EUropa.S. 2018 March
30th
– April 2nd | University of Piraeus
Organized by: Institute of Research & Training on European Affairs
EUropa.S. 2018
Study Guide
European Parliament ITRE Committee
Topic: EU Industry Policy: Green Growth Opportunities based on Circular Economy
ITRE Committee, “EU Industry Policy: Green Growth Opportunities based on Circular Economy“ Study Guide
Table of Contents Greeting of the Board
3
Introduction to ITRE Committee
4
Introduction of the Topic
5
Legal Framework
5
Industrial Policy
5
Energy Policy
7
Circular Economy
9
Waste Management
11
What is waste management?
11
Waste Framework Directive
12
Resource efficiency
14
Sustainable Production and Consumption
16
Eco-Innovation
17
What is eco-innovation?
17
Types of eco-innovation
17
Actions taken by European countries
17
Challenges
18
European Political Parties
18
Conclusion
20
Glossary
21
Questions Raised
22
Bibliography
23
Further Reading
24
Useful Links
25
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ITRE Committee, “EU Industry Policy: Green Growth Opportunities based on Circular Economy“ Study Guide
Greeting of the Board Distinguished Members of the European Parliament, It is our pleasure to officially welcome you to Europa.S 2018! It is our utmost honor to serve as Chairs of the Committee on Industry, Research and Energy (ITRE) and we are looking forward to sharing this amazing experience with you. Our committee will elaborate on a very crucial topic of the European policy framework which needs to be addressed efficiently and comprehensively. As a key driver of productivity and innovation, industry, together with security of energy supply and affordable energy prices has always been the cornerstone of economic prosperity, growth and stability in Europe. Since the greatest challenge faced by EU industries is to integrate environmental sustainability with economic growth and welfare, our agenda item was chosen in order to debate on ways to improve the overall environmental performance of industries based on circular economy, in conjunction with gradual increase of environmentally friendly energy sources and energy efficiency measures in their operation. Therefore, it is important to be familiar with the legal framework, the priority action lines as well as the challenges that have to be overcome in order to promote industrial competitiveness by providing green growth opportunities and sustainable development.
We hope that this Study Guide will assist your understanding as far as the aforementioned topic is concerned and will motivate you for further research. We are more than happy to meet all of you in person, admire your diplomatic skills and cooperate in the most efficient way in order to create an outcome that will exceed all expectations. Do not hesitate to contact us should you have any inquiries regarding the topic or the Rules of Procedure! Kind regards, The Board of the ITRE Committee
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Introduction to ITRE Committee ITRE constitutes one of the standing committees of the European Parliament dealing with numerous issues that relate to industry, technology, research and energy while it also establishes the policies to be followed on suchlike topics by the European Union. The ITRE Committee manages the EU potential lying on telecommunication and information technology while it explores the possibilities of the formation of a Digital Union, fully harmonized with the economic and political imperatives prevailing in EU. It further touches upon energy security and energy efficiency issues with the exploitation of smart infrastructure and interconnectivity between Member-States, while the Committee is also responsible for the space policy of the Union and the supervision of the Joint Research Center. One of its main competences is the drafting of the EU’s Industry Policy, focusing on the use of new technologies and infrastructure emphasizing also on measures concerning Small and Medium Enterprises (also known as SMEs). Finally, devising the European Research Policy, including the storage and sharing of research findings and scientific data falls within the mandate of the Committee on Industry, Technology, Research and Energy.
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Introduction of the Topic Though more and more countries are opting for green growth oriented solutions and the idea of a circular based economy seems to monopolize the interest of international fora, it should be underlined that both concepts have not been introduced until recently. The turn towards environmentally friendly economic models and the preference of the European institutions to bear in mind the safeguard of internationally acknowledged public goods when producing relative legislation should, by all means, be applauded. The introduction of notions such as, eco-innovation, energy efficiency and resource efficiency, raw materials, sustainable production and consumption patterns and waste management aspires to change radically not only the European financial model towards a sustainable and more competitive one but also the behaviour patterns of the European citizens leading up to the next era of the EU Industry Policy. What are the challenges that the Union may encounter? How will it overcome them? What is the feedback EU has secured from its Member-States?
