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European Commission

[Check Against Delivery]

Janez Potočnik

European Commissioner for Environment

Speaking points by Environment Commissioner Janez Potočnik on Circular Economy

Press conference on Circular Economy and Green Employment Initiative

Brussels, 2 July 2014

Good afternoon Ladies and Gentlemen,

The package that the Commission has adopted today is significant, not just because there are many documents, or because it pushes the boundaries of our waste legislation, but because it marks a recognition that the growth path we are following is not the right one for Europe in the 21st Century.

This graph shows what I mean. Here you see the Human Development Index (HDI) on the horizontal axis, and the ecological footprint per person on the vertical axis. The dots you can see are clusters of countries.

(source: UN GEO 5 report, page 424 - UNDP 20009 HDI figures against 2010 Global Footprint Network Figures).

What it shows – to simplify – is that countries focus on improving their material standard of living – moving to the right – before they start to focus on reducing the environmental impact of their growth by moving down.

In order to achieve sustainability, countries must move towards the bottom right hand corner marked in green and as such decouple human development from natural resource use and environmental impacts.

Today not a single country falls within the "green box" of living well… and sustainably"

We need a growth model that enables the rich economies to move their economies to sustianable levels whilst improving living standards, and one that enables emerging economies to move across to the right without moving up to much.

We need to respect planetary boundaries. We need to accept the fact that natural resources are limited and that we are not using them in a sustainable way. Growing population and per capita consumption are challenging the very essence of our consumerism society. Our responsibility, individual and collective, is increasing and is incomparable to the responsibility mankind was facing a century ago. Change in unavoidable. Change in the way we produce, consume, in the way we live.

In Europe we recognised this in 2010 when we integrated resource efficiency as a flagship of the Europe 2020 Strategy. We made our objective to "decouple" growth from resource use and its impacts – this was our plan to get into the green zone – to achieve what the 7th Environmental Action Programme calls "Living well, within the Boundaries of the Planet". Environment policy was no longer to be seen as a constraint on growth. In fact our future growth would be determined by our ability to face resource constraints and get more value out of each tonne of materials, each hectare of land, each cubic meter of water, each joule of energy.

This makes sense both from an environmental and an economic point of view. Europe is densely populated, locked in resource intensive economic model, facing increasing, more volatile resource prices, which are already the dominating cost structures for majority of the companies, and we are import dependant for our resources and energy. So if we want to maintain our quality of life, and since we do not want to compete on global market by lowering our wages and social standards, we have no other option but to increase the value added through improving the productivity of both, labour and resources.

While labour productivity is already an important part of our policy activities, resource productivity is still very much an untapped opportunity. This package is a major conceptual contribution to the shift in the direction of improving resource productivity. It is an answer to the challenge of improving global competitiveness of European companies while protecting our quality of lives. It is an answer how to maintain strong industrial base in Europe and protect our health and environment.

It is essential for our future industrial competitiveness not only that we produce products using less raw materials, less energy and less water, but also that we are able to replace virgin materials and imports with supplies of secondary raw materials where they are available, and that we produce products that can be re-used, repaired, refurbished and recycled.

This is what we mean by a circular economy. In essence we propose to make Europe a society without waste. To take the 600 million tonnes of materials contained in our waste and pump them back into productive use in the economy.

So the package adopted today links our waste policy to our resource efficiency objectives by promoting circularity in our economies. It is a major contribution both to the Commissions policy for growth and jobs and to environmental protection. It is a clear recognition that both policies can go hand in hand, and that is why the proposals in the package are led not just by me, but by my colleagues, Laslo Andor, Maire Geoghegan-Quinn, and (my recently departed colleague) Antonio Tajani.

The package is a strategic answer to the new reality of globalisation and increasing pressures on limited and scarce natural resources.

So Europe's waste policy is becoming a "zero waste" policy.

We have already made strong progress towards increasing recycling and reducing landfilling over the last decade, driven by the targets in our main waste directives. But today we have to see waste as just one phase in a loop. As materials become more valuable so does our waste and this means that the main driver for future improvements in recycling will be demand pull for secondary raw materials.

So if you hear anybody say "we can't really afford today to invest in better waste management", ask them if they can afford to bury or burn valuable resources.

You may then be asking "if waste is becoming so valuable why doesn't this just happen anyway? Why do we need to intervene?". Our problem is that we are locked in to systems designed for the linear model and the incentives and infrastructures simply don't exist in the right places.

That is why today we have put the revision of our waste directives in the context of a wider package. A package that looks at every stage in the cycle of our production and consumption. A package that identifies the market failures and bottlenecks and sets out how to provide the right framework conditions for transition.

