E–MAGAZINE OF THE MAŁOPOLSKA REGION BRUSSELS OFFICE
closer to Brussels 19
circular economy
Editor : Renata Jasiołek
Contact: Małopolska Region Brussels Office Rue du Luxembourg 3 1000 Bruksela Belgia bruxelles@umwm.pl
Design: advert www.advertstudio.pl
circular economy
Foreword
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Circular economy – an opportunity for businesses and consumers Elżbieta Bieńkowska
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From waste management to green economy
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”Closing” the circuit in the resources economy
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Expert’s eye on circular economy…
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Circular economy – implications for business
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Małopolska is conquering Brussels: Together in SYMBI project
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Hans Bruyninckx
Piotr Barczak
Sepp Eisenriegler
Tomasz Pilewicz
Michał Preisner
Questio iuiris
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Ladies and gentlemen, The issue of rationalisation of the economy with raw materials has been the subject of discussions for many years now – not only in terms of recycling, waste separation or incineration. The European Commission decided to take a step further, proposing solutions aimed at reducing both the volume of waste generated and extraction of new raw materials. The concept of Circular Economy consists in the maximum use of raw materials that have been already used once, to produce new goods. This way, after using a given product it will be possible to use elements thereof in production or repairs of similar or totally different products. What is important, for Małopolska the concept of Circular Economy is not in any way merely a slogan or a theory. Our region has lately become a part of an international consortium under the SYMBI project, which aims at bringing us closer to “circular economy” in our regional operations. Therefore I have now the pleasure to present to you this new, 19th edition of the “Closer to Brussels” e-magazine devoted to this modern and innovative approach. I believe that the European Commission’s point of view – presented by Commissioner Elżbieta Bieńkowska and the business model of applying “Circular Economy” rules will bring this concept closer to your hearts. I also hope that the practical examples presented in experts’ presentations will show you the path which we all need to follow even today when we are making further purchase decisions and repairs. We wish all the readers the best time reading the issue before you! Jacek Krupa Marshal of the Małopolska Region
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circular economy an opportunity for businesses and consumers
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Elżbieta Bieńkowska
Our economy cannot be based on ‘take, make, use and throw away’ approach.We need to use the resources we have in a smarter, more sustainable way by improving our resource efficiency and reducing our dependency on primary raw materials.
Everyday many resources are wasted in the European Union. Valuable raw materials are lost when we throw out old phones or flat TV screens. It is also estimated that millions of tonnes of food are wasted annually in the EU, while at the same time there are millions of people suffering from malnutrition around the world. Our farmers are using fertilisers manufactured from imported resources or from energy-intensive processes although our industry could valorise abundant bio-wastes produced in Europe. But what is now waste can turn into a valuable resource. What is now a problem can become an opportunity.
Elżbieta Bieńkowska since 1 November 2014 - EU Commissioner for Internal Market, Industry, Entrepreneurship and SMEs in the European Commission. Between 2007 and 2013 she was the Minister for Regional Development of Poland and from 2013 to 2014, the Deputy Prime Minister and the Minister of Regional Development and Infrastructure of Poland. As the Deputy Prime Minister and the Minister of Infrastructure and Development she was in charge of the strategic development system of the country, including the effective investment of the European
In a circular economy the value of products and materials is maintained for as long as possible. Waste is minimised and resources are kept within the economy when a product has reached the end of its life. These resources can be used again and again to create further value. This model can promote innovations that give us a competitive advantage and create secure jobs for Europeans. As a result of this process, consumers can benefit from more durable and innovative products.
funds. Her work resulted in the full absorption of the EU funds from the budget for 2004-2006 and the successful distribution of almost EUR 68 billion granted to Poland for the years 2007-2013. She was managing the process of the preparation of the efficient EU funds implementation system from the EU budget for the years 2014-2020. Her tasks in the Polish Government included also the management of transport infrastructure and issues related to construction and housing. A graduate of the
That’s why the circular economy is not only about reducing waste and protecting the environment. It is also a way to achieve prosperity and create new jobs.
Jagiellonian University. She also graduated from the Polish National School of Public Administration and completed the business administration post graduate studies at the Warsaw School of Economics.
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the transition will be supported in various ways financially by the EU structural funds
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It is a profound transformation of the way our entire economy works and an opportunity for industry, businesses and consumers. Many products we produce and use are made of natural resources that are finite or obtained from unstable regions. To ensure sustainable growth, we must find an environmentally and economically sustainable way of manufacturing and using them. To help us move towards a more circular economy where resources are used in a more sustainable way, the Commission has in December 2015 adopted an ambitious Circular Economy Package. The package will truly enable this change to happen. It covers the whole life cycle of products: from production and consumption to waste management and the market for secondary raw materials and sets out concrete actions to achieve a new model. The plans extract the maximum value and use from all raw materials, products and waste, fostering energy savings and reducing Green House Gas emissions. We have already started implementing the actions set out in the package. Our legislative proposal for a revised Fertilisers Regulation is designed to boost the use of organic and wastebased fertilisers. We have also adopted new guidance on unfair commercial practices and a revised handbook for Green Public Procurement to help public authorities buy goods and services with a lower environmental impact. And more actions will follow shortly. Works on the upcoming initiatives are well on the way and will continue throughout 2017 and 2018 in DG GROW as well as in DG ENV and many other DGs and services across the Commission which only proves how important the how cross cutting the subject is. To facilitate the transition to the circular economy, the Commission is also mobilising funding to help business to benefit from the Circular Economy. The transition will be supported in various ways financially by the EU structural funds, by EFIS. It is worth to notice that 650 million from the EU funding programme for research and innovation Horizon 2020 are allocated to ‘Industry 2020 in the circular economy’.