Legal Framework Industrial Policy Article 173 of the Treaty of Functioning of the European Union (TFEU)1 clarifies the aims of the EU industrial policy, which can be stipulated as follows: a) Speeding up the adjustment of industry to structural changes, b) Encouraging an environment favourable to initiative and to the development of undertakings throughout the Union, particularly small and medium-sized undertakings, c) Encouraging an environment favourable to cooperation between undertakings, d) Fostering better exploitation of the industrial potential of policies of innovation, research and technological development. EU industrial policy in general, aims to foster growth and competitiveness in the manufacturing sector and the EU economy as a whole. It is well integrated into a number of other EU policies such as those relating to trade, internal market, research and innovation and environmental protection. It is not to be forgotten that even though the EU has supportive or coordinating competence for actions that are related to industry (article 6 TFEU), the EU institutions focus on ensuring that the necessary conditions for the competitiveness of the Union’s industry exist. Towards 1
EU-Lex, 2017. Treaty of Functioning of the European Union. Available at: http://eurlex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012E/TXT&from=EN [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 5
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this direction, the European Commission has issued a number of legally binding documents that ensure transition towards a circular economy which will boost environmentally sustainable growth for industries. In 2008, the Commission issued a communication entitled “Sustainable production and consumption and sustainable industrial policy action plan” [COM (2008) 397]2 which aimed at delivering a package of measures to foster more sustainable consumption and production, while making the European economy more competitive. In order to achieve this ‘virtuous circle’, the Action Plan proposed the use of a variety of policy instruments. For example, consumer demands were to be channeled towards more sustainable consumption through a simplified labeling framework. What is more, under the current growth strategy Europe 20203, on 2012 the Commission issued a communication [COM (2012) 582] 4 entitled “A stronger European industry for Growth and Economic Recovery” aiming at supporting investment in innovation, with a focus on six priority areas with great potential and more specifically: a) b) c) d) e) f)
Advanced manufacturing technologies for clean production, Key-enabling technologies, Bio-based products, Sustainable industrial and construction policy and raw materials, Clean vehicles and vessels, Smart grids.
This communication also highlighted the need for better market conditions, access to funding and capital, human capital and skills as means of promoting industrial competitiveness. Finally, in September 2017 the Commission outlined a renewed industrial policy strategy that connects all existing and new horizontal and sector-specific initiatives into a comprehensive industrial strategy. With the communication “Investing in a 2
EU-Lex, 2008. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Sustainable Production and Consumption and Sustainable Industrial Policy Action Plan[COM(2008)397]. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0397:FIN:en:PDF [Accessed on 08/12/2017] 3 European Commission, 2017. Europe 2020 Strategy. Available at: https://ec.europa.eu/info/businesseconomy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoringprevention-correction/european-semester/framework/europe-2020-strategy_en [Accessed on 08/12/2017] 4 EU-Lex, 2012.Communication from the Commission to the European Parliament, the Council,the European Economic and Social Committee and the Committee of the Regions on A stronger European Industry for growth and economic recovery[COM(2012)0582]. Available at: http://eurlex.europa.eu/legal-content/EN/ALL/?uri=celex:52012DC0582 [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 6
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smart, innovative and sustainable industry. A renewed EU industrial policy strategy” [COM (2017) 479]5 the European Commission aims to accelerate progress towards a circular and low-carbon economy that will improve the production of renewable biological resources and their conversion into bio-based products and bio-energy. The Maastricht Treaty incorporated issues of industrial policy for the first time, calling for a more dynamic European industry policy. Since then, the European Parliament has adopted numerous resolutions which have further contributed to the strengthening of the green growth of European industrial policy. In the resolution of 2014in reindustrializing Europe to promote competitiveness and sustainability6, the EP evaluated the current situation of the industry in Europe and proposed a variety of measures to tackle the current challenges. This resolution supported a “Renaissance of industry for a sustainable Europe” to pursue innovation towards a new industrial revolution.
Energy Policy7 Increasing evidence of climate change and growing dependence on energy has underlined the European Union's (EU) determination to become a low-energy economy and that the energy consumed is secure, safe, competitive, locally produced and sustainable. In addition to ensuring that the EU energy market functions efficiently, the energy policy promotes the interconnection of energy networks and energy efficiency. It deals with energy sources ranging from fossil fuels, through nuclear power, to renewable ones (solar, wind, biomass, geothermal, hydro-electric and tidal). Article 194 of the Treaty on the Functioning of the European Union introduces a specific legal basis for the field of energy based on shared competences between the EU and its member countries. We should briefly note that Europe is facing rising energy demand, volatile prices, and disruptions to supply. We also need to reduce the environmental impact of the energy sector. To tackle these problems, we need a clear EU energy strategy8. 5
EU-Lex, 2017. Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, Investing in a smart, innovative and sustainable industry, a renewed EU industrial policy strategy[COM(2017)479]. Available at: http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=COM:2017:479:FIN [Accessed on 08/12/2017] 6 European Parliament, 2014. European Parliament Resolution of 15 January 2014 on reindustrializing Europe to promote competitiveness and sustainability(2013/2006). Available at: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-20140032 [Accessed on 08/12/2017] 7 EU-Lex, 2017. European Energy Policy. Available at: http://eurlex.europa.eu/summary/chapter/energy/1801.html?root=1801 [Accessed on 20/01/2018] 8
European Commission, 2018. Energy. Available union/topics/energy_en [Accessed on 20/01/2018]
at:
https://europa.eu/european-
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In this respect, EU energy policy has 3 main goals: •
security of supply
•
competitiveness
•
Sustainability.
