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Circular Economy: what are the Benefits?

Designing products in a sustainable way, reducing waste, increasing consumer responsibility: these are the goals of the circular economy to reduce the huge amount of waste. The EU has identified key areas: let us find out what is in store for us.

The EU produces more than 2.2 billion tons of waste every year. New legislative initiatives on waste management promote a shift to a more sustainable model, known as the “circular economy”. But what exactly does circular economy mean? And what could its advantage be?

A new production model 

Circular economy is a production and consumption model which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products for as long as possible. This extends the life cycle of products. In practice, it means minimising waste. When a product reaches the end of its life, its materials are kept within the economy wherever possible through recycling. These can be used productively several times, thus creating additional value.

The new model contrasts with the traditional linear economic model, which is based on a ‘take-make-consume-use’ scheme: a model relying on large quantities of cheap and easily accessible materials and energy. Also part of the linear model is planned obsolescence: when a product is designed to have a limited lifespan, consumers are encouraged to buy it again.

Conversely, the reuse and recycling of products will slow down the use of natural resources, the destruction of landscapes and habitats and help limit the loss of biodiversity. Another benefit of circular economy is the reduction of total annual greenhouse gas emissions. According to the European Environment Agency, industrial processes and product use are responsible for 9.10% of greenhouse gas emissions in the EU, while waste management accounts for 3.32%.

Creating more efficient and sustainable products from the outset will help reduce energy and resource consumption, as it is estimated that over 80% of a product’s environmental impact is determined during the design phase.

Reducing the amount of waste 

Shifting to more reliable products which can be reused, updated and repaired will reduce the amount of waste. Packaging in particular is a growing problem and the average European generates almost 180 kg of packaging waste per year. The aim is to combat unnecessary packaging and improve its design to promote reuse and recycling.

Another effect pursued through the circular economy is the reduction of dependence on raw materials. Suffice it to say that, according to Eurostat, the EU imports about half of the raw materials it consumes. The total value of trade (imports and exports) in raw materials between the EU and the rest of the world has almost tripled since 2002, with exports growing faster than imports. Apart from this, the EU still imports more than it exports, resulting in a trade deficit of EUR 35.5 billion in 2021.

The recycling of raw materials mitigates the risks associated with supply, such as price volatility, availability and import dependency. This is especially true for critical raw materials, necessary for the production of technologies crucial to achieving climate targets, such as batteries and electric motors.

The shift to a more circular economy will also increase competitiveness, stimulate innovation and economic growth, and create jobs (an estimated 700,000 new jobs by 2030). Redesigning materials and products for circular use will also stimulate innovation in various sectors of the economy.

The main European initiatives 

In March 2020, the European Commission presented the Action Plan for Circular Economy, which aims to promote more sustainable product design, reduce waste and increase consumer responsibility, for instance by creating a right to repair.

Resource-intensive sectors, such as electronics and telecommunications, plastics, textiles and construction, were targeted. In February 2021, Parliament adopted a resolution on the new action plan for circular economy, which called for further measures to achieve a carbon-neutral, environmentally sustainable, toxic-free and fully circular economy by 2050, including stricter recycling standards and binding targets for material use by 2030.

In line with the EU’s climate neutrality target for 2050 as part of the Green Deal, the Commission published the first package of measures to accelerate the transition to a circular economy in March 2022.

The proposals included enhancing sustainable products, empowering consumers for the green transition, revising the regulation of construction products and creating a strategy on sustainable textiles. In October 2022, Parliament approved a revision of the rules on persistent organic pollutants (POPs) to reduce the amount of hazardous chemicals in waste and production processes.

The new rules will introduce stricter limits, ban certain chemicals and keep pollutants out of recycling. In November 2022, the Commission finally proposed new EU-wide rules on packaging, which aim to reduce packaging waste and improve packaging design, for instance with clear labelling to promote reuse and recycling, and call for a transition to bio-based, biodegradable and compostable plastics. 

Moving towards sustainable products 

In 2021, the European Parliament started discussing a comprehensive EU strategy for critical raw materials, based on sustainable supply and high environmental, social and human rights standards. The aim was to reduce dependence on certain non-EU countries, and to promote recycling and recovery of critical raw materials.

To achieve an EU market for sustainable, climate-neutral and resource-efficient products, the Commission aims to create digital product passports, with the objective of sharing all relevant information along the product life cycle.

This is complemented by initiatives to combat planned obsolescence, improve the durability and repairability of products, and strengthen consumer rights with the right to repair. Turning to the different industry sectors, the Commission’s action plan defines seven key sectors essential for achieving a circular economy: plastics; textiles; e-waste; food, water and nutrients; packaging; batteries and vehicles; buildings and construction. 

The goals to be achieved 

In the case of plastics, the European strategy for the circular economy should phase out the use of microplastics. Turning to textiles, it can be observed that textiles currently use a lot of raw materials and water, with less than one per cent being recycled.

The EU strategy for sustainable and circular textiles presented by the Commission in March 2020 aims to ensure that by 2030 textile products placed on the EU market will be durable and recyclable, made as much as possible from recycled fibres and free from hazardous substances. Measures against microfibre loss and stricter standards on water use are also under consideration. Electronic and electrical waste is the fastest growing waste stream in the EU, and less than 40% is recycled.

The EU is promoting longer product life through reusability and repairability. In the case of food, water and nutrients, it is estimated that 20% of food is lost or wasted in the EU. Therefore, the halving of food waste by 2030 will be urged as part of the Farm to Fork strategy.

Packaging waste in Europe has reached record levels. New rules aim to ensure that all packaging on the EU market is economically reusable or recyclable by 2030. New rules are also being considered that require the production and materials of all batteries on the EU market to have a low carbon footprint and meet ecological standards. Finally, construction accounts for more than 35% of total waste in the EU. The aim is to increase the lifespan of buildings, set targets to reduce the carbon footprint of materials, and set minimum requirements on resources and energy efficiency.

Source: Controllo e Misura by Publitec

Read also: CCS Technology for a Greener Future 

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