A Circular Economy

The Circular Economy

In 2020, the European Commission adopted a new action plan to help accelerate Europe’s transition towards a circular economy. This action plan aims to reach climate-neutrality by 2050, boost its global competitiveness, promote sustainable economic growth and generate new jobs. In fact, it sets out a number of measures which keep resource consumption within planetary boundaries, strives to reduce its consumption footprint and double its circular material use rate. Therefore, the key product value chains will be given priority to reduce waste in the first place and improve the EU’s capacity of taking responsibility of the waste produced.

The potential of both the single market and digital technologies can strengthen further the EU’s industrial base which help foster several business creations and entrepreneurship among SMEs. The concerted strategy launched by the European Green Deal, is based on an innovative model that helps build a closer relationship with customers, mass customisation and the sharing and collaborative economy, which are all supported by our digital era. This will accelerate circularity through the dematerialisation of our economy and make Europe less dependent on primary materials.

Circular Economy will provide high quality functional products, which are efficient and affordable, last longer and are designed for reuse, repair, and high-quality recycling. Therefore, bringing a better quality of life that increases innovative jobs and upgrade knowledge and skills.

A recent study estimates that applying these circular economy principles across the EU economy is an opportunity to increase the EU GDP by an additional 0.5% by 2030, creating an estimate of 700 000 jobs. Moreover, since manufacturing firms in the EU spend on average 40% on materials, closed loop models can enhance their profitability whilst sheltering them from resource price fluctuations.

The Circular Economy Action Plan along with the contribution of several economic actors, consumers, citizens and other civil society organisations, offers a future-oriented agenda for a much cleaner and competitive Europe. This plan is a result of all the circular economy actions implemented since 2015, which ensure that the regulatory framework is streamlined and made fit for the foreseeable sustainable future and that new opportunities from the transition, are always maximized whilst each burden minimized.

However a recent stakeholder report suggests that full circularity would apply to only 9% of the world economy, leaving vast areas for improvement.

In July 2018, the Circular Economy package published by the European Commission brought into effect four revised Directives, including:

The Revised Landfill Directive 2018/850,
The Revised Waste Framework Directive 2018/851 and
The Revised Packaging and
Packaging Waste Directive 2018/852.

This Package highlights the importance that the European Commission is placing on the circular economy and the need for reduction of waste across the Union. The impetus at a European level is now stronger than ever.

The Concept

The circular economy is based primarily on ensuring the product life cycle decline stage is effectively postponed by reusing, upgrading, remanufacturing and, of utmost importance, recycling. The circular economy aims at re-engineering growth, which translates in positive society-wide benefits and goes beyond the current take-make-dispose extractive industrial model. The transition to the circular economy entails four fundamental building blocks—materials design, product design, new business models and the right enabling business conditions.

The circular economy is based on three principles;

Designing out waste,
Differentiating between consumables and durable parts of a product, and
Using renewable natural systems.

Minimizing material usage compared to the current linear system and minimal times between phases of usage,
Maximize the number of use-circles and time in each circle,
Diversifying reuse across the value chain, and
High quality collection and distribution systems ensuring uncontaminated material streams.

As illustrated in the design below, the circular economy requires a re-think of processes throughout the lifecycle of products; from design to production methods, to repair and maintenance, and ultimately to collection and recycling or re-using. The waste at the end of the lifecycle is no longer considered as useless material which can only be remedied through disposal but will now be considered as a new resource which will once again feed into the production of new products.

In a country such as Malta, that is highly dependent on importation of both raw materials, as well as finished goods, the design and production or manufacturing stages within the cycle are relatively minor. This means that the extent of Malta’s influence throughout these stages of the product cycle will be limited and focus should be directed towards the latter stages of reusability, repairability, collection and recycling.

The successful transition towards a circular economic system will only be possible with collective action will involving stakeholders committed in the development of circular business models. Therefore, these need to be managed through the introduction of Collaborative Life Cycle Activities (Co-LCA).

Co-LCA embeds three levels (Purpose, People and Action) and follows four steps:

Explore the topic,
Engage with appropriate stakeholders,
Expound and address the problems, and finally,
Evaluate the benefits and implement solutions together with the business sector.

The entrenchment of well-structured collaborative lifecycle approach in the transition to a circular economy will lead to the creation of an LCA community with the intent of addressing waste challenges measurable through shared values – societal, environmental, economical.

This transition is supported financially through a number of funding programmes, including: the European Structural and Investment Funds, Horizon 2020, the European Fund for Strategic Investments (EFSI), and the LIFE programme.

Implementing the Circular Economy Action Plan has accelerated the transition towards a circular economy in Europe where a shared vision boosts ongoing efforts to modernise the EU industrial base and ensure its global competitive edge while preserving its natural capital.