Circular Economy to Dominate the Agenda for the Next Five Years

Newly-elected Commission President, Ursula von der Leyen, has committed to promoting a circular economy in her agenda for Europe, stating that the main priority area is high-impact sectors such as the textiles and construction industries. For some, the announcement seems standardised and vague, perhaps even just a precaution to ensure her confirmation as European Commission President.

In reality, the statement is significant when combined with the fact that circular economy proponent, Frans Timmermans, is likely to become Commission Executive Vice-President. He will undoubtedly have and use his authority to drive the environmental agenda, suggesting that circularity will significantly influence the Commission’s agenda over the next five years.

Momentum and enthusiasm for the circular economy are also building at national level. Notably in France, an unprecedented anti-waste bill banning the disposal of unsold non-food products is currently going through Parliament. Additionally, five national development banks (in France, Germany, Italy, Poland and Spain) have, together with the European Investment Bank, committed €10 billion to circular economy projects.

The Finnish Presidency of the Council is also pushing the circularity agenda within the Council and there is no doubt that pro-environment voices in the European Parliament’s Environment Committee will prevail during its next mandate.

All these actions put pressure on the Commission to present a European approach that will ensure continued coherence within the EU and preserve the single market.

So, what does a circular economy package 2.0 look like?

We know that the Commission is working on a circular economy package 2.0 and its ambitions depend on the political buy-in from the incoming Environment Commissioner. However, there is enough evidence to make some justified predictions.

First, a new package will be sectoral but apply horizontal policy tools. Second, sectors that will be impacted the most are textiles and construction, given that these have been repeatedly mentioned by influential policymakers. Nevertheless, the packaging, transport, chemicals, food and electronics industries should also expect ‘special attention’.

The Commission recently concluded that many existing policy tools are suitable to drive the circular economy agenda. However, it seems particularly keen to measure the environmental impact of products throughout their life cycle, whether through tools such as the Product Environmental Footprint (PEF) or Level(s).

Such an approach would facilitate a sectoral standardised measure mechanism that would support a wealth of other policy tools believed to promote circularity. Other focus areas will likely include labelling, minimum sustainability requirements (eco-design) and Extended Producer Responsibility (EPR).

Industries bracing for impact

Some industries are already preparing for the inevitable policy measures in an attempt to prevent the total disruption of their existing practices; the fashion industry, for example, signed a joint manifesto on how to deliver a circular economy that essentially tells policymakers what is needed. Meanwhile, the chemicals industry defined its role in achieving a circular economy by highlighting transparency and chemical recycling as priorities.

There is undoubtedly some uncertainty regarding the next Commission’s ambitions and actions on the circular economy and much depends on the incoming Environment Commissioner. However, there is growing pressure to swiftly present a comprehensive circular economy package 2.0 and policymakers are looking for new ideas to tackle those issues.