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Circular Economy: Commission delivers on its promises, offers guidance on recovery of energy from waste and works with EIB to boost investment

Questions and answers: progress made in the Circular Economy Action Plan, Proposal on Waste to Energy, and the new Circular Economy Finance Platform.

What has the Commission done to deliver on its Circular Economy Action Plan?

In December 2015 the Commission adopted an ambitious Circular Economy Package including legislative proposals on waste with recycling and landfill reduction targets, and a detailed Action Plan of measures to undertake by the end of its mandate, 2019.

Today, the Commission is reporting to citizens, the European Parliament and the Council on the progress being made to help foster a sustainable and profitable economy. The report highlights i.a.the following results and priorities:

  • Legislative proposals on waste, tabled by the Commission in December 2015, including: a common EU target for recycling 65 % of municipal waste by 2030; a common EU target for recycling 75 % of packaging waste by 2030; a binding target to reduce landfilling to maximum of 10 % of municipal waste by 2030;
    • Next steps – adoption of the proposals by the European parliament and Council in 2017, in line with the Joint Declaration on the EU's legislative priorities for 2017
  • Ecodesign Working Plan for 2016-2019, adopted by the Commission in November 2016. The Plan is based on the new approach introduced by the Juncker Commission focusing efforts on the product groups with the highest potential in terms of energy and resource savings, further reinforcing the evidence base for regulatory action and expanding the focus of future eco-design measures beyond energy efficiency to possible circular product requirements such as durability, reparability, upgradeability, design for disassembly, information, and ease of reuse and recycling.
  • Establishment of a Circular Economy Finance Support Platform, bringing together innovators and investors to find financing solutions for circular economy projects.
  • Action on Food Losses and Food Waste, including an EU Platform established in August 2016, to bring together stakeholders and identify best practices, preparation of EU guidelines on food donation and the use of foodstuff as feed
  • Legislative proposal on fertilisers, tabled by the Commission in March 2016, helping to create a genuine internal market for fertilizers from secondary raw materials, harmonising EU rules for products derived from organic waste and by-products, and providing rules for the recovery of nutrients for secondary raw materials
    • Next steps – adoption of the proposal by the European parliament and Council
  • Launch of the Innovation Deals, creating a pilot approach to provide practical help to innovators in overcoming perceived regulatory obstacles and ambiguities, e.g. in water, waste or energy innovations
  • Legislative proposal on online sales of goods, tabled by the Commission in December 2015, strengthening guarantees for consumers, protecting them better against defective products and contributing to durability and reparability of products
    • Next steps – adoption of the proposal by the European parliament and Council
  • Dedicated Horizon 2020 call for proposals: ''Industry 2020 in the circular economy'', €650 million investment in 2016 and 2017 to finance innovative demonstration projects for circular economy and industrial competitiveness
  • Industry-wide Construction and Demolition Waste Management Protocol, to improve the identification, separation at source and collection of waste, as well as logistics, processing, and quality management.
  • Guidance documents in the areas ofwater reuse and green public procurement
  • Guidance on how to integrate circular economy into Best Available Techniques Reference Documents (BREFs) for several industrial sectors, to reduce waste generation, boost recycling and reduce resource use, increasing the sustainability and competitiveness in the industries covered by the Industrial Emissions Directive
  • Revision of guidance on the Unfair Commercial Practices Directive, to address false, unclear, unintelligible, or ambiguous information, including claims related to the circular economy
  • Waste Shipment Regulation: As of mid-2016, a new tool on waste codes is available to customs officials to help identify waste crossing illegally EU borders as non-waste. The new measure is also expected to prevent the leakage of valuable raw materials out of the EU.

What measures will the Commission take next?

In 2017, the Commission will continue to deliver on the Circular Economy Action Plan. This will include the presentation of a strategy for plastics in the circular economy, an assessment of options for the improved interface between chemicals, products and waste legislation, a legislative proposal on water reuse and a monitoring framework on circular economy.

The strategy for plastics will improve the economics, quality and low rate of plastic recycling and reuse, it will address the significant leakage of plastics into the environment, in particular the oceans, and the high dependence on fossil-fuel as feedstock (more than 90 % of plastics today are still produced from fossil fuel feedstock).

The initiative addressing the interface between chemicals, products and waste legislation will notably address the traceability of substances of concern in products and their traceability in recycled materials and difficulties in the application of EU waste classification methodologies.

The legislative proposal on water reuse will set minimum requirements for reused water for irrigation and aquifer recharge. It aims to encourage efficient resource use and reduce pressures on the water environment and increase the recycling of nutrients contained in waste water. It will complement the existing EU water policy.

