A circular economy is one that has less leakage, where waste is re-used as raw materials, and products or systems are designed to be recyclable. The European Commission is incorporating the concept of circularity into the European Green Deal, its commitment to create a climate-neutral continent by 2050.
Against a backdrop of rising emissions and waste, and the unsustainable extraction of raw materials, the need for circularity is growing. The EC's Plan moves towards an economy where we 'use' much more rather than just 'consume and dispose'.
Some 80 per cent of products' environmental impacts are determined at the design stage. The EC's Circular Economy Action Plan aims to promote improved environmental performance, design and labelling for the 'broadest possible range' of household and energy goods.
It will encourage making products more durable and more easily re-used, restrict some single-use items, and set rules on the levels of recycled content. Companies will still retain ownership and responsibility for their products throughout their lifecycle. The destruction of unsold durable goods may be banned.
A 'right to repair' would give European consumers the right to access spare parts, repair services and manuals; component parts must be easily disassembled from their products. Firms would be encouraged to compete on durability of products.
Businesses operating on low-quality, high-volume sales and repeat buys may find this difficult but incentivising consumers to purchase sustainable options could also be challenging. We think products and services must appeal for more than just sustainability benefits; they must be better on quality or price too.
Some sectors are particularly exposed to the circular economy. Microplastics will be restricted, food-waste reduced, more textiles will be recycled, buildings' energy-efficiency increased, and all packaging must be re-usable or recyclable and labelled to allow separation.
Electronic-goods firms must address obsolescence, buy back old chargers, tablets and phones, and produce a common charger for all devices.
Only nine countries in the 28 EU states had recycling rates above 50 per cent in 2018. The Circular Economy Action Plan wants to reduce waste exports and bolster domestic waste-management: harmonised waste-collection could see standardised product labels and coloured bins.
According to the EC, a circular economy in the EU could add 0.5 per cent to GDP and create 700,000 jobs. However, switching to a new model will require significant investment and numerous, targeted, nudge policies to change companies' and consumers' behaviour.
First published 12 March 2020.
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