2 EU Action Plan for the Circular
Economy
| Committee's assessment |
Politically important |
| Committee's decision | Not cleared from scrutiny; recommended for debate in European Committee A
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| Document details | Commission Communication: Closing the loop — an EU Action Plan for the Circular Economy
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| Legal base | — |
| Department | Environment, Food and Rural Affairs
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| Document Numbers | (37374), 14972/15 + ADD 1, COM(15) 614
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Summary and Committee's conclusions
2.1 The Commission has long seen a more efficient use of resources
as a key way of achieving the aims of the Europe 2020 Strategy,
and it has in recent years taken a number of initiatives in this
area. In particular, it says that, in order to retain the added
value in products as long as possible and eliminate waste, changes
are needed throughout value chains, as well as major systemic
changes, and it produced in July 2014 a Communication (Towards
a circular economy — A zero waste programme for Europe)[4],
which our predecessors considered on 3 September 2014 (when they
recommended it for debate in European Committee A).
2.2 That document — which has yet to be
debated — has now been superseded by this further Communication
setting out an Action Plan for the circular economy. This focuses
on the steps which can be taken at EU level at each step of the
value chain, looking specifically at both the design of products
and the efficiency of the production process; the impact of consumer
choice; waste management; the reuse of secondary raw materials
(including water); the role of innovation, investment and other
horizontal measures; and the ways in which progress towards a
circular economy can be measured. It also considers in more detail
certain priority areas (plastics, food waste, critical raw materials,
construction and demolition, and biomass and bio-based products),
and it is accompanied by a number of proposals — which we
are considering separately — for amending existing EU legislation
on waste generally, as well as on the landfill of waste, packaging
and packaging waste, end-of-life vehicles, waste batteries and
accumulators and waste electrical and electronic equipment.
2.3 The Government notes that many of the issues
identified are already being taken forward at EU and Member State
levels, but that new legislation at this stage is being proposed
only in relation to waste, with other measures flagged up in the
Communication being the subject of separate proposals in due course.
It accepts that a number of these can best be addressed at EU
level, but stresses the importance of their complementing, rather
than duplicating, those taken by individual Member States, which
it says must be free to pursue those policies which best suit
their own circumstances. However, the Government welcomes the
broad direction of the Action Plan, which includes a number of
ideas which the UK has supported, and it comments that, as compared
with the 2014 Communication, the Plan seeks to adopt a more joined
up approach, involving the whole value chain.
2.4 As the title of this document implies,
it sets out an ambitious and wide-ranging agenda for achieving
a so-called circular economy which seeks as far as possible to
eliminate waste, and it is accompanied by a number of specific
legislative measures relating to municipal waste, packaging and
packaging waste, and landfill (with a number of other measures
being the subject of subsequent proposals). We believe that the
underlying thrust of the Communication raises a number of important
issues relating not least the practicality and affordability of
the measures in question, and we consider this would be a timely
opportunity for the House to address these. We are therefore recommending
the document for debate in European Committee A, but, as it effectively
overtakes the corresponding Communication produced by the Commission
in July 2014, we are rescinding the outstanding debate recommendation
on that document.
2.5 We also draw attention to the representations,
initiated by the House of Lords European Union Committee, and
endorsed by 15 other EU national parliaments, inviting the Commission
in July 2015 to adopt proposals on food waste in the context of
the circular economy.[5]
Full details of
the documents: Commission
Communication: Closing the loop —an EU Action Plan for
the Circular Economy: (37374), 14972/15 + ADD 1, COM(15) 614.
Background
2.6 According to the Commission, a transition
to a more circular economy — where the value of products,
materials and resources is maintained as long as possible, and
the generation of waste minimised — is an essential element
in the EU's efforts to develop a sustainable, low-carbon, resource
efficient and competitive economy, and an opportunity to generate
new and sustainable competitive advantages for Europe. It says
that such an approach ties in closely both with key EU priorities
(including jobs and growth, the investment agenda, climate and
energy, the social agenda and industrial innovation), and with
global efforts on sustainable development. It also says that,
although business and consumers are key drivers, with local regional
and national authorities also having helped the transition, the
EU has a fundamental role to play in supporting and developing
the circular economy in the single market, giving clear signals
to economic operators and society at large through long term waste
targets and an ambitious set of actions to be carried out before
2020.