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circular economy will bring benefits not only to people and businesses now, but also to the future generations
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I realise that the move to a more circular economy will not happen overnight. But we are devoted to make this change happen. We have no other choice because nothing is given forever and the same applies to natural resources which will simply finish one day. We need to think about it already and we need to start acting now. All of us can by our daily routine support the more sustainable use of resources and to help the transition to circular economy. It will bring benefits not only to people and businesses now, but also to the future generations.
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from waste management to green economy
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Hans Bruyninckx
Our current resource use is not sustainable and is putting pressure on our planet.We need to facilitate a transition towards a circular, green economy by moving beyond waste policies and focusing on eco-design, innovation and investments. Research can foster not only innovation in production, but also in business models and financing mechanisms.
The European Commission proposed on 2 December 2015 a new legislative package on circular economy. The package covers different stages of a product’s extended lifecycle from production and consumption to waste management and the market for secondary raw materials. The proposed actions are designed to benefit both the environment and the economy, and extract the maximum value and use from all raw materials, products and waste, fostering energy savings and reducing greenhouse gas emissions.
Hans Bruyninckx Professor Hans Bruyninckx is the Executive Director of the European Environment Agency. Before he was head of the HIVA Research Institute in Leuven, Belgium, head of the Political Science department of the Katholieke Universiteit Leuven. Dr Bruyninckx has also been a senior member of the interdisciplinary Leuven Centre for Global Governance Studies and promotercoordinator of the Flemish Policy Research Centre
Over the last decades, legislation to protect the environment has evolved from issue-specific responses to more integrated and systemic responses. The circular economy package is one of the latest examples of such integrated policy responses and is certainly a significant step towards the European Union’s objective of ‘living well within the planet’s ecological limits’. Our European environment: State and Outlook 2015 report (SOER2015) underlines the sustainability challenge we are facing today. We are consuming and extracting more resources, both in Europe and in the world, than our planet can replace at a given time. On the one hand, economic activities contribute to human well-being and poverty reduction.
on Transitions for Sustainable Development (TRADO). Over the last 20 years, he has conducted and managed policy-oriented research in the areas of environmental politics, climate change, and sustainable development.
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potential reductions in waste could generate substantial gains for the economy and human health
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reducing dependence on raw materials
On the other, they pollute the environment, warm the planet, damage human health while weakening the planet’s capacity to provide for us. Climate change and population growth projection add to the urgency for comprehensive and immediate action. Although no country has achieved so far both ‘living well’ and within its natural means, there are some encouraging signs. The European Union has started to break the link between economic growth and consumption of energy and materials. Europeans are recycling a larger share of their municipal waste and sending less to landfills. Eco-industries (e.g. working on renewable energy, waste water treatment, air pollution control, etc.) have grown considerably over the last decade and created jobs despite the recent recession. A circular economy strives to reduce the ‘inflow’ of new resources, especially non-renewable resources, to use, re-use and valorise the resources in the economy as much as possible, and to minimise the ‘outflow’ of emissions and waste. The message is clear: potential reductions in waste could generate substantial gains for the economy and human health. Keeping already extracted resources in use would not only reduce dependence on raw materials (domestically extracted or imported), but also boost competitiveness while reducing environmental pressures. A preliminary analysis by the EEA shows that European countries are already taking action to improve their resource efficiency, mainly due to economic concerns linked to resource dependency. Waste prevention, recycling and better waste management in general are all certainly crucial to minimise the flows into and out of the economy. However, closing the material loop is not sufficient to prevent further impacts on the environment and human health and well-being. Circular economy approaches need to go beyond waste management, and facilitate a transition to green economy. We need to re-think the way we produce, consume and dispose of products.
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eco-innovation and research promoting innovative solutions are essential for a shift to a circular economy
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unlocking the eco-design potential
To start with, eco-design is essential for increasing recycling potential and extending the lifetime of products. We can design products in a way that they can be easily repaired, have only their broken pieces replaced and have their components easily sorted for optimal recycling. We also need to consider health and environmental aspects of the materials we use in our products. Eco-design could equally help replace materials with high environmental impacts with better alternatives. For example, it is clear that exposure to hazardous chemicals is a serious health concern. We can adopt clean materials cycles to prevent human exposure to hazardous substances and to protect ecosystems from chemical pollution. Similarly, bio-based materials, such as wood, crops or fibres, can be used for a wide range of products and energy needs. However, a potential to shift to bio-based materials should be analysed in view of associated ecosystem and health impacts. There are for example limits to forest exploitation and burning wood for energy could worsen air quality. Eco-innovation and research promoting innovative solutions are essential for a shift to a circular economy. Innovation is not only limited to production processes. New business models could be encouraged and supported. There are already many examples of innovative solutions providing services rather than selling products: you don’t for example need to own a car to meet your transport needs. Such collaborative business models focusing on service provision could benefit from new financing mechanisms, since investment and profit follow a different pattern in time. Public funds across Europe are already supporting eco-innovation but they can play an even stronger role than they do today. Investments in infrastructure, research and cities could all be geared towards facilitating the transition to a green economy. A strong commitment to sustainability backed by a clear financial and regulatory framework sends the right signal to all stakeholders.
