Brussels, 16 December 2024
“Check against delivery”
Ladies and Gentlemen,
Thank you for inviting me to Bruegel.
When I was Minister for European Affairs in Sweden, I always enjoyed reading your insightful papers.
And as a newly nominated Commissioner way back in September, I found your colleague Heather Grabbe’s policy briefs also very insightful. I agree with a lot of Heather’s findings.
So it is a pleasure to be here with you to share my vision and views on the future of the Circular Economy in Europe.
Let me start by saying that I am honoured to be the first European Commissioner with the explicit mention of “competitive circular economy” in the name of the portfolio.
And these discussions are not new. The first EU waste legislation dates back to the 1970es. The waste hierarchy was already a concept back then. And in more recent years, in 2015, the Commission presented its first Circular Economy Action Plan.
As citizens we can all relate to circularity. Recycling paper, glass and plastic has become a daily habit for many of us. More and more people use shared mobility solutions for their daily commute. Second hand fashion is increasingly popular, as are second hand furnishings.
But the Circular Economy is much more than that! We need to do a great deal more. I read recently that only about 3% of the Swedish economy is circular. So the potential to do better is enormous.
One reason for the urgency is of course that we need to reduce our environmental footprint. By reducing, reusing and recycling we do exactly that.
But our geo political and geo economic realities are changing as well. War is raging at our borders.
This demands a rethink of how we want to position Europe in the world.
How we want to shape Europe as an economic powerhouse. And for me the circular imperative is a vital part of the answer.
Europe can only claim strategic autonomy if we manage to reduce our dependence on external resources.
We can only become more resilient if we focus on sustainability and resource efficiency.
President von der Leyen has announced that we will adopt in January a “Competitiveness Compass” to set our direction in the coming mandate.
There will be three pillars:
- boosting innovation,
- decarbonisation and competitiveness,
- and reinforcing our economic security.
I believe that circularity will be fundamental to all those objectives. Let me explain what I have in mind.
First, innovation
Circularity is by its very nature innovative and entrepreneurial. It challenges the traditional linear thinking, linear systems and linear markets.
It is not easy to be a circular business in a world dominated by linear thinking. But there are already companies which are early adopters and front-runners who have demonstrated the advantages of circular approaches.
Circular innovation takes many forms, in product design, in business models, in production, in systems, and in technology.
Take for example Circular systems such as industrial symbiosis, where companies trade or share by-products, energy, machinery or space, as we see in Kalundborg – Denmark
Or Circular production, such as the remanufactured and fully tested gearboxes with recycled content being put into new lorries by Scania.
I can give many examples of successful European companies in each of those areas, and I’m sure you have some in mind as well. They demonstrate that circular innovation really works.
But they also show something else.
Firstly, that we cannot just tell businesses to “go circular”. We can give a policy steer but we need to let businesses develop their own solutions, based on their insights and expertise.
Secondly, we struggle to bring the individual successes, often small-scale, to the mainstream.
And that’s where policy makers come in.
We need to develop:
the right framework conditions,
the right industrial ecosystems,
and the right lead markets, for example by using public procurement and targeted financing.
We also need to use the full potential of our Single Market.
The second pillar of our competitiveness compass will be decarbonisation and competitiveness
The Clean Industrial Deal that we have announced for our first 100 days will set a roadmap for competitiveness, growth and decarbonisation. Achieving these goals will require circular practices. And we have a long way to go.
The EU economy relies on 8 billion tons of raw materials each year. Less than 12% of this demand is fulfilled by recycled materials, despite decades of EU policies on recovery and recycling.
An average factory in the EU spends twice as much on raw materials as it does on labour.
But it’s not just about cutting costs. It’s also about the environmental impact of the product throughout its life cycle.
We estimate that in Europe, circular approaches could deliver up to 25% of our climate targets. Obviously, this goes beyond recycling. We need to introduce measures to “close the loop”. We need to keep materials in their highest value for as long as possible, in products, in buildings, and in assets.
These circular approaches should be targeted at sectors where waste management is particularly difficult. For example, by better management of construction and demolition waste, by better materials management in heavy industry, by clustering of complementary industrial activities and by shared mobility.
