Towards the end of 2015, the European Commission is due to publish its new, “more ambitious” Circular Economy Strategy. The Strategy will develop proposals outlined in July 2014 which were controversially withdrawn at the beginning of this year. The 2014 proposals were criticised for being primarily focused on waste management, whilst failing to fully address or explore interactions with other potential measures, such as product policies or developing the market for recycled products.

The Commission’s “Roadmap”, published in April 2015, provides a preliminary outline of its work on the new Circular Economy Strategy and gives some clues as to what it might include when published later this year in the form of an “Action Plan”. To inform its Strategy, the Commission launched a public consultation on 28 May this year which concluded on 20 August. The results of the consultation are yet to be published.

WHAT IS A CIRCULAR ECONOMY?

Global competition for our limited natural resources is set to continually increase. This, alongside the contributory impact that plundering resources has already had on the environment, means there is now a growing demand across Europe for a shift from traditional ‘take-make-consume-dispose’ economics to a more efficient and environmentally responsible approach. Studies have shown that annually, only 20% of the materials used in consumer goods are recovered through recycling, yet there is clear scope to improve this figure.

The Commission wishes to ‘close the loop’ of the linear model, by reducing its reliance on imports and replacing the use of primary resources in the manufacturing process with recycled existing materials. Through re-use, repair, refurbishment and recycling, waste can itself be turned into a resource. what’s more, it can become a more stable and predictable resource than the primary alternative.

THE COMMISSION’S OBJECTIVES AND WHAT TO EXPECT IN THE UPCOMING ACTION PLAN

The Commission’s new approach to the Circular  Economy will contain two key elements: (i) a revised waste review proposal; and (ii) a Communication explaining the approach and reasons behind it. This will sit alongside an Action Plan addressing the full circle, which will include a list of actions with precise deadlines for each “pillar of intervention”. The pillars, and proposed actions, will be informed by the consultation process and the Commission’s following key policy objectives:

  1. The Overarching aim of breaking down barriers and creating the necessary conditions for a new market utilising recycled resources. This will create new jobs and reduce depletion of natural resources.
  2. A more effective approach on waste, accommodating differences between Member States with regard to their waste management and virtually eliminating landfilling. while some member states have already effectively eliminated landfilling, others still send 90% of waste to landfill.
  3. The introduction of incentives and breaking down barriers across all stages of the life cycle of products, rather than focusing exclusively on one part (i.e. the end stage) of the economic cycle. This will eliminate situations where, for example, chemicals used in the production of certain products have an adverse impact on the recycling potential of that product. This demonstrates how regulatory product requirements earlier on in the chain may have a bigger impact.
  4. Establishing a rigorous financing and support framework to help encourage innovation and investment in the initiative.
  5. Improving the monitoring of progress and clarification on the calculation method for recycled materials. Establishing one unified measure will help set clear recycling targets, which in turn helps improve long-term predictability for investors in this market.

LIKELY IMPACT OF THE COMMISSION’S COMMUNICATION AND ACTION PLAN

The new proposals have the potential to make big changes to economies across the EU. For example, the European Commission’s Julio Garcia Burgues, Head of the waste and Recycling Unit, DG Environment, claims that the new measures will mean “a reduction in demand for raw materials of around 20% and an increase of 3% in Gross Domestic Product in the European Union”. Measures to promote the reuse and recycling of materials may create two million jobs in the European Union and European businesses could save around £600 billion Euros.

There are currently no recycling targets for UK businesses that are prescribed by law. Furthermore, a review was recently launched by the Conservative government in July, which focused on reducing the “burdensome bureaucracies” of the waste sector.

The Business Secretary’s wish to free British businesses from the “heavy-handed regulators” means that it is unlikely that stricter recycling laws will be introduced in the near future. However, with increased pressure from Europe coming in the form of likely future recycling targets, alongside the doubts whether Britain will meet its current 50% recycling objective required of it by 2020, a stricter recycling approach for businesses cannot be ruled out going forwards. As such, it would be wise for businesses to pre-empt a stricter approach to recycling by setting aside the necessary start-up funds to put an effective recycling programme into place in the workplace.

Manufacturing businesses are likely to be impacted by any new regulations concerning requirements to improve the potential for future reuse and recovery of their products. As such, while the Circular Economy undoubtedly represents a positive step towards environmentally and economically responsible manufacturing and consumerism, businesses will need to be alive to the pending changes in order to ensure compliance of their products.