October, the European Parliament voted to strengthen this proposal, expanding the list of banned plastics and requiring E.U. countries to recycle 90 percent of plastic bottles by 2025. National governments are now preparing their own vote on the proposal, and negotiations to craft the final version of the legislation will begin in the coming months.

The goal is to prevent these plastics from ending up in oceans as marine litter as 70 percent of such litter is made up of plastics. Separately, the Commission has proposed a reform of rules for port reception facilities, to reduce the leakage of plastics into the environment. Every year, Europeans generate 25 million tons of plastic waste, but less than 30 percent is collected for recycling. This waste is entering the atmosphere, and its effect on human health is not fully understood.

“With our plastic strategy we are laying the foundations for a new circular plastics economy and driving investment towards it,” says Jyrki Katainen, the commissioner responsible for jobs, growth, investment and competitiveness. “This is a great opportunity for European industry to attain global leadership in new technology and materials.”

The Commission has also proposed a new monitoring framework on progress towards the circular economy at the E.U. and national level, a framework composed of a set of ten key indicators which cover each phase production, consumption, waste management and secondary raw materials as well as economic aspects and innovation.

Finally, the Commission published a report on critical raw materials, highlighting the potential to make use of the 27 critical materials floating around the European economy. The report calls for strengthening Europe’s waste legislation, known as Waste Electrical and Electronic Equipment (WEEE), in order to increase take back schemes.

This last report is of particular interest to the appliance sector, which has been working to try to improve recovery of the valuable metals and materials in their products. Paolo Falcioni, director general of the European appliances manufacturers association APPLiA, says that until recently these waste laws were not considered part of a larger circular system.

“We can reach a circular economy only if we consider it part of a wider circular society where each actor has a role to play,” he says. “We as an industry started to deal with this long before this strategy, and WEEE pushed to have the sector deal with waste. But the sector can’t succeed by itself, and we need the cooperation of citizens. Today, 17 percent of appliances end in the waste bin, with a loss of valuable raw materials. Two thirds are not traced, so we don’t know how they are treated. We need the authorities to help us to understand where the heck they go.”

Circular Economy 2.0

As the 2018 proposals work their way through the legislative process, people are already talking about what comes next. The commission of Jean-Claude Juncker will finish its five year term next year, and it is unclear whether his successor will promote the circular economy concept as enthusiastically. But civil servants within the Commission assume that the next Commission will continue the work, and there are still many uncertainties for various stakeholders. Because even with the new legislation of the past three years, there are still significant unanswered questions.

“There have been some areas where the progress has been very slow and it’s not clear what the vision is,” says Schweitzer. “On eco design, promoting repair and reuse, the commission has made a statement about where they want to go but not much has happened. There have been other issues like food waste that have been stated as important in the circular economy but we haven’t seen any action.”

But he says that more than producing specific proposals, the Commission needs to lay out a clearer overall vision of where it’s going. “It’s a bit like the terms ‘sustainability’ and ‘circular economy’ can also be interpreted in many different ways by different actors. My personal perspective is that it should really be about reducing the use of materials. If that’s the case, is that really where we’re going in Europe?”

“The question is, on a very macro level, what’s the real objective for the circular economy and where do we want it to go? Recycling targets are valuable, but are they linked to big picture issues like planetary boundaries?”

Falcioni agrees that the new commission would be well advised to revisit the big picture when it takes office next year, and to broaden the approach to all parts of the waste value chain. “It’s important to us that the same environmental standards are followed consistently by everybody who touches waste, and that is not the case today,” he says. “We need help in making sure that environmental standards are followed consistently, and that is not the case today. Unfortunately too often here we are falling between the cracks.”

Circular energy

So far, the E.U.’s circular economy approach has revolved around materials, resources and waste. But it has largely steered clear of the energy sector. Emissions reductions have been dealt with as a separate area of legislation, and Schweitzer believes this is a mistake.

