On Thursday, the European Commission and the European Investment Bank (EIB) announced changes to EU financial tools to help circular economy projects and businesses secure funding and support the realization of EU climate goals. The changes open €24 billion (~US$26.4B) in funding for businesses looking to transition to a circular economy model.
The funding agreement InnovFin — a joint initiative launched by EIB and the European Investment Fund (EIF) in cooperation with the European Commission under Horizon 2020 — was originally designed to financially support innovation in the industrial and technological sectors. In light of the release of an updated (and, many say, less ambitious) circular economy package for the European Union last week, the funding criteria have broadened to include 'higher-risk, yet innovative' sustainable business models.
"This Commission has made the transition to a more circular economy a priority of our work,” said Karmenu Vella, European Commissioner for Environment, Maritime Affairs and Fisheries. “And for small and medium businesses across Europe, we are committed to making that transition as easy as possible. Now one week after we launched our proposal, we have a real financial commitment. Today's signing of an extension of funding coverage with the EIB will help our risk-takers make that leap to a more sustainable model of production."
The funding was announced Thursday at the “Financing the Circular Economy” conference in Luxembourg, alongside a new report from the EIB. Along with helping medium-sized businesses establish circular economy products and processes, the report also offers advice on the practical actions to finance the reuse, repair, refurbishing and recycling of existing materials and products. It also suggests establishing an external platform for institutional and private investors to support projects and encourage new applications.
“We must enable the transition towards a circular economy to unlock sustainable growth without consuming more resources, or consuming them in a smarter way — our collective future and prosperity depend on that,” said EIB president Werner Hoyer. “We at the EIB will continue to deploy technical expertise, advisory and financial firepower in support of those investment decisions which make our economies more circular, more sustainable.”
What do you think: How likely is it we'll see similar incentives and support services for such a shift here in the States?