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  • European Sustainable Enterprises Concerned About Commission’s Draft Circular Economy Package Proposal

    Title   : European Sustainable Enterprises Concerned About Commission’s Draft Circular Economy Package Proposal
    Date  :  21 December 2015

    As you may know, on December 2nd, European Commission Vice President Timmermans presented a proposal for a renewed “Circular Economy Package”. This communication, consisting of revised waste legislation and an “Action Plan”, is supposed to be ambitious in transforming the EU market into a circular economy. The good news is that in terms of structure, Timmermans has largely taken over the policy instruments recommendations from the business Manifesto “More prosperity, new jobs” by De Groene Zaak, Ecopreneur.eu and other organizations. However, due to the total lack of ambitious goals, the Package runs a serious risk of becoming a paper tiger.

    The objective of Ecopreneur.eu is to obtain a truly ambitious EU Circular Economy Package strengthening the market position of forward-looking EU companies by encouraging and facilitating circular business models with economic incentives. By circular procurement, financial benefits for circular products and services for producers and consumers, an EU Directive for circular design, and attractive research programs. The final decisions on form and implementation of the package will take place in 2016.

    Our main concern with the proposal is the total lack of targets over the full circle. Attention to enforcement of regulations is also limited. Without targets and enforcement, there will be no milestones. The package therefore runs risk of being ineffective, like a second EU Emission Trading System (EU-ETS). That is not what pioneering EU businesses are waiting for.

    On the positive side, the proposal does have clear potential. It contains the following crucial elements: Public Procurement, Extended Producer Responsibility, Ecodesign, Quality standards for secondary resource materials, a European Resource Efficiency Excellence Centre, a link with the EU Green Action Plan for SMEs, and the development of indicators to monitor progress towards a circular economy. Given proper implementation, these measures can give a boost to circular business models by increasing the demand for circular products and services, such as sharing, maintenance, repair, reuse, digitization, remanufacturing and recycling.

    For instance, the budget for public procurement is almost 20% of the EU GDP. The government acting as a launching costumer for circular products and services would boost innovation. In addition, Extended Producer Responsibility schemes are already active in Europe. They work by imposing lower levies on circular products and can be greatly improved and extended. Finally, the EU Ecodesign Directive, which is currently limited to energy efficiency, has great potential to accelerate circular design.

    Worrisome however is the lack of economic incentives for consumers. This could be achieved by opening up the VAT directive for differentiation on the basis of circularity. Another way to incentivise circular business models is by introducing a tax shift from labour to resources. Instead “Eco” labels are mentioned, which we consider ineffective to do the job.

    Finally, we miss a fundamental improvement of the access and attractiveness for SMEs of the Horizon 2020 research program, a lack of systemic policy research, and regret there will still be EU subsidy for incineration plants without proper guarantees to prevent over capacity.

    All now depends on implementation in 2016. Ecopreneur plans to work hard on obtaining a truly ambitious Package.

     

    Arthur ten Wolde is Circular Economy Expert for Ecopreneur and Manager Public Affairs Circular Economy for De Groene Zaak. Ecopreneur.eu is a new European business association of 6 national associations of sustainable enterprises. Ecopreneur represents more than 1500 SMEs as well as large companies. De Groene Zaak is the Dutch member association.  A joint position paper “Ambitious targets and consumer incentives needed for circular economy“ is available on http://www.ecopreneur.eu/en/?p=1150

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