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Circular economy

Europe’s one trillion euro #ClimateFinancePlan

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Photovoltaic© Shutterstock.com/Franco Lucato 

Find out how Europe wants to fund projects to tackle climate change and support regions that are most affected by the transition to a green economy.

Just over a month after the presentation of the European Green Deal, the European Commission presented a detailed proposal on how to finance it. The European Green Deal Investment Plan is designed to attract at least one trillion euro worth of public and private investment over the next decade.

Why it matters

Turning the EU into a climate neutral economy by 2050 will require massive investment in clean energy technologies. Only achieving an interim greenhouse gases reduction target of 40% by 2030 would require €260 billion of additional investment a year, according to the Commission’s estimates.

Find out more on the EU's response to climate change

Where the money will come from

Around half of the money should come from the EU budget through various programmes that contribute to climate and environment projects, for instance through agricultural funds, the Regional Development FundCohesion FundHorizon Europe  and the Life programme.

This in turn would attract an additional €114 billion in co-financing by EU countries. About €300bn worth of private and public investment is expected to be mobilized through InvestEU and ETS funds and another €100 billion should be attracted using the new Just Transition Mechanism, which is designed to support regions and communities that are most affected by a green transition, for instance regions that are heavily dependent on coal.

Just Transition Mechanism

The mechanism will be based on three pillars: the Just Transition Fund, the InvestEU funding stream and loans from the European Investment Bank backed by the EU budget. All these instruments are expected to attract €100 billion in public and private investment – money that could be used for workers to learn new skills for jobs of the future, support for businesses to create new employment opportunities as well as investment in clean energy and the insulation of homes.

The fund’s investments should especially help those regions that are dependent on fossil fuels, such as coal which still provides about a quarter of EU power generation. The coal sector in the EU employs 238,000 people in directly linked activities, such as coal mines and power plants, in more than 100 European regions  from Poland to Spain. In 2015, there were 128 coal mines in 12 EU countries and 207 coal power plants in 21 EU countries.

Presenting the proposal to MEPs on 14 January, Frans Timmermans, the commissioner responsible for the European Green Deal, said: “It’s a message to coal miners in Asturias, Western Macedonia or Silesia, to the peat harvesters in the Irish midlands, Baltic regions relied on oil shale and many more. We know that you face a steeper path towards climate neutrality and we know that the prospect of a different future - a cleaner one - might be a welcoming prospect in general but the road to it looks daunting today. This Just Transition Mechanism of at least €100 billion is a pledge that the EU stands with you in this transition."

Beautiful woodland bluebell forest in spring.© Shutterstock.com/Simon Bratt 

What MEPs are saying

The investment plan was discussed in the Parliament on Tuesday 14 January. You can watch the whole debate here.

Siegfried Mureșan (EPP, Romania) called for ensuring that there is enough resources to alleviate the effects of transition. “It also should not affect existing policies - neither cohesion nor agriculture nor research and innovation. It’s an additional priority and should be financed on top.”

“We need to look at the need for fresh funding to underpin this social and ecological transformation,” said Iratxe García Pérez (S&D, Spain). She wants at least 30% of the EU’s next long-term budget to be dedicated to tackling climate change.

Dragoș Pîslaru (Renew, Romania): “I call on all member states to use these tools and focus on investments in the most important resource of Europe - the citizens.”

Niklas Nienaß (Greens, Germany): “We can support this proposal if it stands for a clear and just transition with concrete phase-out plans for all coal regions.”

“It’s not quite clear where the resources are going to come from,” said Gianantonio Da Re (ID, Italy). “The criteria for beneficiaries and how the funds are going to be distributed also have to be resolved.”

Johan Van Overtveldt (ECR, Belgium), chair of the budgets committee, also pointed to the lack of clarity about where some of the money will come from. “We are in favour of a circular economy but against the ‘recycling of funding and money’. We are not in favour of financial adventures.”

Younous Omarjee (GUE, France), chair of the regional development committee, said: “We need to reduce social costs and support regions in this just transition.”

Next steps

The relevant parliamentary committees will now deal with the Commission proposal allowing MEPs to discuss it in more depth and to table amendments to improve it. After this negotiations with the Council on the final text should start.

Circular economy

#CircularEconomy - 'With a new impetus for sustainable development'

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The COVID-19 crisis has created the conditions for circular products and services to become the norm in Europe, says the EESC. In a recent opinion on the new EU Circular Economy Action Plan, the EESC urges lawmakers to ensure the circular economy finds a place and resources in the overall "greenprint" for Europe's recovery.

"The COVID-19 crisis can be a great opportunity to start up again with new impetus for sustainable development," said Antonello Pezzini, rapporteur for the EESC opinion on the new EU Circular Economy Action Plan, adopted at the July plenary session.