The circular economy monitoring framework will assess progress towards a more circular economy and the effectiveness of action at EU and national level. The monitoring framework will build on existing EU Scoreboards on Resource Efficiency and on Raw Materials, and include other meaningful indicators that capture the main elements of the circular economy. It will be aligned with the monitoring of the Sustainable Development Goals.

New action: How will the Circular Economy Finance Support Platform work?

The Platform will bring together representatives of the Commission, the European Investment Bank (EIB), National Promotional Banks, institutional investors and we will strive to include Member State ministries, NGOs and other key Circular Economy stakeholders. It will have a three-pillar structure to facilitate and support circular economy financing needs.

Pillar I – Circular Economy coordination and awareness raising: This will identify opportunities, raise awareness and share best practices amongst potential project promoters and other stakeholders. Furthermore, it will analyse the characteristics of circular economy projects and their particular financing needs, provide general recommendations on structuring and improving bankability of circular economy projects, and coordinate activities regarding financing of the circular economy. It will also disseminate information on financing of and investments in the circular economy.

Pillar II -Circular Economy Advisory: As a first step, the capacities and capabilities of existing advisory services in the EIB like the Innovation Finance Advisory, European Investment Advisory Hub (EIAH) and EIB in-house experts, as well as existing advisory services outside the EIB, will be mobilised. It will focus on providing support to development and structuring of projects and improving their bankability. The advisors will provide financial and technical expertise to potential Circular Economy project promoters, and proactively make potential project promoters aware of financing opportunities.

Pillar III – Circular economy financing: Existing Commission and EIB financial instruments - such as the European Fund for Strategic Investments (EFSI) and InnovFin EU Finance for Innovators initiative backed by Horizon 2020– may be used to finance circular economy projects when they meet existing eligibility criteria. In addition, if justified, the possible need for new, dedicated financial instruments for circular economy projects will be assessed.

As a first step towards making the platform operational, the European Commission will open a call for expressions of interest for members of an expert group that will focus on the activities under Pillar I.

New action: How to recover energy from waste?

Waste-to-energy encompasses various waste treatment processes which generate energy (e.g. electricity, heat or production of waste-derived fuel), each of which has different environmental impact and circular economy potential. Waste-to-energy processes can play a role in the transition to a circular economy provided that the EU waste hierarchy is used as a guiding principle which ranks waste management options according to their sustainability and gives top priority to preventing and recycling of waste.

When waste cannot be prevented, prepared for reuse or recycled, recovering the energy embedded in it and injecting it back in the economy is the next best environmental and economic option. In 2014, about 1.5 % of the total EU28 final energy consumption came from incineration of waste, co-incineration in kilns and anaerobic digestion.

The Communication adopted by the Commission today provides guidance to Member States on how to ensure properly balanced waste-to-energy capacity avoiding stranded assets.

New action: Restricting the use of certain Hazardous Substances in electrical and electronic equipment ("RoHS" Directive amendment)

This proposal adopted today will further facilitate second-hand market operations (e.g. reselling) and repair of electrical and electronic equipment. The proposal will benefit citizens and industry, for example by extending the lifetime of existing equipment, including costly medical devices, and boosting the repair and second hand market for certain types of equipment. Public authorities will benefit too, as the proposal could reduce administrative burdens and lower EU healthcare costs by an estimated €170 million by allowing hospitals to buy and sell used medical devices also after 21 July 2019.
The Commission also proposes two targeted exclusions from the scope of the existing RoHS Directive, without diminishing environmental protection: pipe organs, for reasons of cultural heritage, and certain non-road mobile machinery.

Why are hazardous substances in electrical and electronic equipment a problem?

Even when waste electrical and electronic equipment is collected separately for recycling, certain hazardous substances contained in old equipment can pose risks to health and the environment. This affects workers in recycling plants in particular. The most effective way to reduce such risks is to substitute such substances in electronics and electric equipment with safer materials. Restricting the use of hazardous substances is likely to enhance the possibilities and economic profitability of recycling of waste electrical and electronic equipment and decrease the negative impact on the health of workers in recycling plants.

For More Information

MEMO: Circular Economy Package: Questions & Answers
Communication: Closing the loop - An EU action plan for the Circular Economy
EU action plan for the Circular Economy
Implementation report
Waste-to-Energy Communication
RoHS Directive
Clean Energy Package
Communication on an eco-design working plan 2016-2019
EU Construction and Demolition Waste Protocol
Proposal for a Regulation on the making available on the market of fertilising products
Green Public Procurement
The EIB in the circular economy
"Assessment of access-to-finance conditions for projects supporting Circular Economy" by InnovFin Advisory and EIB Advisory Services

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