Building wilth flag during the press conference of the European commissioner for Environment and Water Resilience and a Competitive Circular Economy Jessika Roswall in the Berlaymont the headquarters of the European Commission an institution of the European Union in Brussels in Belgium on 4th of Frebruary. (Photo by Martin Bertrand / Hans Lucas / Hans Lucas via AFP) (Photo by MARTIN BERTRAND/Hans Lucas/AFP via Getty Images)
Hans Lucas/AFP via Getty Images
Major businesses have called on the European Union (EU) to deliver a strong Circular Economy Act which will deliver ambitious regulatory proposals and create a true single market for circular solutions.
The EU Circular Economy Act aims to accelerate Europe’s transition to a circular economy, reduce dependencies on critical raw materials, and strengthen economic resilience.
Due for adoption later this year, the legislation also aims to double Europe’s circularity rate from its current figure of 12% to 24% by 2030.
A group of companies, in coordination with the Ellen MacArthur Foundation, recently delivered a joint letter to the European Commission, calling for ambitious regulatory proposals.
The letter states that circular business models are being held back by market fragmentation, inconsistent rules, and economic incentives that still favour linear approaches.
And it was signed by various businesses, including the LEGO Group, SAP and TOMRA.
The Ellen MacArthur Foundation also recently released a white paper setting out why the EU Circular Economy Act is a key opportunity for both European and national policymakers.
The Foundation’s business policy engagement lead, Carsten Wachholz, said the new EU legislation is important, because all the signs point to Europe missing its goal to double the share of secondary raw materials used to produce goods by 2030.
Wachholz added this trajectory comes at the same time as the EU wanting to become less dependent on imported materials, and growing concerns about supply chain disruptions due to wars and geopolitics.
“Companies are ready to invest, but they are hitting a wall, and these are always the same problems. Either markets are too small, or depend on whether you can transport used products, parts or secondary raw materials,” he told me.
Wachholz said the Circular Economy Act can change diverging definitions across different pieces of national waste legislation.
He added it can also provide additional guidance so that member states get to a common understanding about how these regulatory requirements should be implemented across the EU single market.
And he said it could also create a level playing field which puts circular business models on the same level as existing linear models, and allow companies to have more predictability and regulatory clarity to put the investments where they are needed, either in redesigning products, or in reverse logistics and recirculation.
“To bring it all together, businesses are asking for a market that works – consistent rules, fair pricing, and the kind of regulatory certainty that lets them invest at scale. These are the three big wins for the circular economy,” said Wachholz.