The Circular Economy: by Karmenu Vella

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Speech by Commissioner Vella at the 2015 European Circular Economy Conference

Brussels, 05 March 2015

Karmenu Vella – Commissioner for Environment, Maritime Affairs and Fisheries 



Ladies and gentlemen,

Thank you for inviting me to speak at this conference.

Let me start with an ideal definition of Circular Economy;

In a circular economy, almost nothing is wasted. Re-use and remanufacturing is standard practice, and sustainability is built into the fabric of that society. There is less waste to deal with, and more is generated from limited resources. The new technologies created then bolster the competitive position on the world stage.

Our challenge is to place the European Union at the forefront of these developments.

Yesterday I was speaking at the launch of the State of the Environment Report. It says very clearly that the short-term trends related to resource efficiency are encouraging. That is thanks largely to good strategic thinking, and to good European policy. But success should breed vigilance not complacency.

The more I look at the two sides – the environment and the economy – the more convinced I become that the way forward is to fully integrate resource efficiency into the way we do business in Europe.

We know why a circular economy is a good idea. At the moment Europe is still locked into a linear production chain that is resource intensive. We obtain resources and then discard them as waste.

The full potential and value is lost. But in a world where the global population rises by more than 200 000 every day, with all the demand that places on land, water, food, feed, fibre, raw materials and energy, this is no longer sustainable.

By 2050 we would need three times more resources than we currently use. And the demand for food, feed and fibre will rise by 70 per cent. Yet more than half the ecosystems these resources depend on are already degraded, or are being used beyond their natural limits.

And ‘Ecosystem’ is perhaps the key word. We need our industrial system to behave much more like an eco-system. In an eco-system, the waste of one species is the resource to another. We need to recalibrate so that the output of one industry becomes automatically the input of another.

To address specifically the Commission’s circular economy package.

The Commission is aiming to present a new, more ambitious circular economy package late in 2015, to transform Europe into a more competitive resource-efficient economy, addressing a range of economic sectors in addition to waste.

But let us remember that the concept of the Circular Economy has been around since the 1960’s; first called the ‘spaceman’ economy, so called because everything on a spaceship has to be reused, then ‘cradle to cradle’, and now the Circular Economy. This is a long-term concept and we need a little time to get the long-term policy response right.

The decision to withdraw the waste legislative proposal was based on the need to better align it with the priorities of the new Commission. The Commission has decided to undertake a thorough reflection on how the objective of circular economy can be reached in a more efficient way that is fully compatible with the jobs and growth agenda.

Continuously advancing waste management remains a priority of course, through incentives and support for waste reduction as well as high-quality separation and collection systems. The latter ensure that resources stay within the circle and are available for future use.

Waste is not managed as well as it could be. In 2012 total waste production in the EU amounted to 2,5 billion tons, an average of 5 tons per inhabitant and per year. From this total only a limited share of 36% was effectively recycled. The largest share, 37%, was simply sent for disposal whether in landfills or on lands. In other words, around 1620 million tons of waste was lost for the EU economy. Losing this material means that significant growth and competitiveness potential is not being exploited through the development of a reuse/recycling industry in the EU.

Getting maximum value from resources requires action at all stages of the life cycle of products.

There needs to be circular economy processes reflected from the extraction of raw material to the product design, production and production of goods and through an increasing use of secondary raw-materials.

Products that last longer, have a longer warranty, or come with repair manuals and spare parts would help in this sense.

The distribution and consumption of goods must be part of that process.

To speak from the Maritime and Fisheries side of my portfolio;

Too much plastic waste, which could be recycled, and be a valuable resource, ends up as micro-plastics in our seas.

Repair and re-use schemes should be advanced.

And we should be capable of creating a genuine market for recyclates.

The Commission, when re-tabling the package, will include a new legislative proposal on waste targets, taking into account the input already given to us during public consultations, and by Council and in Parliament, in particular the comments made by many that the previous waste proposal needed to be more country-specific.

But let us remember one thing. The Circular Economy transformation on the scale we have in mind will never come about simply as a result of legislation. We need a combined approach, where smart regulation is blended with market-based instruments, innovation and incentives. These would provide businesses, including SMEs, with concrete tools and instruments and incentives to promote the transition to a circular economy.

We want to give a clearly positive signal to those waiting to invest in the circular economy. Above all the private sector needs regulatory certainty. Clarity promotes investment and investment promotes jobs. The job creation potential of the circular economy is not to be underestimated.

Despite the financial crisis, in the environmental goods and services sector, employment continued to increase during recent years, from 3 to 4.2 million jobs (2002-2011), with 20% growth in the recession years (2007- 2011). There is also an expanding global market for green industries, offering substantial export potential.

And that is the policy line we need to follow in the future. Recent estimates show how increasing resource productivity by 30 % by 2030 could boost GDP by nearly 1 %, while creating over two million jobs more than under a business as usual scenario. Waste prevention, eco-design, reuse and similar measures could bring net savings of € 600 billion, or 8 % of annual turnover, for businesses in the EU, while reducing total annual greenhouse gas emissions by 2-4 %.

The Commission will continue to promote eco-innovation and investment in clean technologies to build a circular economy. The preparatory report on the European Strategic Investment Plan highlights the importance of resource efficiency, identifying it as one of the key objectives. This should translate into firm support for eco-innovation projects, actively complementing the considerable support already available via the European Structural and Investment Funds.

The new approach is two-fold:

First, we will of course present a new legislative proposal on waste targets. This new proposal will use the expert knowledge already gained to be more country sensitive. I want to assure you that we will keep our EU wide goals on recycling levels

Our success will be measured by how well policies are implemented on the ground. So we will have to set smart, realistic objectives and focus on implementation.

Second, to close that circle, we will prepare a roadmap for further action on the circular economy. It will consider two aspects:

upstream: in the production and use phase, before products become waste; and

downstream: after products are no longer waste, looking at what can be done to encourage and develop a market for the recycled products.

The work on this half of the circle will take the form of a roadmap where we identify what can be done rapidly, and what we should propose at a later stage.

Both these aspects – the waste targets review and the roadmap – will come together before the end of this year. I hope you will agree with me that this is quite a broad and ambitious programme.

But we are not starting from scratch. Europe already has a wide range of rules and instruments contributing to a circular economy: for instance in the area of emissions, waste or chemicals. If a product contains hazardous substances, for instance, it cannot be recycled at high level of quality.

I remind you of the State of the Environment Report. From now to 2050 we must double our efforts to encourage resource efficiency. Europe remains a place where skill levels are sky high but where resources levels are rock bottom. Innovation and enterprise is Europe’s passport to a secure future.

We want to get Europe growing again. We will discuss the greening of the European Semester, and the EU’s resource efficiency agenda tomorrow, in Council, with Environment ministers. Pressures on resources and the environment are one of the four main factors that can hamper growth in the long-term. This much emerged from our review of the Europe 2020 strategy.

There are significant savings to be made with circular economy approaches.

The circular economy, can contribute further to the objectives of the Energy Union and the Climate Package.

It can have an immediate impact on the environment;

I am convinced that by turning into a truly recycling society we will not only serve the environment, but also ourselves.

So I count on you to bring the reflection forward. As I mentioned, we will consult widely before choosing the most appropriate tools.

Your input to this process will be very valuable and, as always, I am keen to listen to all views.

Thank you for your attention.