In the spring of 2019, the European Parliament’s (EP) vote to ban single-use plastics such as straws, plates, cutlery, and bags attracted a great deal of media interest, coming as it did during a period of greater discussion regarding the use of plastics in the United States.1 That discussion has included New York joining California in adoption of a statewide ban on plastic bags from retail sales,2 while other states such Alabama and Oklahoma are taking steps to join Texas, Arizona, and Florida in prohibiting local government from taxing or banning plastic bags.3
August 21, 2019 Feature
“Closing the Loop”: The European Union & the Circular Economy
By Sarah E. McMillan
What received much less attention, however, was the fact that the EP’s approval of a ban on these plastic products is part of a much larger and more ambitious package of measures designed to move European Union (EU) Members forward on issues of sustainability and the circular economy.
In the European Commission’s4 (EC) own words, the EU’s Circular Economy Action Plan, adopted in December 2015, is intended “to help European businesses and consumers to make the transition to a stronger and more circular economy where resources are used in a more sustainable way.”5
The European Vision of the Circular Economy
“In a circular economy, the value of products and materials is maintained for as long as possible. Waste and resource use are minimised, and when a product reaches the end of its life, it is used again to create further value. This can bring major economic benefits, contributing to innovation, growth and job creation.”6
The EC believes adoption of a circular economy to be “an essential contribution to the EU’s efforts to develop a sustainable, low carbon, resource efficient and competitive economy[]” providing “the opportunity to transform our economy and generate new and sustainable competitive advantages for Europe.”7
Creating a circular economy is seen as advantageous from an environmental point of view: lowering carbon dioxide emissions levels, saving energy, and helping to avoid the problems associated with using up resources faster than they can be renewed, including as air, soil, and water pollution. At the same time, the EC places a great deal of emphasis on the perceived benefits for industry and individuals. The circular economy will, according to the EC, “boost the EU’s competitiveness by protecting businesses against scarcity of resources and volatile prices, helping to create new business opportunities and innovative, more efficient ways of producing and consuming. It will create local jobs at all skills levels and opportunities for social integration and cohesion.”8
The EU’s Circular Economy Action Plan
The Circular Economy Action Plan covers a broad range of topics and industry sectors, but the focus is on production, consumption, and waste management.
With regard to production, the EC committed to promoting “reparability, upgradability, durability, and recyclability of products by developing product requirements relevant to the circular economy in its future work under the Ecodesign Directive[].”9 Also proposed is revised legislation on waste that would incentivize better product design by extending the responsibility of producers for their products. The EU already has waste measures in place that include Extended Producer Responsibility (EPR), whereby manufacturers have to pay for the treatment of the goods that they introduce into the marketplace at the end of those products’ lives, so the intention appears to be to revisit and extend or tighten those requirements. Under current EU legislation—The Waste Framework Directive (2008/98/EC)10—there is no obligation for Member States to adopt EPR schemes for packaging, a major concern with regard to sustainability. However, the EU does currently require EPR schemes with regard to waste electrical and electronic equipment,11 end-of-life vehicles,12 and batteries and accumulators.13 In addition to these lawmaking goals, the Action Plan contains policy goals including guidance on issuing permits for industrial installations in Member States and improved trade policy on sourcing materials, among others.
Consumption—the choices made by consumers—is also a focus of the Action Plan. In order to assist consumers in making more sustainable choices, there will be a move to improve labeling of products to help identification of the most efficient products, particularly energy-related products. Because price is a major influence on consumer choice, Member States will be encouraged to “provide incentives and use economic instruments, such as taxation, to ensure that product prices better reflect environmental costs.”14 In addition consumer protection legislation, such as consumer rights with regard to defective products and product durability will be reviewed, to encourage production and consumption of more durable products. Another aspect related to both production and consumption is repair; the EC plans to tackle the sustainability issues associated with built-in obsolescence and products that are simply carelessly designed with a lack of thought to the ability to repair them. In terms of legislation, “right to repair” laws could include requirements concerning availability of spare parts and repair information (for example, through online repair manuals).