Energy Union
The European Commission has also launched plans for a European Energy Union, which aims to “ensure secure, affordable and climate-friendly energy for EU citizens and businesses. Energy will flow freely across national borders in the EU. New technologies, energy efficiency measures and renewed infrastructure will help cut household bills, create new jobs and skills and boost growth and exports. Europe will become a sustainable, low-carbon and environmentally-friendly economy. It will lead the way in renewable energy production and the fight against global warming. Energy Union will also help Europe speak with a single voice on global energy matters. Energy Union builds on existing EU energy policy, including the 2030 Energy and Climate Framework and the Energy Security Strategy.”9 EU energy targets
The EU has set itself energy and climate targets for 2020, 2030 and 2050: “Targets for 2020: •
Reducing greenhouse gases by at least 20% compared to 1990 levels
•
20% of energy from renewable sources
•
20% energy efficiency improvement.
Targets for 2030: •
40% reduction in greenhouse gas emissions
•
At least 27% EU energy from renewables
•
Increase energy efficiency by 27-30%
• 15% electricity interconnection (i.e. 15% of electricity generated in the EU can be transported to other EU countries) Target for 2050: 9
European Commission, 2018. Ibid. EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 8
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An 80-95% cut in greenhouse gases compared with 1990 levels. The Energy Roadmap 2050 shows how we could do this. How are we doing so far? The EU is well on track to meet the 2020 targets: •
Greenhouse gases reduced by 18% between 1990–2012
•
Renewables share reached 14.1% in 2012, up from 8.5% in 2005
• Energy efficiency expected to improve by 18–19% by 2020. This is just short of the 20% target. But we can meet the target if member countries enact all the necessary EU laws.”10
Circular Economy Moreover, a large number of programs and initiatives, covering a wide variety of fields, are undertaken by the European Commission in order to promote ecofriendly, innovative businesses that will contribute to the creation of a greener and resource-efficient economy. Circular Economy Package
On 2015 the Commission adopted an ambitious Circular Economy Package which includes revised legislative proposals to stimulate EU’s transition towards a circular economy which will boost competitiveness, foster sustainable economic growth and generate new jobs. The circular economy package consists of an EU Action Plan for the circular economy11 that establishes a concrete program of action, with measures covering the whole circle: from production and consumption to waste management and the market for secondary raw materials. The proposed actions will contribute to “close the loop” of product lifecycles through greater recycling and re-use and bring benefits for both the environment and the economy.
10
European Commission, 2018. Ibid. European Commission, 2015. Circular Economy Strategy. Available http://ec.europa.eu/environment/circular-economy/index_en.htm [Accessed on 08/12/2017] 11
at:
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EUROPEAN COMMISSION (2017) Policy and strategy for raw materials (online).Available at: https://ec.europa.eu/growth/sectors/raw-materials/policy-strategy_el
Eco-innovation Action Plan
Eco-innovation and green technologies are key factors to Europe’s future and at the heart of the EU’s policies. More than 3 million people already work for eco-industries in the EU and European businesses supply a third of the global market for green technologies. This is why the European Commission in 2011 adopted the Ecoinnovation Action Plan (EcoAP)12 with the aim of meeting the objectives set out by the EU’s 7th Environment Action Program (7EAP)13. The program sets out the vision to turn the Union into a green and competitive low carbon economy which will eventually be beneficial for EU industries. The strategy aims to transform EU into a more competitive, resource-efficient economy and acknowledges the key role of eco-innovation in the context of job creation, growth and competitiveness as well as environmental protection. As the numerous practical examples from industries demonstrate, eco-innovation in companies leads to reduced costs and improves capacity to capture new growth opportunities.
12
European Commission, 2011. Eco-innovation Action Plan. Available at: https://ec.europa.eu/environment/ecoap/about-action-plan/objectives-methodology [Accessed on 08/12/2017] 13 European Commission, 2016. Environment Action Programme to 2020. Available at: http://ec.europa.eu/environment/action-programme [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 10
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Raw materials initiative14
For the EU to remain competitive and preserve our environment, natural resources must be used in the most efficient way. Recycled waste can be injected back into the economy as secondary raw materials. To increase the quality and quantity of these secondary raw materials, waste management must improve. For that reason, the Commission is proposing a review of waste legislation to stimulate Europe’s transition towards a more circular economy. At the same time, the Commission is also aiming to develop EU-wide standards for secondary raw materials so that potential users can be sure about their quality.