The vision of circular products and services becoming the norm, which was behind the plan put forward by the European Commission back in March as COVID-19 was looming, is becoming more tangible as the crisis unfolds. "With the new Action Plan, the circular economy can really become a pillar of the Green New Deal," said the rapporteur.

The Action Plan takes in much of the advice already pioneered by the EESC in its 2016 opinion on the first Circular Economy Package, particularly in areas such as eco-design, reparability, premature obsolescence and secondary raw materials, and as such is very welcome. However, broader measures will also be needed, in the EESC's view.

The soft side of the Circular Economy

A real circular economy culture needs to be nourished, argues the EESC. Taxation should shift from labour to resources and imported products that flout circular economy principles. Wealth should be measured through criteria which go beyond GDP.

The current systems used to calculate GDP (based on either expenditure, production or income) are an expression of the old "take-make-use-dispose" mentality. The EESC suggests using new elements other than economic performance, such as:

  • Creating solidarity-based systems for an inclusive society;
  • living within the limits of our planet, and;
  • a fair distribution of resources.

Softer aspects such as education will be key to fostering the new mindset and encouraging people to change their daily habits and behaviour, in the EESC's view.

Advertising should also be encouraged to move away from consumerism and present long-lasting, reusable goods as being of value to the consumer and society, urges the EESC.

The future of the European Circular Economy Stakeholder Platform

The European Circular Economy Stakeholder Platform, which was set up jointly by the EESC and the previous European Commission, could support many of the actions outlined in the new Action Plan.

The Platform is an inter-institutional initiative, launched by the EESC and the Commission in 2017. This three-year period has seen three well-attended joint annual conferences, a Coordination Group that has delivered 50 initiatives, and a website that has received over 230 000 visitors, brought together over 350 Good Practices, 33 Strategies and a Knowledge Hub with more than 200 publications. The Platform has an active presence on social media with over 2 400 Twitter followers, and has recently established a presence on LinkedIn.

The Platform, which is intended to encourage the exchange of circular economy knowledge and know-how, should therefore continue under the new Plan and become the go-to resource for circular economy players in Europe, urges the EESC. It has, in fact, just published a Call for Expression of Interest for a Coordination Group for the new mandate starting in Autumn 2020.

"The Circular Economy Platform has been at the forefront of circular economy implementation and policy design across the EU. It has taken on a very strong leadership role in this area" says opinion co-rapporteur Cillian Lohan. "We are confident that it will continue to serve a very useful purpose in the future".

Background

The new Circular Economy Action Plan (CEAP) proposed by the European Commission in March 2020 sets out a series of new initiatives covering the entire cycle of product design and lifespan to enable both individuals and businesses to play a role in the circular economy.

The plan includes some 35 measures over a three-year period (mid-2020 to mid-2023) to:

  • Make sustainable products the norm in the EU;
  • empower consumers with access to reliable information and a true "right to repair", and;
  • focus on the sectors that use the most resources and where the potential for circularity is high, such as electronics and ICT, batteries and vehicles, packaging, plastics, textiles, construction and buildings, waste.

    Currently, only 8.6% of global activities operate on circular principles.

According the World Economic Forum, in 2019, over 92 billion tonnes of materials were extracted and processed, contributing to about half of global CO2 emissions. UNDP says resource extraction and processing accounts for more than 90% of global biodiversity loss.

Businesses and consumers are increasingly recognizing the damage caused by linear economic models, which rely heavily on resource consumption and involve the use of premature obsolescence techniques, encouraging people to constantly buy new products.

VIDEO: Europe at work

The European Economic and Social Committee is an institutional consultative body established by the 1957 Treaty of Rome. It represents the various economic and social components of organized civil society. Its consultative role enables its members, and hence the organisations they represent, to participate in the EU decision-making process.

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Circular economy

Commission presents guidelines on waste management in the #Coronavirus crisis

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The Commission has published guidelines to support member states in their waste management in these difficult times of coronavirus. The continuity in providing those services also during the coronavirus crisis is crucial for our health, for the environment, and for the economy.

Environment, Oceans and Fisheries Commissioner Virginijus Sinkevičius said: “In this unprecedented crisis, we are working with the member states and waste operators across the EU to address the challenge of ensuring a high level of protection of human health and the environment. Proper waste management is part of the essential services underpinning the well-being of our citizens, delivered by numerous companies dealing with waste and keeping the circular economy going.”

The Commission recognizes the efforts of waste management operators to ensure the continuity of proper waste management and handling the increased volume of households' and medical waste. To support them in these efforts, the Commission provides guidelines on the management of municipal waste, management of waste from healthcare facilities, and on the health and safety of waste management operators and their workers.

