Europe unlikely to meet 2030 circular economy targets

The European Environment Agency (EEA) has published a major report which analyses Europe’s efforts to transition to a circular economy. The assessment - ‘Accelerating the circular economy in Europe: State and outlook 2024’ - concludes that while some positive progress has been made, Europe is far from meeting circularity targets and further, bold action is needed.

Illustration of people in a repair shop depicting the circular economy in actionThe EU economy is resource-intensive, using more than eight billion tonnes of material every year to produce goods and services that are consumed by EU citizens or exported to other parts of the world. Around two thirds of these materials are extracted within the EU.

The EEA’s new report outlines the benefits of switching to a circular economy and discusses the EU’s progress within five key areas - resources and waste, policy leadership, implementing circular actions, consumption and a just transition. It also provides recommendations for accelerating the changes required.

A key takeaway is that switching to a circular economy is no longer just about waste management. Maintaining the value and longevity of materials is also critical.

The report explains: “The basis of the circular economy is concerted action at policy, business and individual level to optimise the use of resources and reduce the need to extract further raw materials.”

It’s no easy feat. The EEA states: “The task of reprogramming an entire economic system is mammoth and will require continued attention and effort in the coming years and decades.”

Europe’s progress towards a circular economy

According to the EEA, there have been “robust and dynamic” policy ambitions and actions at EU level. Namely, the Circular Economy Action Plan, part of the 2019 European Green Deal, outlines key priorities, principles and initiatives. The concept of circularity is well-defined and gaining momentum in Europe, the EEA claims.

Circularity principles have partially translated into national-level implementation, with some nations even going further than the EU directive requires. Circular economy ideas have also filtered into broader EU policy, such as those pertaining to industry and textiles.

The EEA reports that in recent years, Europe’s natural resource use has stabilised, with total consumption of materials in 2022 being two per cent lower than that in 2002. GDP has simultaneously risen (i.e. resource consumption has “modestly decoupled” from economic growth) and consumer spending has shifted from products to services.

The document highlights that we have also seen a modest decoupling of waste generation from economic growth, as well as an increase in recycling rates and the emergence of circular principles such as the sharing economy and circular business models.

Europe consumes a higher proportion of recycled materials than other world regions, with a circularity rate (defined as the percentage of total material use accounted for by recycled materials) of 11.5 per cent in 2022. The global figure is estimated to be 7.2 per cent.

Hurdles hindering circularity

Despite steps in the right direction, according to the report, not all EU members have adopted EU directives that are focussed on achieving a circular economy. Additionally, it takes time for circular initiatives to cause noticeable changes in behaviour and resource use.

Europe’s economy is still largely linear - centring mass production, built in obsolescence and short use phases of products. Resource use is still high and its recent stabilisation does not take into account materials extracted outside of Europe. According to the EEA’s findings, Europe’s reliance on global imports for things like fossil fuels and metal ores is increasing.

Recycling rates have also been stagnating in recent years, with many EU Member States at risk of missing waste recycling targets. There are few robust examples of circular business models in practice.

Consequently, the report states, Europe has a low or moderate likelihood of meeting its circular ambitions by 2030. In particular, it is far from doubling its 2020 circularity rate -  Europe’s 2022 circularity rate of 11.5 per cent is only one percentage point higher than that in 2010.

What Europe needs to do to achieve a circular economy

Alongside an assessment of the state of play within five key areas of the circular economy, the EEA report proposes policy, business and social actions that could accelerate the transition.

First, under the umbrella of ‘resources and waste’, the EEA emphasises that while reducing waste (the focus of circularity initiatives to date) is important, much more attention needs to be paid to reducing resource extraction and turning waste into secondary materials.

Setting targets for metrics other than waste collection and recycling - and tracking these with robust monitoring frameworks - could encourage reduced resource use. As could shifting from an income tax to a tax on raw materials.

Products should be circular and sustainable by design - for example, by using non-toxic materials and efficient production methods and being designed for recycling. Implementing the revamped EU Sustainable Product Policy, improving eco standards and labels, integrating the bio-based economy and boosting EPR schemes could help deliver progress.

Reuse, repair and repurposing should be promoted to maximise the lifespan of products. And to improve the quality and quantity of recycling, the EEA recommends pricing raw materials to account for their environmental impact, thus giving recycled materials an economic advantage.

Regarding ‘policy leadership’, the report calls for more pressure, incentives and support from governments. Policies should be bolder and include binding targets which are monitored by quantifiable measures with baselines and timeframes.

In discussing ‘implementing circular actions’ and ‘consumption in a circular economy’, the EEA highlights the need to change individual and organisational consumption behaviour, in the face of a society that is increasingly consuming.

We must consume better (buy products with lower environmental impact that are easy to repair and reuse), consume differently (adopt new practices such as sharing economies and ‘service rather than ownership-based’ models) and consume less (linked to ideas of ‘sufficiency’), the EEA says.

There is a need to understand the factors that shape consumption behaviour: “To transition towards more sustainable and circular consumption, it is necessary to understand why Europeans consume the way they do and what sustainable alternatives can be provided that address the functions fulfilled by current consumption.”

“Changing consumption habits and trends is difficult, as they fulfil individual and social functions that have become central to modern life”, the report points out. Therefore, sustainable behaviour change must be supported with appropriate finance, infrastructure, education, skill-building and standards.

Finally, the report explains the need for a ‘just transition to a circular economy’. Social co-benefits and principles of justice must be deliberately designed into the circular economy. That will require a better understanding of how social equity, inclusion and accessibility issues interact with circularity, as well as a consideration of how EU policies will affect the Global South, the EEA asserts.

Reminding us of the global nature of the circular economy dilemma, the report states: “Europe alone cannot curb unsustainable resource use occurring at global scale, therefore, a robust global governance framework on resource use and circular economy will be essential.”

Why switch to a circular economy?

Switching to a circular economy is critical to solving climate change, biodiversity loss and pollution. The UN’s International Resource Panel claims that 80 per cent of biodiversity loss and 50 per cent of planet-warming emissions are attributed to resource extraction and processing.

Reduced resource use, and wider circularity principles such as closed loop economies and regenerative production, can protect critical earth systems. Many circular initiatives also align with improving energy efficiency and reducing fossil fuel use, helping build a carbon neutral society.

Explaining the issues associated with a linear economy, the EEA report states: “This system creates a continuous demand to extract virgin raw materials, drives polluting production activities and generates large volumes of waste that require treatment.”

The report highlights that in delivering environmental benefits, switching to a circular economy can improve human health (through reduced pollution), wellbeing (through more ethical business practices) and security (through reduced reliance on imports).

Read the full report

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