The Next Economy
The Circular Economy, Take 2:
Will Europe Fail or Fly?

The European Commission is expected to unveil its revised Circular Economy Package this autumn – an occasion that will mark the first significant piece of policy intervention in this space. The Commission is under pressure to get the detail right this time, having ditched the original proposals earlier this year, deeming them not ambitious enough.

The dropped package was weighted heavily towards waste regulation across EU member states. At the time it drew criticism for being too short-sighted with regards to circularity, and not linking up with more lifecycle thinking around product design, material optimisation and closed-loop reuse/remanufacture.

Vice President of the European Commission Frans Timmermans and his team have taken this feedback on board and pledged that any retabling will address the whole circular model – not just the outer loop of recycling, which is seen as having the least value. The Commission is now consulting on the process, so Sustainable Brands approached four leading circular economy experts who are feeding into the consultation to ascertain their views.

Carsten Wachholz, resource use & EU product policy officer at the European Environmental Bureau (EEB), says his organisation will be putting together a detailed response urging action on a number of fronts. These include addressing product design through the EU Ecodesign Directive, promoting cooperation along the supply chains to encourage product-service systems and new business models, and providing economic incentives to stimulate the demand side.

“The European Commission must be faithful to its promise – to be more ambitious,” he says. “We are cautiously optimistic that at least some of our ideas will be considered and finally followed up by implementation, hopefully.”

Christian Rudolph, CEO of Nextcycle, also underlines the importance of linking back to product design, by perhaps applying binding rules to the existing Ecodesign Directive and extending producer responsibility schemes. He is concerned, though, that the structure of consultation document still reflects a linear mindset.

“Complex problems rarely come along with simple answers, which is why a multiple-choice survey will never reflect my opinion on the transition from linear to circular,” he maintains. “I would have preferred to see sections on maintenance, repair, reuse, remanufacturing and material recovery, with sub-questions on ‘make, use, return’ in every one of those sections.”

According to Rudolph, the document lacks “an essential step connecting the use phase and secondary raw materials, which is the return phase, and questions on reverse logistics. This blind spot is the bottleneck for a transition to circularity.”

James Greyson, founder of think tank BlindSpot, goes one step further: He believes Europe is missing the point with circular economy.

“Debate has thoroughly explored every area of design except the one that really matters – the systemic shift to circular economics. I’d suggest that the fate of every kind of product containing every kind of material is directed by four simple economic design choices,” he argues.

According to Greyson, the four key questions that need asking are:

• Will we run a linear or circular economy?
• Will producers be responsible for knowing and paying for the risk that their products will become wastes in ecosystems?
• Will these payments be spent supporting action to close resource loops throughout the society?
• Is it Government’s role to handle all these transactions, or to provide the legislation and oversight so they are fair and effective?

“These design choices are a roadmap for a circular economy superhighway, led by markets that would be inherently circular. The alternative roadmap, set out in the EU consultation, is a maze of backroads that ignore and avoid the superhighway. It would essentially leave linear economics in place and rely instead on the power of government bureaucracy,” he asserts.

Some have also questioned the seemingly neutral stance of the consultation document; it appears the Commission is holding its cards very close to its chest.

“There’s nothing to give any feel of what approach they are building towards and there’s a risk of some kind of warped hybrid between linear and circular models if they don’t get the policy framework right,” observes Sandra Norval, managing director of Catalicity.

She emphasises the need for clear political vision. “There will be some sectors that will have more trouble moving to a circular model, but there needs to be a transition path laid out. Otherwise, what is the document for? If it’s just a gathering of the strongest voices and they try to keep everyone happy, it won’t be the groundbreaking, innovative leap forward that they have the opportunity to create.”

Greyson says he remains unconvinced that the final result will be the transitional lever that it needs to be. He believes there is too much reliance on targets to achieve progress, pointing out that targets are often limited by system constraints.

“The essence of a circular economy is a focus on taking action before things become waste – not prescribing what should happen with everything after it can no longer be used.”