2.7 In July 2014, the Commission produced a Communication
addressing the issues involved, and it has now sought in this
Action Plan to focus on action at EU level with high added value
at each step of the value chain.
The current document
Production
2.8 The Commission says that both the design
phase and production process have an impact on sourcing resource
use and waste generation throughout a product's life. It notes
that design can make products more durable and easier to repair
or upgrade, help recyclers to dis-assemble them in order to recover
valuable materials and components, and thus help to conserve resources.
However, it suggests that current market signals are insufficient
because of the diverging interests of producers, users and recyclers,
and that it is therefore essential to provide incentives for improved
design, particularly as regards electrical and electronic products.
The Commission will therefore emphasize circular economy aspects
(such as reparability, durability, upgradability, recyclability,
and the identification of materials or substances) in future product
design requirements under the Ecodesign Directive (2009/125/EC),
which it says has hitherto targeted energy efficiency, and it
will seek to introduce these on a product-by-product basis. In
addition, it will encourage better product design by differentiating
the financial contribution paid by producers under extended product
responsibility schemes on the basis of the end-of-life costs of
their products, thus creating a direct incentive to design products
which can be more easily recycled or reused: and it will also
examine the scope for a more coherent framework for EU product
policy in areas such as eco-design, energy labelling, eco-labelling,
and green public procurement.
2.9 However, the Commission says that, even when
a product is well designed, an inefficient production process
can lead to significant waste, and that, given the important role
of primary raw materials, attention needs to be paid to the resulting
environmental and social impacts both within the EU and in non-EU
countries, with global sustainable sourcing being promoted through
trade and development policies (and by industry making specific
commitments). However, it notes that each industrial sector is
different, and it says that it will further develop "best
available technique reference documents" (BREFs), which Member
States must reflect when issuing permits for industrial installations:
it will also help small and medium sized enterprises (SMEs) to
access innovative technologies which will increase resource efficiency,
as well as improving the uptake of the EU Eco-Management and Audit
Scheme (EMAS). The Commission concludes by highlighting the importance
of promoting innovative industrial processes, for example by enabling
waste from one industry to become an input for another, and says
that it will seek to ensure a common understanding between Member
States of the rules on by-products. It will also support promising
developments through its research and development funding programme,
Horizon 2020 and Cohesion Policy funds.
CONSUMPTION
2.10 The Commission observes that consumer choices
can support or hamper the circular economy, and that these are
shaped by the information available, the range and prices of existing
products, and the regulatory framework: and it notes the difficulty
which consumers face in differentiating between products and assessing
the information available, observing that green claims may not
always be reliable, accurate or clear. It says that it is working
to make such claims more trustworthy and to ensure better enforcement
of the rules in place, as well as testing the Product Environmental
Footprint,[6] and it will
examine how to increase the effectiveness of the voluntary EU
Ecolabel (which identifies products having a reduced environmental
impact throughout their lifecycle). It also recalls that it has
proposed an improved labelling scheme for household appliances
which will help consumers choose the most energy efficient products
2.11 The Commission goes on to note that price
is a key factor affecting purchasing decisions, where it has encouraged
Member States to provide incentives, and use instruments such
as taxation, to ensure that product prices better reflect environmental
costs; that aspects relating to guarantees, such as the legal
guarantee period and reversal of the burden of proof, are important
in protecting consumers and improving product durability; and
that, although a two year legal guarantee exists in the EU for
goods, implementation remains a problem. The Commission says that
it will address issues such as these, notably in the proposals
it will be making on online sales of goods, and that it will also
evaluate key pieces of consumer legislation.