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public funds are already supporting ecoinnovation can play an even stronger role than they do today
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investments to foster innovation
It is clear that moving towards a green, circular economy will benefit some groups and sectors, while putting pressure on others. Policy makers will need to take into account equity considerations, both within Europe and globally, and offer support measures to facilitate and steer the socio-economic transition needed.
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“closing” the circuit in the resources economy
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Piotr Barczak
“Future of the European economy does not include competition in manufacturing goods on the basis of finite natural resources. The closed cycle is the future of the European economy” Frans Timmermans, the first Vice-President of the European Commission (EC), December 2015
These words of major European politicians confirmed that the European Union intends to adopt circular economy (CE) very quickly. Prior initiatives in this area such as EREP (European Resource Efficiency Platform) or Communication of the European Commission ”Zero waste for Europe Programme” were confirmed when in December 2015 the European Commission (EC) presented the package containing proposals of amendments in directives and plans of further legislative initiatives intended to introduce Circular Economy in Europe . The purpose of these changes is to stimulate the process of European transition to the Circular Economy, which will improve global competitiveness and contribute to a permanent economic growth and creation of new jobs. Such complex transformation of the EU economy consisting of national economies would not be possible if not for cooperation of European institutions, including the Council of the European Union, namely the representatives of Member States governments. European Law is not created by the European Commission, but in a very detailed process in which the EU Council has the final say.
Piotr Barczak holds a Master degree in Geography with a specialization in Spatial Management and Regional Development, working on air pollution and the waste policy at the European Environmental Bureau (EEB). Organization, that he works for, is representing the voice of around 140 national NGOs dealing with environmental protection. The EEB Waste Working Group, that he chairs, consists of waste experts from Member States with hands-on experience in waste management and prevention measures. He collaborates closely with the Zero Waste International Alliance as well as with municipalities, progressive industry and waste management organizations. According to Piotr Barczak, consistent implementation of the Circular Economy as well as reducing and slowing down of this circuit will save European Market, create new jobs and will prevent the environment from pollution and destruction.
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return
make
use
LONGTERM BENEFITS
* **
Figures from the European Commission Impact Assessment
Figures from “The opportunities to business of improving resource efficiency” (2013), AMC et al.,
Modelling the economic and environmental impacts of change in raw material consumption” (2014), Cambrige Econometrics et al.
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building a circular economy in Europe www.dotinfographics.com
Therefore it is impossible to say that ”Europe imposes something”. It does not. In the case of environment protection or the CE concept, all Member States have mostly agreed that only joint and ambitious actions will have an effect. Such an attitude towards the CE developed by the representatives of all Member State governments can be read in June conclusions of the EU Council towards the CE.1 In December 2015, the EC presented the package consisting of two parts: 1) amended legislative conclusions concerning waste, establishing a clear ambitious long-term strategy of conduct concerning the intensification of recycling and limitation in quantity of deposited waste at the same time, including the proposal of specific measures used for reduction of obstacles preventing the achievement of improvement in the scope of waste management, taking into consideration various conditions present in different Member States. 2) a comprehensive action plan specifying the specific mandate for the present Commission for the period from 2015 to 2019. It specifies the measures used for ”closing the cycle” of the economy and referring to all stages of the product life cycle: from production and consumption, through waste management to a market of secondary raw materials. The action plan presents also a number of activities which will be focused on combating market barriers in particular sectors or material streams, such as plastics, food, critical raw materials, construction and demolition waste, biomass and bio-products, as well as horizontal actions in the areas of innovation and investment.2
1
http://www.teraz-srodowisko.pl/media/pdf/aktualnosci/2312-rada-ue-konkluzje-circular-economy-2016.pdf
2
http://europa.eu/rapid/press-release_MEMO-15-6204_pl.htm
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most preferred
preferred
least preferred
prevention
recycling
incineration and other recovery
preparing for re-use
disposal
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waste prevention = reducing the amount of generated waste (Fig2)
The first part is currently subjected to the legislative co-decision process. The Council of the EU started to work at the level of groups, in order to reach conclusions concerning the position of Member States in response to the proposal of EC. At the same time EP began to work on its own position. When all institutions have their own stances andare ready for negotiations, then the so-called trilogue (trilateral meeting) begins, which can take a few months. Considering such a large scope of proposals there is a possibility that the legislation process in this respect will not end earlier than in mid-2017. The package of amendments in directives concerns the Framework Directive on Waste, Directive on the Landfill of Waste and Packaging Directive. In short some amendments assume: - strengthening of activities aimed at counteracting waste generation - support the activities concerning preparation for reuse - increase in targets in the recycling level to 65% in total by 2030 - standardization of the calculating methodology of achieving these targets - increase in targets of packaging recycling levels to 75% by 2030 - reduction in waste incineration - binding targets for restriction for municipal waste landfill to maximum 10% by 2030. The guiding objective of such changes is to reflect the model of waste-handling procedure hierarchy in waste strategies (Fig2). Circular economy is a complex concept which covers a whole range of new business models, dematerialization of services, and economics of sharing. However, the regulation of waste management and removal of barriers and entities aiming at maintenance of the status quo and further wasteful waste management is indispensable.