EUROPEAN COMMISSION, 2017. Priorities for Circular Economy. Available http://ec.europa.eu/environment/green-growth/images/priorities_for_circular_economy.jpg
at:
[Accessed on 08/12/2017]
Waste Management What is waste management? According to the ninth definition provided by the Directive 2008/98/EC, “waste management means the collection, transport, recovery and disposal of waste, including the supervision of such operations and the after-care of disposal sites, and including actions taken as a dealer or broker”. One may question the causal link between waste management and the evolving capacities of the European economy. The truth is that the first serves and assist the 14
European Commission, 2017. Policy and Strategy for Raw Materials. Available at: https://ec.europa.eu/growth/sectors/raw-materials/policy-strategy_el [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 11
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latter for waste management inhibits the loss of a considerable amount of potential second raw materials, namely wood, metals, glass and paper. Given that all of these waste streams are turned into resource, it then follows that industries profit from the implementation of a rather circular economy scheme where “waste is eliminated and resources are used in an efficient and sustainable way”15. The benefits of a circular based economy are not, however, only of financial nature. Improvement of public health, reduction of greenhouse gas emissions, prevention of numerous negative repercussions such as landscape deterioration, littering, water and air pollution are only some of the plausible examples brought about by a circular economy. It is estimated that the average European produces enormous sums of waste in household terms, reaching the dramatic amount of half a tone. The problem becomes even more apparent since not even half of the waste ends up recycled or re-used while there are European States where the overwhelming majority of waste ends up lanfilled16.
Waste Framework Directive Bearing testament to all of the above, the European legislator decided to take action and introduced the Directive 2008/98/EC, otherwise known as the Waste Framework Directive, which aimed at tackling thorny issues of waste management and setting the foundation of a recycling Union. One of its novelties is the waste hierarchy, enshrined in Article 4 of the Directive, which refers to the 5 legally binding steps every country should take when regulating waste prevention and management (Prevention, Preparing for re-use, Recycling, Recovery, Disposal). Moreover, it encourages Member-States to opt for measures that could “deliver the best overall environmental outcome”, as well as “observe the general environmental protection principles of precaution and sustainability, technical feasibility and economic viability, protection of resources as well as the overall environmental, human health, economic and social impacts”17. The Waste Framework Directive provides a plethora of useful definitions and attempts to instill a life-thinking mentality material-wise to those whom it addresses. Establishing in its 6th Article the end-of-waste status, the Directive guarantees that
15
European Commission, 2017. Waste - Environment - European Commission. Available at: http://ec.europa.eu/environment/waste/ [Accessed on 08/12/2017] 16 European Environment Agency, 2017. European data centres. Available at: https://www.eea.europa.eu/data-and-maps/european-data-centres. [Accessed on 08/12/2017] 17 EU-Lex, 2017. EUR-Lex - 32008L0098 - EN - EUR-Lex. Available at: http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX:32008L0098 [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 12
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certain specified waste, having undergone processing, be it recycling or recovery, will “cease to be waste”18 and serve as the substance in the making of other products. The “extended producer responsibility” and the “polluter-pays principle” are two guiding principles introduced in this piece of legislation. The first is thoroughly outlined in the General Requirements of the Directive and provides for the flexibility of the producers’ policy as regards the return of products or waste from already used products as well as its management and financial responsibility taken from similar activities. The second principle ensures that the waste is disposed with respect to public goods, such as the protection of the environment and human health while at the same time passes on the cost of waste management activities to either the original waste producer or the current/previous waste holders.
European Commission, 2016. Directive 2008/98/EC on waste. http://ec.europa.eu/environment/waste/framework/ [Accessed on 08/12/2017]
Available
at:
Finally, through the recent Directive by the European Parliament and Council, the need for the adoption of waste prevention programs is ascertained. Prevention is placed at the bottom of the pyramid since it remains the cornerstone for the success of any plan that the European Union will come up with in trying to consolidate a circular economy. Therefore, States are urged to enforce programs with clear and cogent objectives and determine qualitative and quantitative indicators, endorsing any measure they deem necessary in order to so. Information sharing, know-how on the best available practices and guidelines are at the countries’ disposal when implementing waste prevention programs. It is also worthy of mentioning that the Waste Framework sets two targets to be achieved by the end of 2020 revolving
18
Ibid. EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 13
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around the recycling of household waste and the recovery of construction and demolition waste.
Resource efficiency Resource efficiency is a challenging topic of the European Industry Policy, the Resource Efficiency Flagship and a matter of great interest in the drafting of the Europe 2020 Strategy. Europe 2020 is a detailed agenda towards “sustainable and inclusive economic growth” that targets the strengthening of its “productivity and competitiveness”19, in a green growth context.
