Opinion of the European Economic and Social Committee on the

‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a monitoring framework for the circular economy’

(COM(2018) 29 final)

(2018/C 367/19)

Rapporteur:	Cillian LOHAN
Co-rapporteur:	Tellervo KYLÄ-HARAKKA-RUONALA

Consultation	European Commission, 12.2.2018
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Plenary Assembly decision	19.9.2017
Section responsible	Agriculture, Rural Development and the Environment
Adopted in section	26.6.2018
Adopted at plenary	11.7.2018
Plenary session No	536
Outcome of vote (for/against/abstentions)	172/0/1

1.   Conclusions and recommendations

1.1.

The EESC welcomes the Communication on Monitoring the Implementation of the Circular Economy as an important follow up to the Circular Economy Action Plan and as recommended in NAT/676.

1.2.

This Communication is a good starting point, but it is missing a number of relevant and essential indicators: — Eco-design — Development of (new) business models — Collaborative economy — Social indicators — Emissions data

1.3.

The EESC notes that, although it is a consultative body to the EU institutions, it was not consulted during the consultation process for the development of these indicators.

1.4.

The circular economy is linked to the low-carbon economy and the Sustainable Development Goals, and as a result, the monitoring indicators should reflect this.

1.5.

Monitoring needs to move away from being overly focused on waste.

1.6.

The definition of ‘circular economy sectors’ is narrow and should be elaborated further, as it has implications for several indicators.

1.7.

Lack of data in a specific area should not be a reason for exclusion. The data gaps should be made explicit, and strategies identified to ensure those gaps are filled. If we continue to limit ourselves to traditional old data then we will not be accurately measuring the transition to a new economic model.

1.8.

There are inconsistencies in policies and regulations that amount to barriers to the transition towards a circular-economy model for the business sector. These inconsistencies should be mapped as part of the monitoring framework.

1.9.

The use of public money should be monitored with its own indicator. Investments that were made specifically for circular-economy initiatives should have built-in data that could be used to develop this indicator. It is also important to monitor ‘money spent’ as well as ‘money invested’.

1.10.

The European Circular Economy Stakeholder Platform should be used as a vehicle for ensuring engagement with active stakeholders in the field, and a communication strategy with concrete goals to achieve this should be drawn up and implemented.

1.11.

Awareness raising and education at the consumer and user levels should be measured to ensure an increased understanding of the role of the consumer in the circular economy and in the flow of materials. Infrastructural supports that enable consumers to improve their behaviour with regard to resource efficiency, and activities that support the transformation from ‘consumer’ to ‘user’ should be encouraged and measured.

2.   General comments

2.1.

The EESC welcomes the Communication from the Commission. Monitoring the progress being made towards achieving the aims and goals of the Circular Economy Action Plan is an essential part of the process.

2.2.

The consultation for the development of the monitoring framework focused on stakeholders. This should have included the EESC, given that its role as a consultative body is enshrined in the Treaties, and its membership includes many of the relevant stakeholder groups.

2.3.

It is essential that metrics in any effective monitoring system are based on solid data that is comparable across different Member States.

2.4.

Monitoring progress towards a circular economy is clearly a challenging task. It will be of critical importance to measure all elements of the circular transition, and to ensure that data gaps are clearly identified.

2.5.

Resources should be allocated to ensure data gaps are filled with the urgent establishment of criteria and collection of data to establish baseline figures. Continuous research and monitoring of criteria, measurements and indicators is recommended.

2.6.

The definition of ‘circular economy sectors’ is quite narrow and would benefit from further elaboration. This definition has a consequential limiting effect on the metrics used to assess economic activity, job creation, innovation and other indicators. Figure 1 — material flows in the economy (EU-28, 2014) Figure 1: Available from http://ec.europa.eu/eurostat/web/circular-economy/material-flow-diagram

2.7.