The third and last pillar of the Competitiveness Compass will be about reinforcing our economic security.
By building circular opportunities, we reduce linear risks. Global material use is growing at 2.3% every year, and competition for resources is increasingly intense. Derisking ourselves from such dependency is central to our economic security as a Union.
A significant proportion of those 8 billion tonnes of materials we use each year comes from outside the EU.
Sometimes because they are cheaper. But a high proportion of our imported raw materials are valuable metals and other strategic raw materials. These are materials that we simply do not have in Europe. At least not in virgin form.
Critical raw materials are the most obvious example. The demand for critical minerals for the clean transition has already doubled during the last mandate. And it could triple by the end of the next one.
We have to respond to that challenge.
- We need to diversify our suppliers and
- we need to substitute materials with alternatives.
Let me make a small parenthesis here on EU-Mercosur agreement. I believe that the agreement will be instrumental in securing critical raw material supplies since Mercosur countries are major producers of many of these materials.
- And we need to use secondary materials. That means recovering products that contain those critical raw materials, extracting them and recycling them.
We start from a low base – very low in fact.
Less than 1% of the critical raw materials we use come from recycling.
So there is a big margin for improvement, and the Critical Raw Materials Act already sets us an ambitious 2030 benchmark of 15%.
As I said earlier, we shouldn’t only look at recycling. What’s even more effective is to make sure that products containing valuable and scarce materials are used and re-used. And they have to be used optimally, for as long as possible, before they become waste.
This is the case for the “critical” and “strategic” materials needed for renewable, digital and defence technologies. But it also matters for basic materials like steel, biomaterials, plastic and cement. They are no less essential for our companies, and they generate massive energy demand.
Ladies and Gentlemen,
I have given you an overview of the current situation. So what do I intend to do very concretely, as a Commissioner? We still generate more than 2 gigatonnes of waste every year.
And although the recycling rates are steadily improving, we still landfill 23% of that waste, and 18 Member States are set to miss their 2025 recycling targets, some of them by a large margin.
Against that background, my overriding objective in the next 5 years will be to translate our policies into a tangible reality.
The Circular Economy Act, which I intend to present in 2026, will tackle the bottlenecks I have mentioned. We are at an early stage in developing our ideas. And as you know we have a thorough impact assessment process, where you will surely be able to contribute.
But today I can give you a flavour of some of our ideas.
First, I intend to address e-waste, which is our fastest growing waste stream. It contains a lot of critical raw materials for which we have low recycling rates. Less than 40%. So we want to increase the recovery and recycling, and we want to generate market demand for those secondary critical raw materials.
Second, we will tackle the regulatory barriers to an effective single market for secondary raw materials and waste. For example, we will revise the End of Waste criteria. The price for secondary raw materials will not drop over night. But I believe that we can help these markets develop by ensuring more harmonised standards.
Third, I want to make Extended Producer Responsibility schemes more effective – including through a digital one-stop-shop for companies.
The common denominator will be simplification. I’ve said it many times already: simplification does not mean deregulation. It means achieving our objectives in the most effective way. In this case, it means ensuring that our materials can flow freely and are allocated efficiently.
Finally, we need to implement existing legislation in an effective and streamlined way.
The Ecodesign for Sustainable Products Regulation, and our other legislation, such as for batteries, packaging and cars, will be powerful tools. They will help us boost demand for secondary materials through minimum recycled content requirements. They will make repair, refurbishment and recycling easier, more viable and more rewarding.
Last but not least, I should mention investments and financing. Investments in innovation, new technologies and infrastructure will be key to make the transition to circularity.
Ladies and gentlemen,
We have in front of us one of the biggest opportunities ever.
An opportunity Europe cannot afford to miss. An opportunity to continue advancing the European project in the interest of our citizens and our businesses.
I am committed in my mandate to demonstrating that we can unleash the innovative capacity of Europe, increase our competitiveness and decarbonise at the same time, as well as strengthening our economic security.
We have the opportunity – let’s make it a reality.
Source – EU Commission