Know the Flu, 2014. How to dismantle the resource efficiency black box in chemical industries. Available at: https://www.ifu.com/knowtheflow/2014/how-to-dismantle-the-resource-efficiencyblack-box-in-chemical-industries/# [Accessed on 08/12/2017]
Before proceeding with analyzing the importance of a resource efficient Union, it is underlined that the above mentioned issue is closely interwoven with waste management and sustainability standards of consumption and production. Resource efficiency entails various aspects, and even political connotations, as it determines whether a society is self-reliable or not. Nevertheless, the whole European set-up is more dependent on material imports rather that self-sufficient. This dependence could turn out to be a weak and vulnerable point, considering that global competition is reaching its peak. The countries that have been traditionally established as natural resources bearing states enjoy a monopoly position when it comes to their distribution, leaving others dependent on them for the access and exploitation to the very same resources. Such 19
European Commission, 2017. Europe 2020 strategy. Available at: https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eueconomic-governance-monitoring-prevention-correction/european-semester/framework/europe2020-strategy_en. [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 14
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a sensitive equilibrium could easily be disrupted with innumerable consequences for businesses, their workforce and the economy at large. Moreover, the environment could also be at stake because of the widespread appearance of every form of pollution (from air to water and soil pollution), “acidification of ecosystems, biodiversity loss, climate change and waste generation”20. Notwithstanding the adequacy of natural resources and raw material for the viability of social and economic progress, it should be stressed that both the above mentioned and the capacity of the ecosystem that sustains us is finite and limited. Increasing resource efficiency can, for sure, secure successful economic output, but it cannot give answer to the timeless problems that pertain to it, mainly those of environmental nature. The real question for EU should be how it will dismantle economic growth from heavy dependence on resource use, lessening in such a way the magnitude of the environmental impact. In response to the challenge, the Commission came up with the Roadmap to a Resource Efficient Europe [COM (2011) 571]21 which embodies the European vision for a disentangled and viable economy by 2050 and paves the way for “structural and technological change”22. It, also, includes an analytic framework of actions to be evenly adopted by the Member-States in the short and the long run. The desired expectations behind the Roadmap are quite ambitious, conceivable nonetheless. The Roadmap to a Resource Efficient Europe aspires to lead to the establishment of a scheme where “more is created with less” and “greater value is delivered through less input”. The implementation of a resource efficient thinking, as the one explained above, will greatly contribute to achieving this goal with the minimum impact on the environment. The 2011 Communication is further receptive to a more international reading as it encourages utilization of channels of communication between the Union and its neighboring countries or other major international stakeholders suggesting the alignment of their resource efficiency policies. Concluding, the realization of the vision set by the Roadmap could not be accomplished without the cooperation of institutional bodies and the civil society. If transforming the economy can be of cost, attaining sustainable growth could be even more sumptuous. To this aim, a more resource efficient approach should be
20
European Environment Agency, 2017. Resource efficiency and waste. [online] Available at: https://www.eea.europa.eu/themes/waste/intro [Accessed on 08/12/2017] 21 EU-Lex, 2017. EUR-Lex - 52011DC0571 - EN - EUR-Lex. Available at: http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX:52011DC0571. [Accessed on 08/12/2017] 22 European Commission, 2017. Resource Efficiency - Environment - European Commission. Available at: http://ec.europa.eu/environment/resource_efficiency/about/roadmap/index_en.htm. [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 15
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integrated when estimating the EU budget through the enforcement of green solutions made by the private and the public sector.
Sustainable Production and Consumption A natural corollary of resource efficiency is traced in sustainable production and consumption. In the past years, international efforts, mainly articulated by the United Nations with the current introduction of the Sustainable Development Goals, have been noticed as regards the change in production and consumption patterns. Consumers and public purchasers are advised to pay attention to the information, provided by the products, concerning the “life-cycle impacts and costs of resource use” when making decisions. Especially, it is highly encouraged to lease rather than buy products, based on new entrepreneurial models, than can both satisfy “consumer needs with less life-cycle resource use”23. Most importantly, the re-establishment of newfound production and consumption patterns aims to instill an environmentally friendly mentality to consumers prompting them to purchase products suitable for repair or recycle, and even more products that could last more, cost less and do not generate waste.
The Energy and Resources Institute, 2016. Demystifying Sustainable Consumption and Production. Available at: http://www.teriin.org/index.php?option=com_featurearticle&task=details&sid=1042&Itemid=154 [Accessed on 08/12/2017]
23
Ibid. EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 16
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Eco-Innovation What is eco-innovation? “Eco-innovation is any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle”24. The quintessence of eco-innovation lies on its utilization as a driving force towards a resource-efficient economy through the shrewd application of manifold aspects of practices that surround the life-cycle of objects. While other concepts, such as waste management focus on the end of the life-cycle of products, eco-innovation currently serves as a means of minimization of the use of natural resources and the release of harmful substances over the whole life-cycle.
Types of eco-innovation There are numerous types of eco-innovation that can be found within a circular economy, such as product design, process, organizational, marketing, social and system eco-innovation, all of which aim at eliminating waste production, achieving smart consumption, creating from scratch smart cities and promoting green branding among many other services. However, one of eco-innovation’s main contributions is no other than the fortification of a solid circular economy through bottom-up and top-down alterations, especially via the transformation of consumers’ behaviour with products. Eco-innovative businesses constitute a prime example of how eco-innovation can play a pivotal role in the triumphant implementation of the 3R (reduce, reuse, recycle) waste management strategy. Specifically, the above-mentioned precepts are closely linked to the design of products. Here is where eco-innovation chimes in, through the emergence of revised business models which themselves enable sharing and collaborative consumption.