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waste landfilling and incineration are harmful, because they lead to the loss of materials
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incinerating plants and landfills are not included into the circular economy
In the EU, the majority of household waste is not subjected to recycling: in 2013 in EU approximately 57% of solid municipal waste from households was disposed of3 - on average 275 kg per person. Landfilling and incineration are the two main methods of disposal (with or without power recovery). Although both methods are located at the bottom of the waste handling hierarchy, producing energy in some incineration forms is placed higher than landfilling. A disadvantage of this solution is the loss of resources that could be re-used in the economy. It is mostly related to generation of highly concentrated toxic gases and ashes, which has to be disposed of anyway. Additionally, there is a blockade effect, since the profitability of the plants depends on permanent deliveries of residual waste for the period of 20 to 30 years. From the point of view of the circular economy, waste landfilling and incineration are harmful, because they lead to the loss of materials, they increase import dependence and inhibit creation of new jobs and alternative business models. Both incineration plants and waste landfills are regulated at the level of EU4. In addition, they are the object of reference documents concerning the best available techniques (BREF) aiming at standardizing of the requirements for relevant plants in Europe and limitation of their impact on environment. However, the development of both methods does not proceed equally. In 2009 -2013 the level of incineration of solid municipal waste increased faster than recycling level, whereas landfilling was gradually reduced. This means that, so far, reduction in landfilling was more favourable for the incineration sector than recycling.5
3
Eurostat, 2015: http://ec.europa.eu/eurostat/documents/2995521/6757479/8-26032015-AP-EN.pdf/ a2982b86-9d56-401c-8443-ec5b08e543cc
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Waste incineration is addressed in the Directive on Landfill of Waste of 1999 and the Directive on Industrial Emissions. See: http://ec.europa.eu/environment/waste/landfill_index.htm
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Eurostat, 2015: http://ec.europa.eu/eurostat/documents/2995521/6757479/8-26032015-AP-EN.pdf/ a2982b86-9d56-401c-8443-ec5b08e543cc
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jobs creation: recycling & reuse vs disposal Source: Recycling means Business. Institute for Local Self-Reliance, 2002: https://ilsr.org/recycling-means-business
A
A
durables reuse
B
B
recycling / manufacturing
C
C
recycling / sorting
D
D
landfilling
E
E
incernation
0
10
20
30
40
50
60
70
jobs per 10,000 tons of materials
The current policy still favours incineration. In 2012, 20 Member States implemented landfill taxes, but only 8 addressed the issue of incineration6. What is more, all fees for incineration were lower than landfill taxes. As a result a number of reports draws attention to the risk of excessive waste incineration capacity in Europe7. At present, a clear limitation of waste landfilling and incineration is necessary, especially of non-processed waste suitable for recycling and composting, even if it is possible to use it to recover energy. As a result of the development of the Circular Economy concept, specialists noticed that some former solutions, instead 0 10 20 30 40 50 60 70 80 90 of bringing us closer, push us away from a true Circular Economy. Therefore, both the EC and EP will pursue strict limitation of the waste incineration method whether with power recovery or without it. The current and further expansion of outdated technologies of thermal neutralization of waste is not compatible with the Circular Economy concept. This is a technology, which in order to destroy resources, consumes resources. It is an element of linear economics, in which an element sustaining the system consists in continuous increase in quantities of generated waste. 6
Use of economic instruments and waste management procedures. DG - Directorate-General for Environment, 2012: http://ec.europa.eu/environment/waste/ pdf/final_report_10042012.pdf
7 See for example Europe’s waste incineration capacities in a circular economy. Von Gries, N & Wilts, H,
2015: http://www.icevirtuallibrary.com/doi/full/10.1680/warm.14.00009
100
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reuse and recycling create many more jobs than incineration & landfill
Incineration installations constitute expensive investments, contracted for many years with the given local territorial bodies which are obliged to send specified quantities of waste for incineration. When incinerating waste, we do not move towards more ecological Europe. On the contrary, we leave problematic ashes from the incinerating plant for the next generations and move ecological and ambitious initiatives for 25-30 years further away. At the same time, we loose the possibility of employment in repair and recycling sectors, let alone the environmental losses and wasting of natural resources. The European Commission proposes drastic limitation in landfilling to maximum 10% of the whole generated mass of municipal waste. It is difficult to deny all economic, aesthetic, social and environmental advantages which will be a result of elimination of waste landfills. From the Brussels point of view, practically each and every stakeholder – from nongovernmental organizations, housing communities, trade unions, to large companies and ministers of environment agrees with these desires. However, each of them proposes different methods of reaching this goal. An interesting approach is proposed by the incinerating plants lobby, which appeals for as quick as possible elimination of waste landfills across the EU (slogan: �zero waste to landfill�), which of course is caused by an economic interest. In countries where the recycling infrastructure is not yet sufficiently developed (as e.g. in Poland), rapid elimination of landfilling will force to make investments in seemingly fast, but obsolete and ineffective solutions, such as waste incinerating plants. It is a hazard, that must be foreseen by Polish politicians so as not to fall into the trap of long-term dependence on the need to produce materials for incineration, rather than investing in methods standing higher in the hierarchy the waste handling.