2.12 The Commission then observes that the life
of a purchased product can be extended through reuse and repair,
activities which are labour-intensive, and thus contribute to
the EU's jobs and social agenda. However, it notes that certain
products cannot be repaired because of their design, or because
spare parts or repair information are not available, and it says
that future work on eco-design will address this: and it also
identifies the need to tackle planned obsolescence practices,
which limit the useful lifetime of products. Other actions which
the Commission suggests can reduce household waste include awareness
campaigns and economic incentives (such as "pay-as-you-throw"
schemes), and innovative forms of consumption: and it places particular
emphasis on "green" public procurement, where it says
that it will support the adoption of relevant criteria by public
authorities, and lead by example in using green procurement itself
as widely as possible.
WASTE MANAGEMENT
2.13 The Commission notes the central role of
waste management in the circular economy, which it says determines
how the waste hierarchy[7]
is put into practice, and encourages the options which deliver
the best overall environmental outcome. It says that, in order
to achieve high levels of material recovery, it is essential to
send long-term signals to public authorities, businesses and investors,
and to establish the right enabling conditions at EU level, including
consistent enforcement, with all waste being considered, whether
generated by households, businesses, industry, mining or construction.
It notes that only about 40% of waste generated by EU households
is currently recycled (though this varies from 5% to 80% according
to the location), and it says that it is putting forward proposals
to increase the recycling, and reduce the landfilling, of municipal
waste; to increase recycling targets for packaging materials;
to raise levels of high-quality recycling by improved waste collection
and sorting (including the use of producer responsibility schemes),
with minimum standards of transparency and cost-efficiency; and
to address issues relating to the calculation of recycling rates,
so as to ensure comparable statistics across the EU.
2.14 The Commission adds that it is also important
to address obstacles on the ground, such as inadequate investment
in collection and recycling infrastructure, and insufficient use
of economic instruments, and that, although its new legislative
proposals on waste seek to take account of these considerations,
it is committed to providing technical assistance to Member States
and to facilitating exchanges of best practice. It notes the role
of EU cohesion funding over the last two decades in closing the
investment gap for improved waste management and the application
of the waste hierarchy, and the extent to which funding in the
current (2014-2020) period will seek to ensure that new investments
are in line with waste management plans designed by Member States
to meet their recycling targets.
2.15 The Commission also identifies the illegal
transport of waste as another barrier to higher recycling rates,
but notes that the adoption in 2014 of a revised Regulation on
waste shipment will help to detect such activity, with high-value
waste streams, such as end-of-life vehicles, being targeted specifically;
it says that, in order to foster high-quality recycling, it will
promote the voluntary certification of treatment facilities for
certain key types of waste (such as electronic waste and plastics);
and that, where waste cannot be prevented or recycled, recovering
its energy content is in most cases preferable, in both economic
and environmental terms, to landfill. It says that it will examine
how this can be optimised by adopting a "waste to energy"
initiative in the framework of the Energy Union.
WASTE TO RESOURCES: SECONDARY RAW MATERIALS AND
WATER REUSE
2.16 The Commission says that, in a circular
economy, materials can be recycled and then traded in the same
way as primary raw materials from traditional extractive resources,
but that they currently account for only a small proportion of
the materials used in the EU. It adds that, as waste management
practices have a direct impact of the quantity and quality of
such materials, action to improve those practices is essential,
but that other barriers restrict the growth of this market, including
uncertainties over their quality in the absence of EU-wide standards.
It says that it will therefore instigate work on such standards
where this is necessary, and, in the meantime, it points out that
the revised legislative proposals on waste which accompany this
Communication clarify existing rules on "end-of-waste"
to establish when a secondary raw material should no longer be
legally classified as waste.