Actions taken by European countries Very few countries are witnessed to have adopted an action plan signifying the transition of their national economy to a circular one. Indicatively, Belgium has endorsed a roadmap named “Vers une Belgique Pionnière de l’Economie Circulaire” (“Towards a circular economy pioneering Belgium”) and developed by the federal government, the Netherlands have adopted the “From Waste to Resource programme”, Ireland came up with “Towards a resource efficient Ireland”, Austria legislated a “Resource efficiency action plan”, Finland the “National Material Efficiency Programme – Sustainable Growth through Material Efficiency” as well as “The National Action Plan towards circular economy”, while Germany created its
24
Eco-innovation.eu, 2017. Policies and Practices for Eco-innovation Up- take and Circular Economy Transition. Available at: http://www.ecoinnovation.eu/images/stories/Reports/eio_2016_report_small.pdf. [Accessed on 08/12/2017] EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 17
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own “Resource Efficiency Programme” (ProgRess) and its “Closed Cycle Management Act”25.
Challenges Having read the above, a transition to a circular economy may come off as easy or smooth. But the case is far from the opposite. In fact, there can be traced a lot of barriers that impede the Union from achieving its goals. Lack of investment in suitable infrastructure that could enable the consolidation of a circular based economy, challenges in attracting funds so as to finance green growth projects, insufficient knowledge, or even lack of economic incentives, are only some of the problems one may encounter when transforming the economic model on which the EU had been, till recently, operating. Nevertheless, apart from the reluctance of investors and the high levels of competitiveness that prevail the global market, it should be underlined that the structure of the European Union as well as the limited consumer awareness manage to make matters only worse. The fact that the European legislator appears to be active, does not engage his national counterparts to act accordingly. As mentioned above, there are still a lot of Member-States that need to act upon and regulate their domestic legislation towards a more green direction. Furthermore, no matter how discouraging, not all European citizens are familiar with notions such as eco-innovation, waste management or resource efficiency. This ignorance on behalf of citizens and potential consumers automatically hinders any noteworthy effort made to bring about the desired results
European Political Parties European People’s Party (EPP) “We must now put in place a sustainable and well-functioning European market for recycled materials based on the new Circular Economy Package. If we are to stay competitive in Europe, create more jobs and boost our economies, we must reduce our dependence on imported raw materials and energy. We must start to recycle, reuse and recover what we dispose of”. The words of the EPP president, Joseph Daul clearly indicate that the party is actively promoting circular economy and welcomes the Circular Economy Package that was introduced by the Commission. The MEPs of the EPP strongly believe that increasing recycle, re-use and recovery will help European businesses to strive towards a more efficient use of resources and give them a competitive advantage in global markets. 25
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In the center of the party’s priorities is also a proposal for a new circular economy that will provide great advantages for businesses, the environment and the economy. According to EPP’s vision, the new Circular Economy package will simplify regulations concerning businesses, establish incentives to support the creation of a well-functioning market for secondary raw materials and introduce measures to boost resource efficiency. The proposal needs to be realistic, market-oriented, ensure job creation and growth for industries. Furthermore, EPP also encourages the promotion of industry-led initiatives and fiscal incentives that stimulate a more circular economy. At the same time, it strongly supports the transition towards sustainable, low-carbon technologies and wants European companies to become market drivers while creating new green jobs and stimulating innovation in Europe. Progressive Alliance of Socialists and Democrats(S&D) The Socialists and Democrats of the European Parliament consider industries to be the backbone of the European economy. This is why their priority is to renew European industries by setting up research programs to promote sustainable jobs, growth and competitiveness and develop recycling and re-use policies in a shift towards circular economy. The MEPs of S&D are pushing through ambitious proposals for waste management as a first important step towards a circular economy. They propose the strengthening of separate waste collection systems for different kinds of waste in order to establish a high-quality recycling market. Moreover, they want to move away from a “take, make, dispose” model and replace it with a fast-turnover principle where products can be reused, recycled and remanufactured. According to Simona Bonafe, a MEP of the party, “the circular economy is the only solution to combine sustainability and industrial competitiveness. To allow us to fully close the loop, our waste policies must be embedded into a circular economy policy that focuses on the whole lifecycle of products”. European Conservatives and Reformists Group (ECR) According to MEP Mark Demesmaeker, “Circular economy is essential for EU’s longterm competitiveness and offers important opportunities for green job creation. The circular economy model reworks waste into secondary raw materials and makes Europe less dependent on third countries for its supply of resources”. The ECR party also criticizes the European Commission’s Circular Economy Package, with the main point of criticism being waste legislation. The party strongly believes that waste management should be transformed into sustainable material management, which can take the circular economy fast forward. EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 19
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Ιn general, ECR MEPs stress out the need to create incentivizing smart and innovative businesses models, based on resource-efficiency and life-cycle assessments as well as the enhancement of new consumption models which take into account an efficient use of resources. Alliance for Liberals and Democrats for Europe (ALDE) The MEPs of ALDE party recognize that circular economy is the most sustainable way to boost Europe’s competitiveness and strengthen businesses by making them more resilient to scarcity and volatile prices. They also underline the importance of the transition towards a more circular economy where the value of products, materials and resources are maintained in the economy, closing the loop of product lifecycles, greater recycling, reparability and re-use of waste materials. Moreover, ALDE party welcomes the Circular Economy Package emphasizing on the need for global development of the circular economy. At the same time, MEPs propose the creation of suitable frameworks to drive the transition forward in terms of industrial partnerships, funding for research and task forces to advise businesses on the transition to a circular economy.