The proposed action regarding consumption does not only concern shaping more sustainable consumer decision making. The EC also wants to see Green Public Procurement. Noting that public procurement accounts for 20% of European consumption, the EC plans to encourage emphasis of circular economy issues in public procurement and intends to lead by example in its own procurement and allocation of EU funding.15
Waste management is the third prong of the transition to a circular economy, although it is intrinsically intertwined with production and consumption. The EC notes that only around 40% of EU household waste is recycled, which “masks wide variation between Member States and regions, with rates as high as 80% in some areas, and lower than 5% in others.”16 Beyond review of EPR schemes, the Action Plan requires creation of a variety of legislative proposals on waste, including long-term recycling targets for municipal waste and packaging waste, and reduction of landfill.17
The EC’s Action Plan also identifies a number of industry sectors that face challenges in implementing a circular economy, and the Action Plan singles out the following “priority areas” that require targeted work in order to support the transition to a circular economy: plastics; food waste; critical raw materials, such as rare earth elements found in electronic devices; construction and demolition; and biomass and bio-based products, including products produced from wood, crops, and fibers, as well as biofuels.
In addition to the initiatives and legislative review concerning the areas identified above, the Action Plan also calls for the EU to boost the market for secondary raw materials (that is, materials that have been recycled and reintroduced as new raw materials) and water reuse. This includes development of quality standards for secondary raw materials, particularly for plastics; revised EU regulation on fertilizers to support the role of organic and waste-based fertilizers; and minimum requirements for reused water, for example, for use in irrigation.
The EC also will play a role in funding innovation and encouraging investment by others in related measures, and also will establish a process for monitoring the EU’s progress towards a circular economy, through the European Environment Agency.
Implementing the Circular Economy Action Plan
It is clear that moving from a linear economy to a circular one is an enormous task, or, rather, an enormous set of tasks. As noted above, the number of industry sectors and stakeholders affected is staggering. The EU’s plan reaches every corner of the economy and every single EU citizen. It appears that attempting to make such a transition based on purely voluntary actions is impossible. Indeed, while the EC recognizes that businesses and consumers are key in driving the transition to a circular economy, it also takes the position that the right regulatory framework at the EU level is necessary to facilitate achievement of that goal.
The role of individuals and national and local government is not underestimated, however. Because much EU law is ultimately implemented by the creation of legislation by Member States in accordance with EU directives, in addition to the EU-level actions, “[m]aking the circular economy a reality will [] require long-term involvement at all levels, from Member States, regions and cities, to businesses and citizens.”18
By necessity in a global economy, formation of a circular economy within the EU also will require joined-up thinking in terms of how the EU and individual actors interact with the world outside its borders. The Action Plan’s goals on sustainable consumption and production, for example, will need adoption of policies and standards that are consistent with the principles espoused by the EU when dealing with non-EU nations and entities that are heavily involved in the manufacturing process.19 Similarly, the objectives regarding waste and recycling will impact national and commercial relations with other states and their corporations.
According to the EC in April 2019, just over three years after adoption of the Action Plan, 54 actions under the Plan had either been completed or were being implemented, although that implementation will be ongoing for a number of years.20
Among the concrete achievements under the Action Plan is the revised waste legislative framework that entered into force in July 2018.21 That framework included revised recycling goals, which require that by 2030, 70% of all packaging waste and, by 2035, 65% of municipal waste should be recycled, and municipal landfill should be reduced to 10%. With a view to making the goals attainable for certain Member States, a five-year extension on these deadlines has been granted to Croatia, Cyprus, Latvia, Lithuania, Hungary, Malta, Romania, Slovakia, and Bulgaria.22
The revised framework also reinforces prior rules and creates new obligations regarding separate collection of biowaste, textiles and hazardous waste produced by households, and construction and demolition waste. It creates the planned minimum requirements for Extended Producer Responsibility. It also strengthens waste prevention and waste management measures, including for marine litter, food waste, and products containing critical raw materials.23
Similarly, a new regulation on fertilizing products that is currently in the legislative process, will introduce harmonized rules for organic fertilizers manufactured from secondary raw materials such as agricultural by-products and recovered biowaste. This legislation will, according to the EC, reduce significant market entry barriers for more sustainable and circular products, and includes limits on hazardous substances for all fertilizers, including from virgin raw materials.24
The implementation of the goals regarding plastics includes the legislation in the final stages of the legislative procedure that bans single-use plastic products25 and oxo-degradable plastic; measures to reduce consumption of food containers and beverage cups made of plastic; EPR schemes covering the cost to clean up litter, applied to tobacco filters, fishing gear, and other products; and various measures regarding marine litter, including plastic waste from the fishing industry and ships.26