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experts eye on circular economy ...
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Sepp Eisenriegler
A circular economy is an economic model where resources and materials are continuously re-used and recycled to reduce waste and pressure on the earth’s natural resources. Estimates from recent studies show that a circular economy could create 2 million new jobs, save European industry costs worth over 600 billion EUR and lead to greenhouse gas emission reductions of between 2% and 4% every year.1
The problem: Consumer goods are now less durable and repairable than in the past. Scientific institutes/universities (Ökoinstitut Freiburg e.V, Universität Bonn, Hochschule Pforzheim2 ), public bodies (Joint Research Centre (JRC)3, European Environment Agency (EEA)4, German Environment Agency, Austrian Ministry for the Environment)5, independent repair service providers (Repair and Service Centre R.U.S.Z, Vienna)6, as well as media (BBC7, ARD, WDR, BR, ORF, ATV, PULS 4) investigated the increasing difficulties associated with attempting to repair modern electronic equipment including:
Sepp Eisenriegler founder of Repair and Service Center R.U.S.Z, Vienna, where long-term unemployed repair electronic devices. R.U.S.Z created an enormous demand for repair services which seeded the Repair Network Vienna. As a founding member of the EU umbrella for Social Economy RREUSE (www.rreuse.org) Sepp was responsible for the priority of reuse of electrical and electronic waste within the lobbying of the WEEE Directive together with other board members. For four
• Lack of access to and high costs of spare parts: costs of repair are often higher than purchasing a new appliance. • Lack of appropriate repair information: no free access to service manuals, software and hardware of product and components. • Product design and components without repair potential: new designs make it increasingly difficult to repair a product or components.
1
See European Commission Communication on Circular Economy (2014):: http://eur-lex.europa.eu/ legal-content/EN/TXT/?qid=1415352499863&uri=CELEX:52014DC0398R%2801%29
years Sepp Eisenriegler served as president of RREUSE and successfully lobbied in Brussels to include promotion of repair networks in the new EU Waste-Framework Directive. Currently he is lobbying the Ecodesign Directive, the Ecolabelling Directive and fights for ressource efficiency within the Circular Economy.
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These issues are not exclusively true for electrical and electronic products. For example, with the increased use of adhesives, staples and poor quality composite materials in furniture repairs have become increasingly difficult. These factors significantly contribute to the costs associated with repair, making direct replacement of a product, often the cheapest option for the consumer. A recent Eurobarometer study confirms this. Whilst 77% of EU citizens prefer to repair their products instead of buying new ones, they tend to replace or throw away their products instead of repairing and re-using them because costs of repair are too high. Not only is this a serious environment issue, not being able to repair an appliance also puts at risk the economic viability of professional but independent repair service providers. As a consequence of increasing obstacles and costs to re-use and repair, the decline of jobs in the sector has been noticeable for at least the past 30 years. In the Netherlands the number of repair specialist firms for consumer electronics dropped between 1990 and 1997 from 4500 to 2500 (Uneto1997)8.
2
Institut für Europäisches Wirtschafts und Verbraucherrecht e.V, Tobias Brönneke, Andrea Wechsler (Hrsg.): Obsoleszenz interdisziplinär. Vorzeitiger Verschleiß aus Sicht von Wissenschaft und Praxis, NOMOS Verlag, Baden Baden, 2015
3
http://susproc.jrc.ec.europa.eu/Washing_machines_and_washer_dryers/docs/omnibus_studyf_2014-03.pdf
4
http://www.umweltbundesamt.de/sites/default/files/medien/378/publikationen/texte_10_2015_einfluss_ der_nutzungsdauer_von_produkten_auf_ihre_umwelt_obsoleszenz_17.3.2015.pdf
5
ONR 192102:2014, the official Austrian Standard to label durable and repairable EEE.
6
Test Report ONR 192102:2014. Early Obsolescence and Reparability of Washing Machines: Test of 28 new washing machines against ONR 192102.
7
BBC One, Your Money Their Tricks, 2015: “By trying to restrict repairs on their machine to their own repairers, some manufacturers are effectively freezing out the competition.” http://www.bbc.co.uk/ programmes/articles/36pW614YM6Ykqxx4J07JB9h/who-can-repair-your-household-appliances
8
Uneto cited in Behrendt, Siegfried et. al.: Wettbewerbsvorteile durch ökologische Dienstleistungen: Umsetzung in der Unternehmenspraxis. Springer-Verlag 1999
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repair jobs in decline!