2.17 The Communication goes on to look at three
specific categories of secondary raw materials. First, recycled
nutrients which are present in organic waste and can be
used a fertilisers, thereby reducing the adverse environmental
impact arising from use of mineral-based fertilisers (which are
also in limited supply): as their circulation is hampered by the
different quality standards applied by Member States, the Commission
will propose a revision of EU legislation on fertilisers. Secondly,
in the light of increasing water scarcity, the reuse of
treated waste water provides a valuable but underused means of
increasing supply, with water reuse in agriculture also contributing
to the recycling of nutrients: the Commission will therefore promote
the reuse of treated waste water, including the introduction of
minimum requirements. Thirdly, whilst a growing number of chemicals
give rise to health or environmental concerns and are subject
to restrictions, they may be present in substances with a long
lifetime sold before those restrictions applied, and may thus
be found in recycling streams, where they can be costly to detect
or remove. The Commission will therefore analyse the interactions
of legislation on waste, products and chemicals so as to limit
unnecessary burdens on recyclers whilst facilitating the traceability
and risk management of chemicals in the recycling process.
2.18 The Commission also says that it is essential
to facilitate the cross-border circulation of secondary raw materials
within the EU by simplifying formalities though the use of electronic
data exchange, and that it is both examining other barriers to
the smooth circulation of waste and further developing the recently
initiated Raw Materials Information System as well as supporting
EU-wide research on raw material flows and the improvement of
data reporting on waste shipment. It concludes by observing that
sufficient demand is a key factor in creating a dynamic market
for secondary raw materials, and that, whilst this is already
high in some areas (such as paper and metal), it is still developing
in others, where the role of the private sector will be essential.
It adds that the sort of public commitments which some sectors
have already given to ensuring a certain level of recycled content
in their products should be encouraged, and that the procurement
policies of public authorities can also contribute to the demand
for recycled products.
PRIORITY AREAS
2.19 The Commission notes that a number of sectors
face specific challenges, which need to be addressed in a targeted
way. These include:
Plastics
The Commission stresses the importance of increasing
recycling of plastics, noting that their use in the EU has grown
steadily, but that less than 25% of collected plastic waste is
recycled, with about 50% going to landfill, and large quantities
also ending up in the oceans (where the UN's 2030 Sustainable
Development Goals include the prevention and significant reduction
of marine pollution of all kinds). It suggests that smarter separate
collection and certification schemes are critical in diverting
recyclable plastics away from landfill and incineration, but notes
that hazardous chemical additives can pose difficulties, with
new innovative plastics — though contributing to the circular
economy — also raising questions as to their biodegradability.
It says that, in order to address these issues, it will prepare
a strategy dealing with the challenges presented by plastics throughout
the value chain and their entire life-cycle, and will also take
action to significantly reduce marine litter (including that from
ships).
Food waste
The Commission says that food waste is an increasing
concern in Europe from both an environmental and a social angle,
suggesting that the donation of food which is still edible, but
which cannot be disposed of commercially for logistic or marketing
reasons, should be facilitated, and it adds that the EU and its
Member States are committed to meeting the UN's 2030 Sustainable
Development Goal of halving per capita food waste at the retail
and consumer level and reducing food losses along the production
and supply chains. It also observes that such losses are particularly
hard to quantify, and that, as there is currently no reliable
harmonised means in the EU to measure them, it will seek to establish
such a methodology in close cooperation with Member States and
stakeholders.
The Commission also draws attention to the action
needed at all levels to prevent food waste and to its support
for awareness campaigns and the dissemination of good practice,
and it says that it will create a platform bringing together all
the relevant actors in order to support the achievement of the
target under the Sustainable Development Goal. In addition, it
will look at areas (such as donations to food banks, or the use
of unsold food in animal feed), in which food waste can result
from the way EU legislation is interpreted or implemented, and
it will review marking, where a "best before" date can
be wrongly interpreted as an expiry date, and lead to the discarding
of safe, edible food.
Critical raw materials
These are materials of high economic importance,
but which are vulnerable to supply disruption and whose extraction
causes significant environmental impacts: in particular, they
are often present in electronic devices which currently have a
very low rate of recycling. The Commission notes that existing
EU legislation encourages the recycling of electronic waste, including
through mandatory targets, but that only high quality recycling
can ensure the recovery of critical raw materials, with one of
the challenges being the collection and dismantling of products
containing them, thus increasing the importance of product design.