The general figure for material flows shows 8 billion tonnes of materials are processed into energy and products annually in the EU. While 0,6 billion tonnes of these are subsequently exported, the vast majority remains under the control of actors within the EU. However, this analysis is selective in terms of the materials that are included, excluding important streams such a food and textiles, for example. The impact of production versus the impact of consumption should be taken in to account, looking at how and what we produce, export and import.

2.8.

The Communication should take account of the fact that the authors of the research suggest that the figures for recycling are optimistic and are likely to be an over representation of what is actually occurring on the ground.

2.9.

It is essential to link the circular economy to the low-carbon economy. A monitoring framework should include this link in order to strengthen action and prevent duplication of effort, improving the efficiency of the transition.

2.10.

The communication is very waste-focused. This is partially explained by the fact that the data on waste is strong, consistent and comparable. However, any future monitoring needs to move beyond waste and recycling, and focus on design, production and consumption.

2.11.

Awareness raising and education at the consumer and user levels should be measured to ensure that there is increased understanding of the role of the consumer in the circular economy and in the flow of materials. Fact-based and practical solutions should be introduced — the engagement of civil society plays a significant role and circular culture, based on the rethinking of values and change of existing patterns of consumption, is of great importance.

2.12.

There is a need to create an EU-approved dictionary of definitions relating to the circular economy. The current monitoring of circular economy sectors is too narrow by definition to effectively capture the type of systemic change envisioned in the Circular Economy Action Plan and desired by society. There is also a need to redefine what we mean by waste.

3.   The ten indicators

3.1.

The ten indicators are listed under the headings of production and consumption, waste management, secondary raw materials, competitiveness and innovation.

3.2.

There are no indicators to examine the emissions to air, including GHGs, associated with the existing linear model. This is critical to linking the circular economy with the low-carbon economy, the EU Climate and Energy Objectives, and the Paris Agreement.

3.3.

The ten indicators are heavily focused on waste. There should be a broader analysis to incorporate the whole value chain of products and materials, including eco-design, new business models, changes to business systems and industrial symbiosis, as well as new kinds of consumption models.

3.4.

By and large, the indicators should, on the one hand, measure the output and benefits of the circular economy and, on the other hand, examine the circularity of resources.

3.5.

While shorter, smaller loops are preferable in a circular economy, a focus on self-sufficiency, in isolation from other indicators, is not an indicator of circularity. The rate of recovery of raw materials and use of secondary raw materials can increase self-sufficiency. The focus on self-sufficiency as an indicator creates a risk of it becoming a target, which is not the intention. It may inadvertently lead to a shift of focus away from the most efficient use of raw materials and products. Systemic thinking is needed.

3.6.

It is understandable that data availability was taken into account when choosing the ten indicators. However, gaps in data should be clearly and explicitly identified. A plan for addressing these gaps should be urgently developed as part of the monitoring framework.

3.7.

The current plan for improving the knowledge base is still very much focused on waste, and should be broadened to include the other aspects of the circular economy.

3.8.

The European Circular Economy Stakeholder Platform, a joint initiative of the European Commission and the EESC, should be utilised as a resource to identify data gaps, understand trends amongst stakeholders, and help identify barriers to transition.

4.   Initial findings

4.1.   Production and Consumption

4.1.1.

The indicators on production and consumption are too waste-focused.

4.1.2.

In the absence of relevant data, self-sufficiency in the supply of raw materials is measured. Self-sufficiency in itself is not an indicator of a circular economy (see 3.4). The split between virgin raw materials and secondary or tertiary raw materials should be clarified. It would also be useful to monitor the developments in a more disaggregated way, for example by measuring the use of renewable vs. non-renewable resources, the recovery of critical resources, such as rare metals as well as the impacts of production, imports and exports (see 2.8).

4.1.3.

Green Public Procurement is a good indicator of use of public money and can be a driver for circularity. Implementation of GPP plans in Member States could be facilitated by clear communications and resource allocation for training on the links between GPP and circularity, the SDGs, and the Paris Agreement goals for a low-carbon economy.

4.1.4.