Elsewhere in Germany in one year alone 13% of radio and television repair shops closed in 1996 (Ax 1997, p.178)9. This downward trend is not only a Western European phenomenon. In Poland, between 2008 and 2010, the number of repair enterprises of personal and household goods decreased by 16% to 14,070 enterprises. In parallel, the number of persons employed during the same period decreased by 25% to 20,905 employees10. We have to promote more durable and repairable products by: • Advocating policies to make repair and re-use activities more competitive in order to provide more repair choices for consumers • Influencing product policy by including provisions with repairfriendly criteria including: •• Durable and easy to repair product design •• Spare parts availability must be guaranteed for longer periods •• Free access to repair service documentation and software for all re-use and repair centres Promoting ease of repair criteria extends the lifetime of a product and reduces the need to purchase a new one, saving on the energy and resources that go into production. In 2015 the European Commission was set to announce how it intends to revise both the EU Ecodesign and Energy Labelling Directives11.
9
Christine Ax cited in Behrendt, Siegfried et. al.: Wettbewerbsvorteile durch ökologische Dienstleistungen: Umsetzung in der Unternehmenspraxis. Springer-Verlag 1999
10 Polish Statistical Office presentation available online: http://www.google.be/url?sa=t&rct=j&q=&es-
rc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fwww4.statcan.ca%2Fenglish%2Fvoorburg%2FDocuments%2F2012%2520Warsaw%2FPapers%2F2024%2520-%2520Mini-presentation_on_Turnover_for_Consumer_and_Household_Goods_Repair_and_Maintenance_Poland. ppt&ei=A5mCVaa5JIL9UPeKgbAL&usg=AFQjCNGZTgHgJoxG78g9uLXfRlbyaVNnQQ&sig2=hyo9Xi4ZN0oajP3yrweFAQ&bvm=bv.96041959,d.d24&cad=rja 11
http://susproc.jrc.ec.europa.eu/Washing_machines_and_washer_dryers/index.html
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one third of all material arriving at recycling centres could still be re-used
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EU policy agenda
In addition, there are ongoing revisions to individual Ecodesign regulations for different product categories including domestic washing machines, fridges and dishwashers. These initiatives have tended to focus on the energy efficiency of new products, but their scope should be broader. These rules are a great opportunity to include repair-friendly criteria that could set a precedent for other products. Repair: The European Commission’s revised Circular Economy Package, if left unchanged, will not do enough to develop local repair centres, create jobs and prevent repair monopolies being currently built up by some manufacturers. Resource efficiency targets have to be implemented in the Eco Design Directive. The average lifespan and reparability of products has to be communicated, i.e. on the energy efficiency label. The prices of new products do neither reflect the environmental nor the social truth. Until externalized costs are internalized a reduced VAT for independent repair service-providers is necessary to install fair market conditions. Re-use: The European Commission’s revised Circular Economy Package, if left unchanged, will not do enough to develop local re-use centres, create jobs and stem the tide of re-usable goods sent to recycling or landfill every year. According to recent estimates, one third of all material arriving at recycling centres could still be re-used and at least one quarter of electronic waste still has significant re-use value. An estimated six million tonnes of textile waste is either landfilled or incinerated in the EU every year.
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circular economy implications for business
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Tomasz Pilewicz
Circular economy can be successfully applied to business models, goods, and services offered. It can be also applied to company’s philosophy and contribute to its market successes.
In 20th century, the main paradigm of developed world in relation to model of production and consumption was linear economy. In such a model the resources used to production of goods were manufactured, then sold, used, and disposed. In contribution to wealth of our 21st century society linear economy model started to reach its limits, and has been confronted with huge challenges. Challenges related to linear economy model refer, among others, to constantly growing world population, which is to reach over 8 billion people by 2030, what will impact on increased demand of resources and consumption. Significant part of resources used for manufacturing goods is not renewable, therefore their costs will also have to increase. In 2015 every EU citizen used on average 15 tons of materials per year and created over 4,5 tons of waste. Such consumption patterns additionally have negative impact of waste on the environment, and increase emissions, which EU policy tries to limit. In that context, a new, non-linear economy paradigm has emerged, which has deep implications for business. This paradigm is circular economy, which can be successfully applied to business models, goods, and services offered. It can be also applied to company’s philosophy and contribute to its market successes.
Tomasz Pilewicz Government and Public Affairs Manager at Philips in Central and Eastern Europe. PhD in Economics with specialization in Innovativeness of Economy (Warsaw School of Economics, Poland). Professional MBA in Entrepreneurship & Innovation (WU Executive Academy, Austria and USA). Member of Association of Polish Economists.
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circular economy requires innovation and continuous improvement
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Main principles of circular economy paradigm refer to separation of economic growth from the use of natural, finite resources and ecosystems, by using those respires more effectively, repeatedly, and in a way that eliminates waste. In 2015 the potential of circular economy in global consumer goods, material savings, and developing new markets were estimated at over EUR 500 bln. On the business side circular economy requires innovation and continuous improvement in the areas of design, management of materials, components, and products. It also requires new, sustainable business models, solutions, and services. Circular economy principles in activates of company can refers to the following tapestry of practices: • Selling a service not as a product, but rather as long term maintenance service enabling its multiple re-use. Such offering requires to bundle the service with repair agreements, service support, and technology upgrades required to extend its life time; • Offering replacements or repairs of major components in existing products; • Recovering components from existing products to create new products or repurposed products; • Recovering valuable materials from waste to be reused in new products; • Designing products in a way enabling its multiple lifecycles with minimal loss of value, quality and energy impact; Circular economy at company level goes far more than simple recycling. It requires strategy and operations related to the recovery and reuse of products and materials, processes and infrastructure enabling cost-effective collection, treatment and redeployment into the market of these products at high quality and often at high volume. One of companies embedding circular economy – thinking in its strategic vision and mission since 2013 as competitive necessity and conviction that solving resource constraints creates an advantage – is Royal Philips headquartered in the Netherlands.
