Legislative update: Summer 2014
Angus Evers from King & Wood Mallesons considers whether the European Commission’s consultation on the circular economy is focusing on ever-decreasing circles
As global competition for resources increases, governments around the world are looking at how they can transform their traditional ‘linear’ economies into more ‘circular’ economies. There is no generally-accepted definition of a circular economy, but WRAP defines it as ‘an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life’.
The European Union (EU) has recognised that European industry and society are particularly dependent on raw materials from outside the EU and are therefore increasingly vulnerable to high prices, market volatility and the political situation in supplying countries. Against that background, in July 2014, the European Commission adopted a Circular Economy Package, which included a legislative proposal for the review of waste legislation. However, in December 2014, it announced the withdrawal of the proposal, stating that it would be replaced by a new, more ambitious initiative for the promotion of the circular economy by the end of 2015.
To help inform its efforts to promote the transition to a circular economy, on 28 May 2015 the European Commission issued a public consultation on the circular economy. The consultation focuses in particular on the production and consumption phases of the economic cycle, and in general on enabling framework conditions such as innovation and investment.
The consultation and the EU’s policies on the circular economy generally are of great relevance to the waste management industry as it currently exists. The potential for increased recycling is not the only aspect of a circular economy that impacts on the industry. The consultation seeks views on actions the EU could take to promote a circular economy in the production stage, such as through product design, production and the sourcing of materials. Possible measures under consideration include rules to improve the durability, repairability and reusability of products. The adoption of such rules would lead to more waste being moved up the waste hierarchy, so that waste is prevented (because products remain in use for longer) and products are reused, rather than becoming waste and being recycled, used for energy recovery, or landfilled.
The consultation also looks at how consumers make choices about the products they buy and use, and the factors that influence them in making those choices. It seeks views on the importance of various factors, such as the expected lifetime of products and the availability of spare parts, as well as the availability of repair and maintenance services. Again, if consumers are encouraged to buy more durable products and have them repaired when they stop working rather than dispose of them as waste, then there are ramifications for the waste management industry.
Another aspect of the consultation that is of direct relevance to the waste management industry looks at markets for secondary raw materials. Across the EU, such materials account for a small proportion of materials used, and the quality and supply of such materials depends on waste management practices and the degree of source separation of material streams. The consultation seeks views on the obstacles to the development of markets for secondary raw materials, actions that the EU could take to remove those obstacles, and the markets that should be targeted first to improve the way they work.
The consultation also seeks views on which sectors should be considered a priority for EU action in order to ‘close the loop’ of the circular economy and the role of enabling factors such as financing and incentives in supporting the development of the circular economy.
The consultation closes on 20 August 2015.