Editor's note

EU is at the forefront of the global transition towards a low-carbon and circular economy. This is an opportunity to transform European economy and make it more sustainable, to create jobs and generate competitive advantages for Europe.

The European Commission adopted a “Circular Economy Package” in December 2015; about a year later, in January 2017, it proposed an “EU Action Plan” containing measures that cover the entire product life cycle. This Action Plan established concrete and ambitious programme of actions for the member states, with a timeline in its annexes by when these actions should be completed.

Source: The Action Plan and the “implementation report”, i.e. Commission report to the Parliament, the Council, the Economic and Social Committee and Committee of the Regions  on the implementation of the Circular Economy Action Plan, 26.1.2017 COM (2017) 33 final. In: http://ec.europa.eu/environment/circular-economy/implementation_report.pdf

Circular economy concept

A circular economy (CE) aims to maintain the value of products, materials and resources for as long as possible by returning them into the product cycle at the end of their use, while minimising the generation of waste. The fewer products are discarded, the less materials are used in production and the better it is for nature and environment.

This CSs process starts at the very beginning of a product’s lifecycle: with smart product design and production processes, with saving resources’ strategies, efficient waste management and, consequently, creating new opportunities for business.

In the recent European Commission publication (made by the Eurostat) on the monitoring framework in the circular economy process (with accompanying working documents), the Eurostat, the EU statistical office, has launched a new website section dedicated to circular economy reporting all the indicators of the monitoring framework, updated with latest data, as well as supporting visualisation tools. 

Source: the new Eurostat website on EU’s circular economy is seen in: http://ec.europa.eu/eurostat/web/circular-economy

European circular economy policy context

European circular economy principles have also been gradually integrated in industrial best practices, green public procurement, the use of cohesion policy funds, and through new initiatives in the construction and water sectors. The EU action plan, to be followed in the member states, covers the full lifecycle of products: from production and consumption to waste management and the market for secondary raw materials.

This transition is supported financially by the European Structural & Investment Funds (ESIF) with €5.5 billion for waste management. Additional support is provided by Horizon 2020 (EU program for research and innovation) with €650 million directed at investments in the circular economy at the member states’ level.

The aim of the circular economy package is to give clear signals to economic operators and society about the way forward. Actions on the EU level might drive investments at national level, create a level playing field and remove existing obstacles in the single market. The proposed actions should contribute to 'closing the loop' of product lifecycles through fostering more recycling and re-use and shall bring benefits to both, the environment and the economy.

This EU Action Plan is also accompanied by “monitoring instruments” to assess progress towards the circular economy in the member states. For this purpose, an indicator framework was developed: it will mostly use data which are already being collected, while undertaking necessary steps to improve the quality of these data. This indicator framework complements the “Resource Efficiency Scoreboard” and the “Raw Materials Scoreboard”, which were developed in recent years by the Commission.

General reference: http://ec.europa.eu/eurostat/web/circular-economy/policy-context

On resource efficiency, see: http://ec.europa.eu/eurostat/web/europe-2020-indicators/resource-efficient-europe; information on raw materials’ use see in: http://ec.europa.eu/growth/content/raw-materials-scoreboard-0_en

Clean energy transition

In November 2016, the European Commission presented a package of measures to keep the European Union competitive as the clean energy transition changes global energy markets. The Commission wants the EU to lead the clean energy transition, not only adapt to it. For this reason the EU has committed to cut CO2 emissions by at least 40% by 2030 while modernising the EU's economy and delivering on jobs and growth for all European citizens. The proposals have three main goals: putting energy efficiency first, achieving global leadership in renewable energies and providing a fair deal for consumers.

See more in: https://ec.europa.eu/energy/en/news/commission-proposes-new-rules-consumer-centred-clean-energy-transition; and “The EU`s transition to a low-carbon era is taking shape”, 11.05.2017. In: http://www.baltic-course.com/eng/modern_eu/?doc=129603&ins_print;

Four thematic areas in European circular economy The Commission monitoring framework is a key tool to measure progress and cover the different phases of the circular economy in the EU and Member States and, as a result, show if the existing policy initiatives are successful in delivering the expected outcomes and identify areas where more action is needed. It is an essential contribution to the EU's efforts to develop a sustainable, low carbon, resource efficient and competitive economy.

The framework is structured into four broad areas, covering ten specific indicators for each area in circular economy: a) production and consumption, b) waste management, c) secondary raw materials, and d) competitiveness and innovation.

