Published 2020-03-17

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EU circular economy plan: some good features but not enough clout

The European Commission has launched its action plan for a circular economy. But creating an economic system within planetary boundaries calls for more measures focusing on consumption of, and demand for, natural resources. The roles of member states, regions and urban areas, too, are crucial in bringing about change. This is the message in a new analysis of the EU action plan, to which Mistra has contributed.

Delivering a circular economy within the planet’s boundaries: An analysis of the new EU Circular Economy Action Plan, from the Stockholm Environment Institute (SEI) and the Institute for European Environmental Policy (IEEP) with contributions from, for example, the Mistra REES (Resource-Effective and Efficient Solutions) research programme, has now been submitted to the European Commission.

Mia Pantzar, IEEP analyst and principal author of the analysis.

‘With this analysis, the hope is that the Commission, Parliament and Council of Ministers will also consider natural-resource consumption and demand, now that they’re going to propose and adopt specific measures and incorporate them into the new action plan for the circular economy. Up to now, the focus has essentially been on making products and production greener, and on consumers having access to the right information to be able to make more sustainable choices. We don’t think that’s enough, if the ambition is to achieve an economic system within planetary boundaries,’ says Mia Pantzar, IEEP analyst and principal author of the analysis.

Mistra works to strengthen the connection between evidence-based research and the advanced knowledge needed in society and politics. This is being done, in particular, through the Mistra Dialogue initiative, which is creating opportunities for researchers and decision-makers to get together.

‘With our researchers’ help, we contributed feedback to the action plan when it was being prepared by the Commission, and we also helped in the analysis of the final plan by IEEP and SEI. We now hope the EU decision-makers will take heed of the recommendations and tighten up the measures further in decisive respects,’ says Thomas Nilsson, Programmes Director at Mistra.

Demand for circular public procurement may have repercussions

Berlaymont Building in Brussels.

Mia Pantzar sees a challenge in maintaining the focus on the Commission’s Green Deal aspirations, and in pursuing a European economy that is more equitable, gender-equal and within planetary boundaries, not least because of the extreme situation engendered by the coronavirus.

In her opinion, the EU’s forthcoming package of stimuli should be carefully devised to foster further development of an economy that is sustainable in the long term, and to divert society away from the throwaway model.

But the action plan also has a silver lining. Above all, Pantzar emphasises the Commission’s focus on design, which calls for a transformation of current value chains based on maximising production of goods of minimal durability that cannot even be repaired.

The Commission proposes various measures, such as extending the ecodesign requirements currently applying to energy-related products to other product groups as well. Other proposals involve tightening up current stipulations concerning the durability, reparability and reuse of products — and not only their energy efficiency, but their resource efficiency too.

‘I also see opportunities in the Commission’s explicit ambition to gradually switch from voluntary guidelines on “green”, circular public procurement to imposing minimum requirements instead. Publicly procured goods and services account for a large share of the EU’s economy, and this procurement can be a highly effective way of favouring the goods and services that meet certain requirements, rather than just those that cost least to purchase. This can have a beneficial multiplier effect on the economy as a whole.’

Up to member states to shoulder the leadership role’

The analysis gives recommendations on how the EU should act to achieve a circular economy within planetary boundaries. Mia Pantzar thinks the key is to establish specific targets at EU level, in order to provide a clear collective roadmap for national operators and companies. She finds it hard to see how large-scale change can take place until business models are transformed from the ground up.

‘This calls for reviewing incentive structures. Putting responsibility on citizens to change their habits isn’t enough. A draft action plan leaked in January contained an objective of reducing the material footprint of EU consumption in absolute terms, but unfortunately this isn’t included in the final wording.’

Not only the EU has an important role of promoting and attaining a circular economy. Pantzar points out that it is up to every member country to act, since several of the policy instruments — such as taxes, including value-added tax (VAT) — used to regulate consumption and demand for natural resources are beyond the scope of the EU’s legal powers.

‘The EU plays an important supportive and harmonising part, of course. But it’s up to every member country, region, city and town to shoulder the leadership role. And not just to assume responsibility, but to see opportunities as well.’