As regional and national GPP plans are assessed, education programmes for procurers should be monitored and information shared. A lack of understanding of the apparent contradictions between circular or green procurement and the rules of the single market needs to be addressed.

4.1.5.

Food waste tools used to measure the complex matter of where along the supply chain food is being wasted are essential. It is not sufficient to only capture food waste at a consumer level when systemic change is needed to address this enormous problem.

4.1.6.

However, food waste is only one aspect of introducing circularity to the agri-food sector. Clear definitions are required to identify agricultural practices that are circular. These need to be urgently developed in consultation with stakeholders (see 2.13). Food waste should be monitored as part of one system, to take in to account the interdependencies that exist between food production, food waste, and other sectors such as energy, mobility and water management.

4.1.7.

There are key aspects of the transition to a circular economy that are not captured here, which should be part of production and consumption in the monitoring framework. These include eco-design, new ownership models, voluntary agreements, information for consumers, consumer behaviour, supporting infrastructure, mapping subsidies which may be supporting anti-circular activities, and links to low carbon economy and to the SDGs.

4.2.   Waste management

4.2.1.

Redefining waste management, redefining waste, promoting research and innovation in the area of recycling, new business models, new value chains and moving beyond recycling are fundamental to the circular economy. This should incorporate a move from waste management to resource management.

4.2.2.

The most important question to ask when it comes to monitoring municipal waste, and its recycling percentages, is where along the chain the measurement is occurring — pre-sorting or post-sorting. This is referred to in the SWD but not explicitly in the Communication. The EESC has consistently taken the position that post-sorting is the most accurate measurement point.

4.2.3.

Monitoring of municipal waste should also include sewage. Human waste is a viable source of energy when treated in anaerobic digesters. This can also contribute to a reduction in emissions from other energy sources.

4.3.   Secondary raw materials

4.3.1.

The role of a vibrant, functional secondary raw materials market as part of the circular economy is vital.

4.3.2.

In a circular economy, material-flow concepts need to go beyond recycling, and include monitoring of material flows in the areas of repair and reuse, including remanufacturing activities. Definitions are again essential, as one sector’s waste should be a potential resource for another sector.

4.3.3.

The distinction between the end of life of a product (by which we mean the end of the functioning of the product) and the end of life of the component parts and materials used in its construction should be recognised.

4.3.4.

The flow of materials within a circular economy should also track change of ownership in a service-based business model.

4.3.5.

This section focuses on the management of the waste currently being produced, and highlights the opportunity to create secondary raw materials from this. This initiative is welcome; however, it is limited by the exclusion of large types of material flows, including food and textiles, from those assessed.

4.3.6.

It is essential to monitor the design of societal stock, so as to ensure that raw materials used in this space are recoverable at the end of the functionality or desirability of that particular stock. This would more than double the potential for managing material flows. Digitalisation may be a useful enabler for this monitoring.

4.3.7.

The Communication could improve the transparency and clarity around what materials are included in societal stock, and how this is measured and monitored.

4.4.   Competitiveness and Innovation

4.4.1.

Innovation, investment and trade are the main operations through which businesses contribute to progress towards the circular economy. As the circular economy is relevant to all business sectors and, crucially, requires cooperation across sectors, a broader approach towards circular economy sectors is needed.

4.4.2.

Specific developments in eco-design should be monitored, as should the development of new service-based business models and flexible ownership options. For example, the development and adoption of eco-design related standards relevant to the circular economy should be monitored.

4.4.3.

There are companies that are moving into the remanufacturing space and cornering significant parts of markets. These need to be part of a monitoring framework.

4.4.4.

The use of public money should be monitored with its own indicators as well. Investments that were made specifically for circular-economy initiatives should have built-in data that could be used for the development of this indicator, so that not only money spent but also impact achieved is measured.

4.4.5.

Private investment also plays a crucial role in the transition towards a low-carbon circular economy. The investment, insurance and banking sectors have already developed tools and evaluation models. As such, private investments as well as public finances should be quantified in the monitoring system.