GUE/NGL Party According to the MEP of GUE/NGL party Merja Kyllonen “Circular economy provides an opportunity for us to meet global environmental challenges more efficiently. More efficient utilisation of materials through different methods of recycling still requires energy and therefore a sustainable circular economy is not attainable without renewable clean energy. Thus, this debate is not only about making Europe a global leader in this sector but also about saving our planet”. The GUE/NGL party strongly supports the creation of a circular economy strategy in Europe where products are designed in order to facilitate reuse. MEPs have voted for proposals for four directives concerning waste management, aiming at moving the EU towards a more environmentally-friendly economic model that reduces the amount of waste by re-using, collecting and recycling. The proposals include minimum targets to be fulfilled by 2030 for recycling of municipal waste, recycling of packaging materials and reduction of food waste.
Conclusion In conclusion, since the industrial revolution, industries have been the cornerstone of economic prosperity in Europe. However, at the forefront of globalization EU’s industrial economy needs to become more sustainable and competitive. This will be achieved by integrating environmental sustainability with economic growth, being in EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 20
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line with the new EU Energy Policy strategy and improving the overall environmental performance of products throughout their lifecycle. Towards this direction, the European Commission has undertaken important measures by introducing several legal mechanisms and programs that will ensure the transition towards a low carbon and circular economy which will finally unlock green opportunities for European industries. The most important aspects of the new EU industrial policy which is based on circular economy include measures to ensure energy efficiency, resource efficiency, eco-innovation, sustainable production and consumption, waste management as well as sustainable use of secondary raw materials. However, in order to ensure a full transition towards a greener and more sustainable economic growth which will boost industrial competitiveness, important challenges have to be properly overcome. Specifically, there is an increased need for access to adequate finance, qualified personnel, regulatory requirements, know-how and awareness raising programs, so as to create the basis of a holistic green strategy. Its success depends on the efforts of the EU institutions, Member States, regions and most importantly on the active role of the industry itself.
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Circular economy: A circular economy is an economic system where products and services are traded in closed loops or ‘cycles’. Circular economy is characterized as a regenerative system with the aim to retain as much value as possible of products, parts and materials. This can be achieved through long-lasting design, repair, re-use, remanufacturing and recycling. Eco-innovation: Eco-innovation can be defined as any form of innovation aiming at significant and demonstrable progress towards the goal of sustainable development. This can be achieved either by reducing the environmental impact or achieving a more efficient and responsible use of resources. Eco-innovation projects aim to produce quality products with less environmental impacts and move towards environmentally friendly production processes and services. Waste management: Waste management is the collection, transportation, disposal of garbage and other waste products. It encompasses management of all processes and resources for proper handling of waste materials, from maintenance of waste transport trucks to compliance to health codes and environmental regulations. Raw materials: A raw material is a basic substance in its natural or semiprocessed state used as an input to a production process for subsequent modification or transformation into a finished good. EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 21
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Resource efficiency: Resource efficiency means using the Earth’s limited resources in a sustainable manner while minimizing impacts on the environment. Energy efficiency: Energy efficiency means to reduce the energy consumption in the whole chain of energy. On 30 November 2016 the Commission proposed an update to the Energy Efficiency Directive, including a new 30% energy efficiency target for 2030, and measures to make sure the new target is met. New national measures must ensure major energy savings for consumers and industry alike, national incentives for SMEs to undergo energy audits, large companies will make audits of their energy consumption to help them identify ways to reduce it and monitoring efficiency levels in new energy generation capacities.
Questions Raised 1. Is there a sufficient legal framework which ensures the creation of green growth opportunities for European industries? 2. In which ways could a circular economy benefit the environmental sustainability of industries and promote industrial competitiveness? 3. How could eco-innovation, waste management and use of raw materials contribute to the transition towards environmentally-friendly industrial models? 4. What are the challenges that need to be overcome in order to ensure a full implementation of a green industrial strategy based on circular economy? 5. Has the Waste Framework Directive achieved the aims it sets as to waste prevention and waste management? 6. What other examples of eco-innovation could contribute to the consolidation of a circular based economy? 7. Are there ways to overcome the challenges that the turn to a green European economy is presented with? 8. How can the average European consumer be sensitized towards adopting a more conscious and environmentally friendly behaviour? 9. How we could achieve the new, more ambitious, EU energy efficiency targets in the industrial sector?