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circular economy at company level goes far more than simple recycling
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The Netherlands claim to be a “circular hotspot”. During Dutch presidency of the Council of the European Union in the first half of 2016, the Netherlands provided many examples of how circular economy can be accelerated through support of central government, including so-called Green Deals – partnership agreements supporting implementation of sustainability programmes by business, or specific programme nurturing collaboration between government, NGOs, and business focused on circular economy innovation called Realization of Acceleration of a Circular Economy (RACE) backed up by Dutch prime minister Mark Rutte. An example of business model encompassing circular economy principles in health systems solutions offered by Royal Philips are leasing relationships with customers, which enable Royal Philips to buy back healthcare equipment belonging to the customer, upgrade it, refurbish it, and sell it on to another customer. Within the process, Royal Philips might upgrade equipment of the first customer to a more state-of-the art technology, sell it to another customer, and in doing satisfy both customers at the same time – the first one whose equipment is bought back, and the second to whom upgraded and refurbished equipment is offered. In 2015 such business model contributed up to additional EUR 200 mln of turnover for the company. Essential part of such business model is not only to refurbish equipment bought back to be able to guarantee it as new, but also to build lasting relationship with customers as long term technology partner, not as one-off equipment seller. As healthcare budgets are under increasing pressure, care facilities including hospitals are seeking ways to extend their resources without compromising on quality, which contributes to long term trend of circular economy business models looked for in healthcare. Through its dedicated refurbished systems business unit at Royal Philips, the existing medical equipment is de-installed at customer’s side by company’s trained workers and transported to a refurbished systems factory, which delivers refurbishments, upgrades and tests enabling full warranty. Thanks to these approach Philips can offer a variety of pre-owned, thoroughly refurbished, and tested against the quality systems.
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circular economy is perceived at the company as global trend and future
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Another example of business model encompassing circular economy principles can be found in Philips Lighting and refers to a new way of delivering light in form of performance contracts called “pay per lux”. In a nutshell this innovative business model delivers lighting as a service. It is a shift from the traditional paying for ownership of lighting equipment including luminaires and sources of light to paying only for the phenomenon of light, which is used. In this model customers pay only for the light they need, not for lighting equipment. Philips installs, maintains and upgrades the lighting system as needed and takes care of recycling at its end of life. The customers only pay for the light, and Philips Lighting takes care of the technology risk and the investment. The equipment can also be taken back when it’s the right moment to recycle the materials or upgrade them for reuse. The model is offered for both business, and municipal customers, including streetlight installations in Singapore, or Buenos Aires where 125,000 existing streetlights were exchanged for LED technology luminaires. In Buenos Aires Philips Lighting is responsible for installation, maintenance, and making sure that solution offered will run for a long time. Maintaining focus on circular economy requires discipline. At Philips a dedicated center of expertise for circular economy has been created to help with methodologies, programs, and to network through entire organization to support exploration of circular economy. Circular economy is perceived at the company as global trend and future.
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Małopolska is conquering Brussels: together in SYMBI project
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Michał Preisner
Circular economy constitutes an important concept in recent years, that finds an increasing expression in activities and documents of the European Union.This model assumes “closing the cycle” of raw materials by reduction in waste generation and increase in recycling.
In December 2015, the European Commission presented a regulatory package concerning industrial symbiosis and circular economy which aims at extensive systemic changes not only innovation and technological, but also at the organizational, social, financial and political level. These actions are consistent with the implementation of the program of effective use of resources in the strategy Europe 2020 for an intelligent and sustainable development, fostering economic growth. In response to this initiative an idea of international partnership was born, which will help the European regions in adaptation to assumptions of the Circular Economy model. It led to establishing of a project entitled ”SYMBI - Industrial Symbiosis for Regional Sustainable Growth and a Resource Efficient Circular Economy”. The project, which Małopolskie region became a partner of, was positively assessed and approved for financial support under the INTERREG Europe programme. The Project Leader is the Spanish foundation FUNDECYT – Estremadury Science and Technological Park, and other partners include administrative bodies, scientific and non-governmental organizations of seven states: Spain, Italy, Slovenia, Greece, Hungary, Finland, and Poland.
Michał Preisner graduate of the AGH University of Science and Technology in Krakow, the Faculty of Mining Surveying and Environmental Engineering. Since 2015, he has been working for the Department of the Environment in the Marshalls Office of the Malopolska Region. As a member of the Environmental Policy Team, he is responsible for topics concerning waste preventing. Since the beginning of the SYMBI project, he has been involved in the issues related to the circular economy, especially to the industrial symbiosis.