It adds that other barriers include an insufficient exchange of
information between manufacturers and recyclers, the absence of
recycling standards, and the lack of economic data on the potential
for recycled critical raw materials, and it proposes to prepare
a report, which will provide key data sources and identify options
for future action.
Construction and demolition
The Commission notes that construction and demolition
are among the biggest sources of waste in volume terms, and the
role of the construction sector in the environmental performance
of buildings and infrastructure throughout their life. It says
that, although many such materials are recyclable or can be reused,
with this being encouraged by an EU-wide mandatory target, the
rate at which this takes place varies widely across the EU, and
that there are challenges on the ground which still have to be
addressed, such as identification and separate collection. It
proposes to develop targeted guidelines for use on demolition
sites, including the treatment of hazardous waste, and says that
its revised proposals on waste promote sorting systems for construction
and demolition waste. It will also spread best practice and develop
voluntary recycling protocols based on the highest common standards
for each waste stream. It concludes by saying that, given the
long lifetime of buildings, it is essential to encourage design
improvements to reduce their environmental impacts and increase
the durability of their components, and it intends to develop
indicators to assess their environmental performance.
Biomass and bio-based products
The Commission says that bio-based products can be
used for a wide range of products and energy uses, and that, by
providing alternatives to fossil-based products and energy, they
can contribute to the circular economy, as well as providing advantages
linked to their renewability, biodegradability or compostability.
On the other hand, they give rise to issues of sustainable sourcing
and create pressure on land use, and the Commission proposes to
examine the contribution to the circular economy of its 2012 Bioeconomy
Strategy and consider updating it if necessary. It also says that
a cascading use of renewable resources, with several reuse and
recycling phases should be encouraged, alongside the application
of the waste hierarchy, and that the application of national measures,
such as extended producer responsibility schemes can have a positive
impact. In addition, the sector has shown its potential for innovation
in new materials, chemicals and processes, which can be an integral
part of the circular economy, but realising this potential depends
in particular on investment in integrated bio-refineries, which
the Commission says the EU is supporting through research funding.
INNOVATION, INVESTMENT AND OTHER HORIZONTAL MEASURES
2.20 The Commission suggests that the transition
to a circular economy represents a systemic change, in which innovation
will play a key role in encouraging the necessary new technologies,
processes, services and business models, and that support for
research and innovation will therefore be a major factor. It notes
that the Horizon 2020 programme for 2016-17 includes a major initiative
which will grant over €650 million (£483 million) for
demonstration projects supporting the objectives of the circular
economy and EU industrial competitiveness in a wide range of industrial
and service activities, and that this will add to the existing
Horizon 2020 programmes in this area. It adds that important research
and innovation funding opportunities are also available under
the Cohesion Policy, LIFE and COSME, as well as from the European
Fund for Strategic Investments and the European Investment Bank.
2.21 The Commission also draws attention both
to the key contribution which SMEs can make and to the specific
challenges they face, such as access to funding, as well as the
support which it is providing to them; to the need to develop
a suitably qualified work force (and the role which its Green
Employment Initiative and New Skills Agenda for Europe can play
in this respect); and to the global dimension, where it highlights
the need to cooperate with international organisations and other
interested partners as part of the efforts to reach the 2030 Sustainable
Development Goals.
MONITORING PROGRESS TOWARDS A CIRCULAR ECONOMY
2.22 The Commission says that a reliable set
of indicators is needed in order to assess progress towards a
more circular economy, and that Eurostat has already collected
a quantity of relevant data. It adds that it will work in close
cooperation with the European Environment Agency and Member States
to propose a simple and effective monitoring framework, including
key meaningful indicators for the main elements, which will be
published in connection with its reporting on the Sustainable
Development Goals, and include new indicators on food waste, as
well as ones based on existing Eurostat and other official data
(the quality of which the Commission will seek to improve).
