Government Gazette 2018: Vol 1

Page 18

Circular economy - a win-win approach


Sirpa PIETIKÄINEN mep Member, European Parliament

Europe cannot survive without improving resource efficiency


t has been forecast that global demand for resources will triple by 2050. We already consume some 1.5 globes’ worth of resources every single year, and following the estimates, would need around four planets-full of resources to satisfy the demand by 2050 under a business as usual scenario. There is just one problem with this: we only have one planet. European economies cannot survive – let alone grow and prosper – unless we take some radical steps to improve our resource efficiency and move towards a true circular economy. We have to stop wasting precious resources and start using them more efficiently. What we need is a true paradigm shift, one that will benefit both our economy as well as our environment. Europe is extremely dependent on imported raw materials and energy. The EU has had a trade deficit in raw materials since 2005. Material costs often represent 50 percent of a company’s total costs. Both raw materials and energy have continued to see a rise in costs. With raw materials running short, Europe is either going to be hit the hardest by resource scarcity or | 18

benefit the most from resource efficiency. We have to stop wasting precious resources and start using them more efficiently.

percent before 2030 would create two million new jobs while boosting our GDP by 1 percent.

In this challenge, there also lies a huge opportunity. The one who can deliver solutions for the resource efficiency dilemma is also the winner of the new economic race: this means solving the problem of doing more with less – creating more added-value with fewer resources.

Many businesses have already recognised these facts and started acting accordingly. They have taken a leap to a different mindset, to one where the whole logic of successful business is turned upsidedown. These firms have created new business models to deliver greater resource efficiency and circular models including increased renting, sharing, leasing and remanufacturing.

Business-driven studies demonstrate significant material cost-saving opportunities for the EU industry and a significant potential to boost EU GDP. The Commission has, for example, calculated that increasing resource productivity by 30

In circular economy there is no waste; products are designed to be durable, repairable, reusable and recyclable, and when they come to the end of their life the resources contained in these products are channelled back into productive use. In order to support this change we need to change the rules of the game. Regulation is never neutral. Legislation is one of the essential drivers of the business revolution. A lot of our thinking and also a big part of the current legislation is created for the needs of a consumeand-throw-away society and therefore has to be changed to fit the new world order. To drive the business revolution, we need to create a stable

and predictable regulatory environment. We need harmonised indicators to measure the change. We need clear targets. We need to draft such legislation as will make sure that what is considered waste nowadays is not considered such anymore – but seen as a resource. This requires a change to how things are being produced: products need to become more durable, easy to upgrade, reuse, refit, repair, recycle and dismantle for new resources. A reformed and enlarged EU Ecodesign Directive is a crucial tool to ensure resources stay in the loop. The directive should guarantee the implementation of principles of durability and reparability across all products. At the same time, encouraging a market in repair and in buying and selling of second-hand goods can promote jobs and reduce the amount of waste. This would also satisfy the consumer: according to the 2014 Eurobarometer, 77 percent of Europeans would rather fix their old appliances than buy new ones. This offers a perfect win-win market opportunity benefiting the economy, the environment and people. Perhaps the most compelling reason to embrace resource efficiency and circular economy models is that we don’t really have a choice.