Circular Economy – More Flexible Law: The 2015 Legislative Package

The European Commission put forward an initial circular economy package in July 2014, but withdrew the legislative proposal on waste included in the package in February 2015, in order to make way for a new proposals. On 2 december 2015, the European Commission presented its new circular economy package containing a Communication^[1] (Action Plan for the circular economy, toghether with a list of measures in annex) and four legislative proposals on EU waste policy^[2].

Moving towards a more circular economy has both an environmental and economic rationale. Potential opportunities include:

Reducing pressure on the environment: a circular economy would significantly reduce greenhouse gas (GHG) emissions through better waste management^[3]and reducing use of resources (such as energy, water, land and materials) in manufacturing, with positive impacts on climate. Large-scale reuse of raw materials could help to reduce landscape and habitat disruption as well as marine littering, which would in turn help to limit biodiversity loss.
Enhancing security of supply of raw materials: a circular economy would mitigate risks associated with the supply of raw materials, such as price volatility, availability, and import dependency. According to Eurostat Data, EU currently imports, in raw materials equivalents, about half of the resources it consumes.
Increasing competitiveness: a circular economy could bring savings to businesses and consumers through improved resources efficiency. A 2015 Ellen MacArthur Foudation Report estimates that by 2030, a shift towards a circular economy could reduce net resource spending in the EU by 600 billion Euros annually, bringing total benefits estimated at 1.8 trillion Euros per year once multiplier effects are accounted for. Additionally, research suggests that stricter environmental legislation can provide a competitive advantage to businesses.
Innovation: a circular economy could trigger a large innovation drive across sectors of the economy because of the need to redesign materials and products for circular use. The McKinsey Company consultancy highlights shows that this would apply even in sectors not normally considered as innovative, such as the carpet industry.
Growth and Jobs: a circular economy could strengthen growth and create new jobs. It is estimated that the transition would increase GDP by 1 to 7 percentage points by 2030, depending on whether a higher pace of technological change is taken into account, ^[4] and that it would have an overall positive impact on employment, although jobs in specific sectors could also be threatened^[5].

The European Commission estimated that the adoption of the legislatives proposals contained in the 2015 circular economy package would create over 180.000 indirect jobs in the EU by 2030 (2014 proposals) and 170.000 direct jobs by 2035 (2015 proposals). In addition, the Commission estimated in 2014 that increasing resource productivity by 30% could deliver over 2 million additional jobs in the EU by 2030 and indicated in 2015 that a circular economy could create 580.000 jobs.^[6]

Among the main measures put forward in the frame of the 2015 circular economy package we find the four Waste legislative proposals of directives^[7] . It seems to be important to underline the following points:

setting new waste management targets to be met in 2030, in particular increasing the share of municipal waste prepared for reuse and recycling to 65%, increasing the share of packaging waste prepared for reuse and recycling to 75% ( with specific targets for various materials used in packaging) and gradually limiting municipal waste ladfill to 10%;
introducing an early warning system for monitoring compliance with targets;
setting minimum requirements for extended producer responsibilirty schemes and differentiating the contribution paid by producers on the basis of the costs necessary to treat their products at the end of their life ;
promoting prevention (including for food waste) and reuse;
streamling provisions on by-products and end-of-waste status (the stage at the end of the waste treatment process when materials are no longer considered waste, provided they meet certain conditions);
aligning definitions, calculation methods for targets, reporting obligations and provisions on delegated and implementing acts.

In other terms, the legislative proposals on waste, adopted toghether with this Action Plan, include long-term targets to reduce landfilling and to increase preparation for reuse and recycling of key waste streams such as municipal waste and packaging waste. The targets should lead Member States gradually to converge on best-practice levels and encourage the requisite investment ion waste management. Further measures are proposed to make implementation clear and simple, promote economic incentives and improve extended producer responsibility schemes. The expected 2016 legislative procedural iter in the European Parliament for this Package is scheduled as follows :

ENVI Commission vote for october;
ITRE Commission vote for november.

[1] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Closing the loop –An Action Plan for the Circular Economy COM(2015)614 final

[2] These four proposals relate to : 1. The Waste framework Directive (2008/98/EC); 2. The Landfill Directive (1999/31/EC); 3. The Packaging Waste Directive (1994/62/EC); 4. The Directives on end-of-life vehicles (2000/53/EC), on batteries and accumulators and waste batteries and acumulators (2006/66/EC9, and on waste electrical and electronic equipment (2012/19/EU).

[3] The European Commission estimated that the adoption of the legislative proposals contained in 2015 circular economy package would avoid over 600 million tonnes of CO2 equivalent emissions by 2035 ( on average 30 million tonnes per year ). It is also indicated that a circular economy could reduce EU CO2 equivalnt emissions by 450 million tonnes per year. For comparison, 4477 million tonnes of CO2 equivalent were emitted in the EU in 2013. See also “The potential contribution of waste management to a Low Carbon Economy”, Eunomia, 2015.

[4] The Commission estimated in 2014 that a shift to a circular ecoomy would deliver a 0.8% GDP increase by 2030.

[5] The2015 Ellen MacArthur Foundation Report and The McKinsey Company consultancy hightlights, 2015 – , in European Parliamentary Research Service, Briefing january 2016.

[6] A 2015 report by Green Alliance, a UK think tank, estimated that an ambitious circular economy strategy could bring-in Italy, Poland and Germany alone -270.000 unemployed people back into work.

[7] Proposal for a Directive of teh European Parliament and of the Council amending Directive 2008/98/EC on Waste – COM(2015) 595 final; Proposal for a Directive of the European Parlaiment and of the Council amending Directive 94/62/EC on packaging and packaging waste – COM(2015) 596 final ; Proposal for a Direcitve of the European Parliament and of the Council amending Directive 1999/31/EC on the landfill of waste – COM(2015) 594 final; Proposal for a Directive of the European Parliament and the Council amending Directives 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and 2012/19/EU on waste electrical and electronic equipment-COM(2015) 593 final