Documents considered by the Committee on 6 January 2016 - European Scrutiny Contents

2   EU Action Plan for the Circular Economy

Committee's assessment Politically important
Committee's decisionNot cleared from scrutiny; recommended for debate in European Committee A
Document detailsCommission Communication: Closing the loop — an EU Action Plan for the Circular Economy
Legal base
DepartmentEnvironment, Food and Rural Affairs
Document Numbers(37374), 14972/15 + ADD 1, COM(15) 614

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2.2  That document — which has yet to be debated — has now been superseded by this further Communication setting out an Action Plan for the circular economy.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.


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


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.


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.


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.


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.


2.19  The Commission notes that a number of sectors face specific challenges, which need to be addressed in a targeted way. These include:


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.


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.


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 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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