Generation of municipal waste in Latvia: 410 kg per capita in 2016 (376 in EE & 444 in LT).

http://ec.europa.eu/eurostat/cache/infographs/circulareconomy/

1. Production and consumption are two main spheres to “organise” circular economy patterns: all economic sectors (mainly, however, industry and construction), as well as households should decrease the amount of waste they generate. In the long-term, such approach would contribute to reduction of raw materials/resources used in production. Eurostat statistics shows volumes of generated and recycled wastes in the EU states.  

In production and consumption area the following four spheres are addressed: a) self-sufficiency of raw materials for production in the EU, b) green public procurement, as an indicator for financial aspects; c) waste generation, as an indicator for consumption aspects,  and d) food waste.

Monitoring the production and consumption in transition to circular economy by households and numerous economic sectors should decrease the amount of waste. This strategy in the Baltics can change “consumption behavior” turning it from a linear to circular economy while increasing self-sufficiency of selected raw materials for production.

Latvian statistics on wastes in: http://ec.europa.eu/eurostat/web/circular-economy/indicators/monitoring-framework  

2. Waste management and recycling

Recycling materials and products used in production is a vital step in transition to CE. In waste management sector, the development  indicators focus on: a) the share of waste which is recycled in relation to the whole economy, and b) specific waste streams, such as packaging waste, bio-waste, e-waste, etc. Statistics show a better situation in various states concerning waste management. (See Table I).

This area focuses on the share of waste which is recycled and actually returned into the economic cycle to continue creating value.

Source: http://ec.europa.eu/eurostat/web/circular-economy/indicators/main-tables

3. Secondary raw materials

Recycled materials are used instead of newly extracted natural resources while creating new products. The secondary raw materials’ area comprises two indicators: a) measuring contribution of recycled materials to raw materials’ demand, and b) trade in recyclable raw materials among the EU states and with the rest of the world. .

Trade in recyclable waste sees in: http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do

4. Competitiveness and innovation sphere

As to the general “competitiveness and innovation” sphere, there are measures: a) to stimulate private investments, jobs and gross value added, and b) patents related to recycling and secondary raw materials as proxy to innovation and circular economy achievements.  

New Eurostat website section on Circular Economy

In the new Eurostat website section on Circular Economy you can discover, for instance that the circular economy sectors created around € 141 billion of value added in 2014, which represents an increase of 6.1% compared to 2012.

However, on average, recycled materials satisfy only around 10 % of the EU demand for materials, in spite of a steady improvement since 2004. For a number of bulk materials, secondary raw materials satisfy over 30 % of total demand for materials (e.g. copper and nickel). Furthermore, the EU is a net exporter of several major recyclable waste streams such as plastics, paper and cardboard, iron and steel, copper, aluminum and nickel.

Eurostat data also show that the recycling rates for packaging waste have increased in the EU states from 62% to 66% between 2008 and 2015. For plastic packaging, the average recycling rate in the EU is significantly lower, at 40%, even though there have been improvements in recent years.

Table I. Recycling rates in different waste’s sources

Source: http://ec.europa.eu/eurostat/web/circular-economy/indicators/monitoring-framework

*) Comparative table on the EU and Baltic States’ municipal waste at:    http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=cei_wm011&plugin=1

General reference: Eurostat press release “How is the EU progressing towards the circular economy?”, 16.01.2018, in:  http://ec.europa.eu/eurostat/documents/2995521/8587408/8-16012018-AP-EN.pdf/aaaaf8f4-75f4-4879-8fea-6b2c27ffa1a2  

Advantages for the Baltic States

Realizing governments’ efforts towards transition to more circular economy in the Baltics brings greater opportunities for national economies, in economies’ transformation from linear to more sustainable direction.

This transition enables: a) businesses to make substantial economic gains and become more competitive; b) national economies to deliver important energy savings and environmental benefits; c) regionally, creating local jobs and opportunities for social integration. Generally, circular economy’s trends are closely interlinked with key Baltic States priorities on jobs and growth, investments, the social agenda and industrial innovation (see Table II below).

In supporting business activity in circular economy, both the EU and member states’ efforts are vital. For example, at the end of 2015, the Commission adopted a Directive on online sales of goods. The proposal aims to strengthen guarantees for consumers to better protect them against defective products and contributes to the durability and reparability of products. This prevents products from being thrown away, and contributes strongly to the circular economy.

*) See Directive in:  

http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52015PC0635&from=EN 

Table II: European circular economy: jobs, growth and investments

Source: http://ec.europa.eu/eurostat/web/circular-economy/indicators

More on EU CE strategy, see: “Circular economy: new political economy guidelines”, 04.08.2017 in:  http://www.baltic-course.com/eng/editors_note/?doc=18227&ins_print.