“Renewable energy is really the basis of a circular economy, and I don’t think there’s any discussion of that,” he says. “Everyone is agreed that we need to transition to renewable sources as quickly as possible. What I don’t think has happened so well is the connection of the agenda on the circular economy and the agenda on climate change. These two topics could be very nicely coupled.”

“When the l’Intergovernemental panel on climate change (IPCC) called for system transition on an unprecedented scale, that really calls for a circular economy. But a lot of work on the circular economy ignores the climate aspect, the emissions you could save. And lots of the work done on the circular economy ignores the fact that you can save a lot of emissions by reducing the consumption of resources.”

In the E.U., roadmaps toward emissions reduction have focused mainly on increasing energy efficiency and deploying low carbon energy sources. But when it comes to industrial emissions, these measures would only offer a partial solution.

A recent report on the circular economy released by the Stockholm-based consultancy Material Economics concluded that a more circular economy can make deep cuts in emissions from heavy industry. In an ambitious scenario, as much as 296 million tons of CO2 per year in the E.U. by 2050, out of 530 in total, and some 3.6 billion tons per year globally, could be avoided.

Demand-side measures alone, the report concludes, could get Europe more than halfway to net zero emissions from E.U. industry, holding as much promise as those on the supply side. At the same time, the measures are economically attractive as they produce more efficiency and greater profit.

Despite this opportunity, most discussions about industry emissions have focussed on the supply side, the reduction of emissions from the production of things like steel, cement and chemicals. If the E.U. could make better use of the materials already produced, it would reduce the need for the new production which causes emissions.

In fact, the report concludes, it is unlikely that the goal of the Paris Agreement keeping global temperature rise to less than two degrees Celsius by 2050 can be met without transitioning to a circular economy. The IPCC has estimated a remaining “carbon budget” for this century of around 800 billion tons (Gt) CO2. The report concludes that based on current trends, materials production alone would result in more than 900 Gt of emissions. Energy efficiency and low carbon energy will help, but do not resolve this dilemma: emissions add up to 650 Gt even with rapid adoption of these changes, as much carbon is either built into the products themselves and then released at their end of life, as is the case for plastics, or is used in the process of production.

But a lack of circular thinking is holding back these solutions, even though these abatement opportunities are low cost or even profitable, the report says. Product manufacturers lack incentives to enable high value recycling several steps later in the value chain, and many externality advantages of sharing business models are not accounted for. A higher carbon price would help, they conclude, but capturing a large share of the opportunities will require addressing those barriers directly.

The role of renewables

Schweitzer wants to see the lessons of the report taken up by the Commission, and he believes this should include incorporating the E.U.’s Renewable Energy Directive into the strategy. This would involve linking reducing material use to reducing energy use, and seeing both as part of an overall system of reuse. Fossil fuels are, after all, materials themselves, and in the long term, these materials will be far more damaging than plastic straws.

But such a rethink could put some of the E.U.’s energy strategies at risk. For instance, it’s hard to see how carbon capture and storage (CCS), an unproven technology which would capture the carbon emissions from fossil fuel power plants and factories and store it underground, would fit in with a strategy to use less and reuse more. Fossil fuels, in the case of CCS, are still just being used once. This is why linking E.U. energy policy more closely to the circular economy, Schweitzer says, would result in a more renewables-focused strategy.

The United Nations Framework Convention on Climate Change, which administers the Paris Agreement, has already begun looking at the circular economy as a way to reduce emissions. Last year’s annual climate summit in Bonn saw some sessions devoted to the topic, and even more are planned for this year’s summit in Poland. As the new Commission takes shape next year, various stakeholders will be waiting in line to impress upon the new commissioners their vision for the Circular Economy 2.0. As the strategy broadens beyond just plastics and waste, it could result in a fundamental shake-up of how Europe operates in many sectors.


Dave Keating
Former editor of, is an American journalist based in Brussels. He covers EU politics and policy, focusing on energy and environment issues.