Evaluating the Circular Economy Action Plan
The EC’s 2019 implementation report claims that the transition to a circular economy “has helped put the EU back on a path of job creation,” exemplified by a 6% increase in workers employed in sectors relevant to the circular economy between 2012 and 2016.27 The EC also reported that new business opportunities, both within and outside the EU, connected with the circular economy were created. As an example, in 2016 “circular activities such as repair, reuse or recycling generated almost €147 billion in value added while standing for around €17.5 billion worth of investments.”28
Despite these touted financial achievements, the EC notes that while recycling of municipal waste across the EU has increased, recycled materials contribute less than 12% of EU demand for materials.29 Waste reduction and the increased the lifespan of materials within the economy are key goals of a circular economy. Furthermore, the EC refers to a 2018 report by the think tank Circle Economy, which found that “full circularity would apply to only 9% of the world economy, leaving vast areas for improvement.”30 Circle Economy’s 2019 report repeated the finding that the “world [economy] is only 9% circular and the trend is negative.”31 According to Circle Economy—a group that wishes to see adoption of circular economy policies and systems globally—“[a]ll the key indicators confirm that the problems of a linear economy are ‘baked in’ to the global economy. Worse still, the engine of our linear global economy is stuck in reverse: we are heading in the wrong direction.”32 While reiterating the economic advantages to moving from a linear to a circular economy, the first concern given is that in order to limit global warming to 1.5°C above pre-industrial levels—the goal of the Paris Agreement33—a circular economy must be achieved.34
Thus, there is a question as to what extent a truly circular economy is achievable, and, more immediately, whether the EU’s Action Plan can move the economies of its Member States—and trading partners—from a linear economy to a circular one. While it is too early to evaluate the impact of measures introduced over the past three years, the European Environmental Bureau (EEB)35 opines that the planned measures have “suffered from unjustifiable delays” and complains that certain action points in the Plan are merely commitments to examine various policies in the future, rather than specific actions that are being put into practice.36
More particularly with regard to the legal regime required to make a circular economy a reality, a number of barriers have been identified, including the need to create tax laws that incentivize circularity rather than making use of virgin raw materials the cheaper option.37 Another regulatory issue that has been identified in this context is the lack of harmonization across EU Member States. This is not, of course, an issue that is solely a problem for an EU legal regime relating to a circular economy. The problems associated with unequal application of EU regulations in Member States have caused problems in a number of spheres, from agriculture and fishing to criminal law, throughout the EU’s existence. In the context of the circular economy, lack of even enforcement of the EU framework creates a challenge to creating a circular economy. For example, with regard to waste management—which is crucial to achieving the goal of keeping materials cycling through the economy for as long as possible—stakeholders have identified a need for consistent legislation and enforcement of that legislation across the EU.38 This view posits that if there are minimum requirements for the mandatory use of recycled/reused materials when producing goods in certain Member States, but not in others, then the entire project is undercut because there will be a tendency to concentrate manufacturing in the less sustainable—but, in the short term, less expensive—environments. The fact that certain Member States have been granted extensions for implementation of the revised waste legislation, for example, is an indicator that there will be uneven challenges across the EU in both creating laws consistent with the EU’s Directives and enforcing those laws in this sphere of activity.
One view that critiques of the EU Circular Economy Action Plan frequently have in common is that more can be done. The criticism is leveled not at the Plan’s vision, but at what is considered to be poor implementation. Opposition to the idea of moving to a circular economy at all is much less vocal, with the transition achieving support in the private sector as well as the public one. For example, some major corporations have adopted the approach and urged the EC to move forward with planning for a circular economy when it appeared that it might abandon the idea.39 No doubt tensions and opposition exist, but there does seem to be broad agreement across the public and private sectors that the potential gains both economically and environmentally mean that a move towards sustainability is desirable.
Closing the Loop
Making the EU’s idea of the circular economy a reality will take years, if not decades, of legislation and large-scale behavioral changes of both corporations and individuals. Perhaps it is so ambitious that it will never come to fruition in its entirety. What is clear, however, is that the world’s largest trading bloc has made a serious commitment and investment to take its myriad corporations and 500 million consumers into a circular economy in which banning plastic straws is just one small step in a long journey towards “closing the loop.” u
Endnotes
1. European Parliament Approves Ban on Single-Use Plastics, N.Y. Times, Oct. 25, 2018; E.U. Sets Standard with Ban on Single-Use Plastics by 2021, Time (Mar. 28, 2019), http://time.com/5560105/european-union-plastic-ban/.