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Bibliography 1. Eco-innovation.eu. Available at: http://www.ecoinnovation.eu/images/stories/Reports/eio_2016_report_small.pdf. 2. EU-Lex (2008). Communication from the Commission to the European Parliament, the Council,the European Economic and Social Committee and the Committee of the Regions on the Sustainable Production and Consumption and Sustainable Industrial Policy Action Plan[COM(2008)397]. Available at: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0397:FIN:en:PDF 3. EU-Lex (2012). Communication from the Commission to the European parliament, the Council,the European Economic and Social Committee and the Committee of the Regions on A stronger European Industry for growth and economic recovery[COM(2012)0582]. Available at: http://eurlex.europa.eu/legal-content/EN/ALL/?uri=celex:52012DC0582 4. EU-Lex (2017). Communication from the Commission to the European Parliament,the European Council, the Council, the European Economic and Social committee, the Committee of the Regions and the European Investment Bank, Investing in a smart, innovative and sustainable industry, a renewed EU industrial policy strategy[COM(2017)479]. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2017:479:FIN 5. EU-Lex (2017). European Energy Policy. Available at: http://eurlex.europa.eu/summary/chapter/energy/1801.html?root=1801 6. EU-Lex (2017). Treaty of Functioning of the European Union. Available at: http://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:12012E/TXT&from=EN 7. European Commission (2011). Eco-innovation Action Plan. Available at: https://ec.europa.eu/environment/ecoap/about-action-plan/objectivesmethodology 8. European Commission (2016). Environment Action Programme to 2020. Available at: http://ec.europa.eu/environment/action-programme 9. European Commission (2017). Europe 2020 strategy. Available at: https://ec.europa.eu/info/business-economy-euro/economic-and-fiscalpolicy-coordination/eu-economic-governance-monitoring-preventioncorrection/european-semester/framework/europe-2020-strategy_en. 10. European Commission (2017). Policy and Strategy for Raw Materials. Available at: https://ec.europa.eu/growth/sectors/raw-materials/policystrategy_el 11. European Commission (2017). Resource Efficiency - Environment - European Commission. Available at: http://ec.europa.eu/environment/resource_efficiency/about/roadmap/index _en.htm. EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 23
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12. European Commission (2017). Waste - Environment - European Commission. Available at: http://ec.europa.eu/environment/waste/ 13. European Commission (2018). Energy. Available at: https://europa.eu/european-union/topics/energy_en 14. European Environment Agency. European data centres. Available at: https://www.eea.europa.eu/data-and-maps/european-data-centres. 15. European Environment Agency. Resource efficiency and waste. Available at: https://www.eea.europa.eu/themes/waste/intro. 16. European Parliament (2014). European Parliament Resolution of 15 January 2014 on reindustrializing Europe to promote competitiveness and sustainability (2013/2006). Available at: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&re ference=P7-TA-2014-0032
Further Reading ➢ Analysis associated to a Resource Efficient Europe: http://ec.europa.eu/environment/resource_efficiency/pdf/working_paper_part1.pd f ➢ Circular Economy Strategy- EU Action Plan for the Circular Economy: http://ec.europa.eu/environment/circular-economy/index_en.htm ➢ Directive 2008/98/EC: http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX:32008L0098 ➢ Eco-Innovation Observatory 2016 Report: http://www.ecoinnovation.eu/images/stories/Reports/eio_2016_report_small.pdf ➢ Europe 2020 strategy: https://ec.europa.eu/info/business-economy-euro/economicand-fiscal-policy-coordination/eu-economic-governance-monitoring-preventioncorrection/european-semester/framework/europe-2020-strategy_en ➢ General principles of EU industrial policy: http://www.europarl.europa.eu/atyourservice/en/displayFtu.html?ftuId=FTU_5.9.1. html ➢ Green growth and circular economy: http://ec.europa.eu/environment/greengrowth/index_en.htm ➢ New industrial policy strategy: https://ec.europa.eu/commission/news/newindustrial-policy-strategy-2017-sep-18_en ➢ The Eco-innovation Action Plan: https://ec.europa.eu/environment/ecoap/aboutaction-plan/objectives-methodology ➢ The Roadmap to a Resource Efficient Europe (COM 2011/0571): http://eurlex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52011DC0571 EUropa.S. 2018, March 30th – April 2nd, Athens, Greece europas.irtea@gmail.com | www.europas.irtea.gr Page 24
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Useful Links ▪ ▪ ▪ ▪ ▪
Website of the EPP Party: http://www.epp.eu/ Website of the S&D Party: http://www.socialistsanddemocrats.eu/ Website of the ECR Party: http://ecrgroup.eu/ Website of the ALDE Party: https://www.aldeparty.eu/en Website of the GUE/NGL Party: http://www.guengl.eu/
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