We look at how we can make markets for secondary raw materials work better, we look at business models that are more resource efficient, we look at how to encourage design for durability, for repairability, for recyclability. We look at how to provide consumers with better information about the life cycle impacts of products. And we propose an aspirational target to give us a clear direction for progress in achieving resource productivity, and to provide predictability and clarity for investors and businesses.

So exactly what have we adopted this week:

  • Revision of the targets of the Waste Framework Directive, the Packaging and Packaging Waste Directive, and the Landfill Directive.

And Four Communications

  • One setting out the overall approach to circular economy and proposing a possible resource productivity target

  • One setting out the opportunities for entrepreneurship and SMEs of the transition and explaining how Commission instruments and policies can support it.

  • One setting out the employment opportunities and explaining how we can ensure that our labour markets are ready to exploit them

  • And one proposing ways to make our buildings more resource efficient and improve markets for construction and demolition waste

We will also table a Communication on a Sustainable European Food System in the coming weeks, looking at how to reduce food waste at all points in the system, but already in today's package we propose an indicative objective on reducing food waste.

Buildings and food are two of the three main human activities having an impact on our resources and that is why we pay them special attention.

Let me tell you a little more about what all this means in terms of real impact.

You can see it very easily on the slide I showed earlier.

Today about 42% of our waste is recycled and we have a target to get to 50% by 2020. Today we propose to go for a minimum of 70% recycling by 2030.

We introduce a ban on landfilling of recyclables (such as paper, glass, metal and plastic) and biodegradable waste by 2025, and aim at elimination of all landfilling of recoverable waste by 2030.

And we propose to measure our resource productivity against a target of raw material consumption to GDP. Here we follow the advice of our European Resource Efficiency Platform which stated that an improvement of at least 30% by 2030 would be realistic and bring important improvements in competitiveness.

It is important to realise that there a lot of jobs in that dark green arrow. Our estimates show that successful implementation of the existing waste legislation would lead to 400,000 direct jobs, and the review we have put on the table today would create a further 180,000. But the job potential to the wider economy of improved material flows and improved resilience is far greater. A reduction in the total material requirement of our industry would lead up to 3% boost in GDP and 2 million additional jobs.

We keep the familiar waste hierarchy intact. And here is what it should look like by 2030:

  • 70% Municipal Waste Recycling target (by 2030);

  • 80% Packaging waste recycling target (by 2030) with interim targets for individual recyclables;

  • Ban on landfilling of recyclable waste (paper, glass, metal and plastic) and biodegradable waste (by 2025);

  • Phase out landfilling of all recoverable waste (by 2030) – not legally binding

  • 30% Reduction of food waste objective (by 2025) – not legally binding

  • Also 30% reduction in marine litter objective (by 2020) - not legally binding

This looks ambitious, but we know from the performance of the Member States that have already got to nearly 70% recycling rates that it is feasible even for the Member States that are landfilling more than 80% of their waste today to get to these targets if they use the right instruments. Particularly separate collection, landfill charges and extended producer responsibility.

And this is what people want.

Our latest survey, published on Monday, showed that a large majority (96%) of Europeans believe more initiatives are needed to limit plastic waste and increase recycling, according to a new survey.

Most citizens in the EU “think their own country is generating too much waste”, with 96% of people saying it is important that Europe uses its resources “more efficiently”.

A majority of them favour more and better waste recycling and composting facilities in their area (59%), financial incentives (59%) and more convenient separate waste collection (51%).

Although the main waste targets are legally binding, we don't want to simply go away until 2030 and then come back to find that some Member States did not get to the targets. We have included in our proposals an monitoring and early warning mechanism which builds on the help and advice we have already been giving the Member States who most need it over the last two years.

And we have taken advantage of this review of the legislation to introduce further simplification with electronic reporting on hazardous waste, basic minimum standards for extended producer responsibility schemes, simplification and reduced reporting requirements.

The business case is clear – there's gold in waste… literally.

It takes a tonne of ore to get one gram of gold. But you can get the same amount from recycling the materials in 41 mobile phone.

But I should perhaps remind you – in case you have forgotten – that I am the Environment Commissioner. Repairing, re-using, re-manufacturing and recycling will also bring huge benefits for the environment. If successfully implemented our waste proposals alone will lead to 443 million tons of avoided greenhouse gas emissions, the reductions in marine litter will reduce damage to fragile habitats and biodiversity, reductions in food waste of 30% will also save all the resources – land, fertiliser, energy, water, nitrates – that went into producing that food.

Getting into that "green box" is about improving our economic wellbeing and our environment – that was once considered "squaring the circle" – now it is called the circular economy.

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