2. Plastic Bags to Be Banned in New York; Second Statewide Ban, After California, N.Y. Times, Mar. 28, 2019. Hawaii has had bans on plastic bags in place at the local level since 2015.
3. Oklahoma Moves to Stop Towns from Fees, Bans on Plastic Bags, Associated Press (Mar. 24, 2019), https://www.apnews.com/1967c8e87be04f7abbccf7f545e55001; Alabama Senate Pushes Legislation to Stop Plastic Bag Bans, Newsweek (Apr. 10, 2019), https://www.newsweek.com/alabama-vote-prohibit-plastic-ban-1391753.
4. The European Commission is the EU’s politically independent executive arm. It is made up of a College of Commissioners, with each Member State appointing one member. For more information on EU institutions, see About the EU: Institutions and Bodies, European Union, https://europa.eu/european-union/about-eu/institutions-bodies_en, last accessed May 8, 2019.
5. Press Release, European Comm’n, Closing the Loop: Commission Adopts Ambitious New Circular Economy Package to Boost Competitiveness, Create Jobs and Generate Sustainable Growth (Dec. 2, 2015).
6. Circular Economy, European Comm’n, https://ec.europa.eu/growth/industry/sustainability/circular-economy_en, last accessed May 8, 2019.
7. Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and the Committee of the Regions, Closing the Loop—An EU Action Plan for the Circular Economy, COM (2015) 614 final (Dec. 2, 2015), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52015DC0614 [hereinafter Closing the Loop].
8. Id.
9. Id.
10. Council Directive 2008/98/EC, 2008 O.J. (L 312) 3.
11. Council Directive 2012/19/EU, 2012 O.J. (L 197) 38.
12. Council Directive 2000/53/EC, 2000 O.J. (L 269) 34.
13. Council Directive 2006/66/EC, 2006 O.J. (L 266) 1.
14. Closing the Loop, supra note 7.
15. Id.
16. Id.
17. Id.
18. Id.
19. Some argue that low-income countries are in many ways “more circular” than developed economies in how they deal with issues such as waste. See, e.g., Felix Preston & Johanna Lehne, A Wider Circle? The Circular Economy in Developing Countries, Chatham House (Dec. 2017).
20. Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Implementation of the Circular Economy Action Plan, COM (2019) 190 final (Mar. 4, 2019) [hereinafter Implementation].
21. Council Directives 2018/849–2018/852, 2018 O.J. (L 150) 93, 100, 109, 141 (June 14, 2018).
22. Implementation, supra note 20.
23. Id.
24. Id.
25. Plastic cutlery, plates, beverage stirrers, balloon sticks, straws, food and beverage containers and cups for beverages made of expanded polystyrene, and cotton bud sticks made of plastic.
26. Implementation, supra note 20.
27. Id.
28. Id.
29. Id.
30. Id.
31. Circle Econ., The Circularity Gap Report (Jan. 2019), available at https://docs.wixstatic.com/ugd/ad6e59_ba1e4d16c64f44fa94fbd8708eae8e34.pdf.
32. Id. at 8.
33. An agreement among the parties to the United Nations Framework Convention on Climate Change, reached on Dec. 12, 2015.
34. Circle Econ., supra note 31.
35. The EEB describes itself as “Europe’s largest network of environmental organisation[s] with around 150 member organisations from more than 30 countries.” Reaction to the European Commission’s Report on the Circular Economy, European Envtl. Bureau (Mar. 5, 2019), https://eeb.org/reaction-to-the-european-commissions-report-on-the-circular-economy.
36. Id.
37. R2π The Route to Circular Econ., Enablers and Barriers to a Circular Economy: Stakeholder Views Report (Sept. 2018), http://www.r2piproject.eu/wp-content/uploads/2018/08/R2pi-stakeholders-report-sept-2018.pdf.
38. Id.
39. Open Letter to Jean-Claude Juncker, President of the European Comm’n, from Michelin, Philips Int’l, Suez Envtl. & Unilever (Sept. 29, 2014), available at https://www.municipalwasteeurope.eu/sites/default/files/Industry%20coalition%20Letter%20Circular%20Economy%20FINAL.pdf.