The Government's view
2.23 In his Explanatory Memorandum of 18 December
2015, the Parliamentary Under Secretary of State at the Department
for Environment, Food and Rural Affairs (Rory Stewart) notes that
this Communication effectively supersedes the one produced by
the Commission in July 2014 setting out a Zero Waste Programme
for Europe, and that the legislative proposals which it is bringing
forward in parallel address the management of different wastes
aimed at helping the EU to move to a more circular economy.
2.24 He notes that many of these issues are already
being taken forward at both an EU and individual Member State
level, but that new legislation at this stage is proposed only
to give effect to measures relating to waste (with other potential
proposals being subject to a separate Explanatory Memorandum at
the point they are brought forward). He says that the Government
believes that a number of these are best achieved by being addressed,
or continuing to be addressed, at the EU level — for example,
in relation to product design standards; the funding of large-scale
innovation projects under Horizon 2020; and clarification of the
rules on by-products However, he stresses that it will be important
to ensure that such actions complement, rather than duplicate,
those being taken by individual Member States, which must have
the freedom to determine and implement those policies and actions
which are most economically and environmentally advantageous for
them, and which take account of their own wider policy objectives.
2.25 More generally, the Minister comments that
the Commission's thinking and proposed measures are intended to
build on existing work, including the Roadmap to a Resource Efficient
Europe, which set out a framework for action and highlighted the
need for an integrated approach across many policy areas and the
Commission's previous Communication in July 2014 on a Zero Waste
Programme for Europe. In particular, he observes that this latest
Communication is intended to facilitate the transition to a more
circular economy through policies which are more joined up (including
the whole value chain), through smarter regulation where appropriate,
and by funding support for research and innovation.
2.26 The Minister comments that improving resource
productivity is a central aim of the circular economy model, which
seeks to maximise the productive value of material resources,
and recognises that the items which society throws away, such
as packaging, food scraps and unwanted or broken appliances, all
have a potential value. Likewise, in reducing the use of virgin
materials and treating waste as a valuable resource, businesses
can seize economic opportunities by ensuring that energy, water
and resources are used more efficiently, and any exposure to fluctuating
commodity prices minimised (the Action Plan recognising the special
significance to manufacturers in the EU of the best use of critical
raw materials).
2.27 Overall, the Minister says that the UK welcomes
the broad direction of the Action Plan and the opportunities it
provides, and he points out that it includes to some degree a
number of ideas which the UK has supported, for example improving
coherence between existing EU legislation and initiatives around
product policy and design and chemical use; measures to facilitate
industrial symbiosis; and funding to encourage business innovation.
At the same time, the Government would like to see a scaling up
of voluntary approaches, including the Ecodesign Directive, believing
that more ambitious measures of this sort could reduce burdens
on businesses, and promote jobs and growth, especially in sectors
that are currently facing big challenges, although he stresses
that such measures must respect the principles of subsidiarity
and better regulation, and must not jeopardise existing successful
voluntary approaches.
2.28 The Minister concludes by saying that there
are some elements of the Action Plan which will need to be considered
in more detail as the Commission takes this work forward —
notably those which may lead to mandatory measures in the future,
including revised regulations for fertilisers, waste water, significant
changes to established national systems (such as those affecting
the collection and recycling of waste vehicles, and electrical
and electronic equipment). He says that the Government will want
to make sure that Commission proposals are developed with Member
States, allow flexibility, ensure that costs are justified by
expected impacts, avoid unnecessary burdens on business, and create
an environment which welcomes innovation, improves resource productivity
and helps increase business competitiveness.
Previous Committee Reports
None, but we draw attention to the representations,
initiated by the House of Lords European Union Committee, and
endorsed by 15 other EU national parliaments, inviting the Commission
to adopt proposals on food waste in the context of the circular
economy.
4 See (36203) 11592/14: Ninth Report; HC 219-ix (2014-15),
chapter 2 (3 September 2014). Back
5
http://www.parliament.uk/documents/lords-committees/eu-select/green-card/green-card-on-food-waste.pdf. Back
6
A methodology for measuring environmental performance. Back
7
This establishes a priority order from prevention, preparation
for reuse, recycling and energy recovery through to disposal (such
as landfill). Back
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