The guidelines can be found here.

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Circular economy

#CircularEconomy - ‘The linear growth model of take, make, use, discard has reached its limits’

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On 11 March, the European Commission adopted a new Circular Economy Action Plan - one of the main building blocks of the European Green Deal, Europe's new agenda for sustainable growth. With measures along the entire life cycle of products, the new Action Plan aims to make our economy fit for a green future, strengthen our competitiveness while protecting the environment and give new rights to consumers.

European Green Deal Executive Vice President Frans Timmermans said: “To achieve climate-neutrality by 2050, to preserve our natural environment, and to strengthen our economic competitiveness, requires a fully circular economy. Today, our economy is still mostly linear, with only 12% of secondary materials and resources being brought back into the economy. Many products break down too easily, cannot be reused, repaired or recycled, or are made for single use only. There is a huge potential to be exploited both for businesses and consumers. With today's plan we launch action to transform the way products are made and empower consumers to make sustainable choices for their own benefit and that of the environment.”

Environment, Oceans and Fisheries Commissioner Virginijus Sinkevičius said: “We only have one Planet Earth, and yet by 2050 we will be consuming as if we had three. The new Plan will make circularity the mainstream in our lives and speed up the green transition of our economy. We offer decisive action to change the top of the sustainability chain – product design. Future-oriented actions will create business and job opportunities, give new rights to European consumers, harness innovation and digitalisation and, just like nature, make sure that nothing is wasted.”

The transition towards a circular economy is already underway, with front-runner businesses, consumers and public authorities in Europe embracing this sustainable model. The Commission will make sure that the circular economy transition delivers opportunities for all, leaving no one behind. The Circular Economy Action Plan put forward today as part of the EU Industrial Strategy presents measures to:

  • Make sustainable products the norm in the EU. The Commission will propose legislation on Sustainable Product Policy, to ensure that products placed on the EU market are designed to last longer, are easier to reuse, repair and recycle, and incorporate as much as possible recycled material instead of primary raw material. Single-use will be restricted, premature obsolescence tackled and the destruction of unsold durable goods banned.
  • Empower consumers. Consumers will have access to reliable information on issues such as the reparability and durability of products to help them make environmentally sustainable choices. Consumers will benefit from a true ‘Right to Repair'.
  • Focus on the sectors that use the most resources and where the potential for circularity is high. The Commission will launch concrete actions on:
    • Electronics and ICT – a ‘Circular Electronics Initiative' to have longer product lifetimes, and improve the collection and treatment of waste;
    • batteries and vehicles – new regulatory framework for batteries for enhancing the sustainability and boosting the circular potential of batteries;
    • packaging – new mandatory requirements on what is allowed on the EU market, including the reduction of (over)packaging;
    • plastics – new mandatory requirements for recycled content and special attention on microplastics as well as biobased and biodegradable plastics;
    • textiles – a new EU Strategy for Textiles to strengthen competitiveness and innovation in the sector and boost the EU market for textile reuse;
    • construction and buildings – a comprehensive Strategy for a Sustainably Built Environment promoting circularity principles for buildings, and;
    • food – new legislative initiative on reuse to substitute single-use packaging, tableware and cutlery by reusable products in food services.
  • Ensure less waste. The focus will be on avoiding waste altogether and transforming it into high-quality secondary resources that benefit from a well-functioning market for secondary raw materials. The Commission will explore setting an EU-wide, harmonised model for the separate collection of waste and labelling.The Action Plan also puts forward a series of actions to minimise EU exports of waste and tackle illegal shipments.

Background

The European Green Deal, presented by the von der Leyen Commission on 11 December 2019, sets an ambitious roadmap towards a climate-neutral circular economy, where economic growth is decoupled from resource use. A circular economy reduces pressure on natural resources, and is a precondition for achieving the climate-neutrality target by 2050 and halting biodiversity loss. Half of total greenhouse gas emissions and more than 90% of biodiversity loss and water stress come from resource extraction and processing.

The circular economy will have net positive benefits in terms of GDP growth and jobs' creation, since applying ambitious circular economy measures in Europe can increase the EU's GDP by an additional 0.5% by 2030 creating around 700,000 new jobs.

More information

Questions and Answers: A New Circular Economy Action Plan for a Cleaner and More Competitive Europe

New Circular Economy Action Plan website

Factsheet: New Circular Economy Action Plan

New video stockshots on circular economy: plastics

A new Circular Economy Action Plan for a Cleaner and More Competitive Europe

Annex to the new Circular Economy Action Plan for a Cleaner and More Competitive Europe

Staff working document ‘Leading the way to a global circular economy: state of play'

Eurobarometer survey: Protecting the environment and climate is important for over 90% of European citizens

First Circular Economy Action Plan website

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