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goal of the SYMBI project is to support public policies leading to the circular economy model
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The actions planned in the project constitute a significant challenge for the involved institutions and regions. Achieving zero waste sustainable development model requires significant changes concerning policy and reforms at the territorial level, which forces the local authorities to implement a new, complex approach. Therefore the idea is to facilitate this process, which may benefit from an exchange of experiences among regional administrative bodies and concerned entities in the regions and joint development of solutions for transformation of the regional economy model. The primary goal of the SYMBI project is to support public policies leading to the Circular Economy model by supporting favourable instruments and activities. Their important element will be reduction in production costs and mitigation of environmental pressure resulting from a more effective use of resources and reduced greenhouse gas emissions. An important element of the activities in Małopolska is to convince the regional entities to use recycled materials and to create regional markets for such materials. It will require establishing an agreement and cooperation between the interested companies and institutions. Such platform for exchange of thoughts and cooperation will be created by meetings organized within the SYMBI. The project also envisages international study visits and inter-regional workshops with the participation of foreign partners and experts. During these events, the participants will review the assumptions of ”environmental” public procurement or revival of the secondary raw materials market. A study visit intended for exchange of experience on waste processing will also take place in Małopolska. Małopolska will also contribute to raising social awareness about industrial symbiosis and Circular Economy by organizing social consultations about new solutions and regulations concerning the use of secondary raw materials and waste management.
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residual waste
collection
raw materials (extracted domestically and imported/exported) recycling
circular economy diagram
design
production remanufacturing
consumption use, reuse, repair
distribution
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circular economy diagram European Environmental Agency, More from less - material resource efficiency in Europe, Report No 10/2016, p. 17, ISSN: 1977-8449, from: http://www.eea.europa.eu/publications/more-from-less
The project implementation was planned for the period from 2016 to 2021 and was divided into two phases: a three-year-long main phase (interregional) and an additional two-year-long regional phase, devoted to monitoring of implementation of the project results. After completion of the 1st phase an international conference will be held with participation of representatives of public authorities, during which regional solutions and recommendations developed in the project will be presented. Project Partners:
• Foundation FUNDECYT Scientific and Technological Park of Extremadura (ESP) • Environment and Territory Regional Ministry of Andalusia (ESP) • Malopolska Region - Regional Policy Department (POL) • Chamber of Commerce of Isernia – Molise Region (ITA) • Slovenian Government Office for Development and European Cohesion Policy (SLO) • Municipality of Kozani – Development and Planning Bureau (GRE) • Pannon Novum Regional Innovation Nonprofit LTD (HUN) • Regional Council of Häme (FIN) • Häme University of Applied Sciences Ltd (FIN)
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questio iuiris The 2nd of December 2015,The European Commission adopted ambitious new Circular Economy Package to boost competitiveness, create jobs and generate sustainable growth.
Sectoral measures are also set out, as well as environmental quality standards for secondary raw materials were established in The EU Action Plan for the Circular Economy. Key elements, that will lead to the waste Directives change include: • Setting a common EU goal concerning increase of the preparing for re-use and recycling target for municipal waste to 65% by 2030;
Proposal for Directive Of The European Parliament And Of The Council amends Directive 2008/98/EC on waste. As a result, in paragraph 2, the following points (c) and (d) are added:
c) by 2025, the preparing for re-use and the recycling of municipal waste shall be increased to a minimum of 60% by weight; d) by 2030, the preparing for re-use and the recycling of municipal waste shall be increased to a minimum of 65% by weight.
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• Setting a Common EU goal concerning increase of the preparing for re-use and recycling target for packing waste to 75% by 2030;
Proposal for a Directive Of The European Parliament And Of The Council amends Directive 94/62/EC on packaging and packaging waste. As a consequence, in paragraph 1, the following points (f) to (i) are added:
f) no later than 31 December 2025 a minimum of 65% by weight of all packaging waste will be prepared for reuse and recycled; g) no later than 31 December 2025 the following minimum targets by weight for preparing for reuse and recycling will be met regarding the following specific materials contained in packaging waste:
(i) 55 % of plastic; (ii) 60 % of wood; (iii) 75 % of ferrous metal; (iv) 75 % of aluminium; (v) 75 % of glass; (vi) 75 % of paper and cardboard;
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questio iuiris
h) no later than 31 December 2030 a minimum of 75% by weight of all packaging waste will be prepared for reuse and recycled; i) no later than 31 December 2030 the following minimum targets by weight for preparing for reuse and recycling will be met regarding the following specific materials contained in packaging waste: (i) 75 % of wood; (ii) 85 % of ferrous metal; (iii) 85 % of aluminium; (iv) 85 % of glass; (v) 85 % of paper and cardboard. • Setting a binding goal concerning gradual limitation of the landfilling of municipal waste to 10% by 2030;
Proposal for a Directive Of The European Parliament And Of The Council amending Directive 1999/31/EC on the landfill of waste is adding paragraphs 5 and 7:
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5. Member States shall take the necessary measures to ensure that by 2030 the amount of municipal waste landfilled is reduced to 10% of the total amount of municipal waste generated. (‌) 7. By 31 December 2024 at the latest, the Commission shall examine the target laid down in paragraph 5 with a view to reducing it and introducing restrictions to the landfilling of non-hazardous waste other than municipal waste. To this end, a report of the Commission accompanied by a proposal, if appropriate, shall be sent to the European Parliament and the Council.
19 closer to Brussels