26 January 2021

Circular Economy – six policy trends to watch in 2021

Sustainable batteries for electric cars, strategies to reduce our energy consumption, a renovation wave for buildings… Keeping up with what’s happening in environmental action can be overwhelming. And 2021 has all the makings to be a year filled with important new EU initiatives. No need to stress though - we help you cut through the noise with this mini-guide for the year 2021 in EU environmental policy.

Eager to find out the policies that could take us an inch closer to a truly circular economy?  No need to wait, this is our watchlist (click on the item of your interest and jump to your favourite section!):

  1. Make sustainable products the norm (again)
  2. Textiles: The green transition starts in our closets
  3. Construction: sustainable bricks for the climate transition
  4. Batteries: Clean power storage for our new electric cars
  5. Sustainable finance: a green list of investments to make our economy work for the planet
  6. Circular electronics: a make-or-break moment for the twin green and digital transitions

 

1. Make sustainable products the norm (again)

 

What is planned?

Missing those good old days when washing machines lasted forever? Remember this title: Sustainable Products Initiative. It is a new initiative by the European Commission that will extend the principle of ecodesign to products such as construction materials, furniture and textiles. Ecodesign is in fact an environmental policy of the European Union with a proven track of success. First introduced 20+ years ago, the policies exclude electricals that are too polluting from the market. Now, the Commission intends to apply ecodesign to a wider range of products.

When? A proposal is expected for the end of 2021.

What to look out for?

To be effective, the Commission’s proposal should mirror a ‘real circular economy hierarchy’. What does it mean? Actions with higher value retention should be favoured. The proposal should prioritise prevention strategies encouraging people to consume less in the first place.

How to do that in practice? This is how the ‘real circular economy hierarchy’ works: above all, policies must favour strategies to consume less, such as sharing, and better durability and quality in products. On the next level, devices should be easier to repair, maintain and refurbish. Only when not possible, policies should enable products to be easy to upgrade or repurpose. If not, easy to disassemble and dismantle. And only as last resort, components need to be recyclable, separable or suitable for reuse as a secondary raw material.

2. Textiles: The green transition starts in our closets

 

What is planned?

The fashion industry alone produces over 92 million tonnes of waste and consumes 79 trillion litres of water per year – and developing countries bear most of this burden.

To curb all this, an EU strategy for sustainable textiles is expected this year. The principle behind this will be to turn the buy-wear-dispose model into a circular one. Regulations will try to make clothes more durable, reusable, easier to mend and to recycle, and less energy-intensive.

When? Autumn of 2021

What to look out for?

First of all, the strategy should set minimum requirements for all textiles sold in the EU. Then, it should include provisions against the use of hazardous chemicals across the value chain, and ban the destruction of textile products, including excess inventory, deadstock and return items.

The rules should also make sure producers are made responsible for the environmental performance of their products, covering the whole value chain: from production to recycling.  To do that, the EU should apply due diligence law so that companies are forced to check whether their suppliers protect human rights of workers and comply with EU environmental rules.

Textiles must also jump on the wagon of circular economy. The EU initiative should include serious attempts at reducing the environmental impacts of textile products and services – following a hierarchy of value retention.

The EU is one of the biggest world markets for new clothes. Strong rules in Europe can lead to more sustainable clothes production methods everywhere.

3. Construction: sustainable bricks for circular buildings

 

 What is planned?

Cement, concrete, steel beams, windows, bricks, doors, roof tiles… Life would be quite different without construction products – they are essential components of buildings, tunnels and bridges. However, they also have a major environmental impact. Construction product life cycles are largely linear, starting when raw materials are sourced, followed by their manufacturing, distribution and assembly or installation; finally, their life often ends in a landfill. 

The European Commission is drawing up a Strategy for a Sustainable Built Environment (SSBE) – including a legislative proposal to review the Construction Products Regulation and more details on the Renovation Wave. This strategy is expected to promote circularity principles more broadly, and address digital logbooks for buildings, public procurement, construction & demolition waste, as well as soil related issues.

When? Autumn of 2021

What to look out for?

The content of the strategy is still up in the air. A built-environment strategy working for the planet would include: specific targets and mandatory measures to dramatically cut the number of resources used in construction, and improvements in the environmental performance of materials, products and buildings.

4. Batteries: Clean power storage for our new electric cars

 

What is planned?

As electric car sales surge, ensuring batteries fit our circular economy will be of the essence.  Back in December 2020, the European Commission launched a proposal for a regulation on new and waste batteries.

Among the most forward-looking points in that proposal are higher targets for the collection and recycling of batteries, requirements for electric-vehicle battery performance and durability, as well as provisions facilitating repair, repurposing for second-life applications and recycling. Another highlight is the new battery passport. It would apply both to electric vehicles and industrial energy storage. Finally, the Commission wants this new law to clarify the responsibilities of producers across the value chain, and set information requirements on the carbon footprint of batteries.

The proposal will now go to the hands of lawmakers in the European Parliament and the EU Council.

However, the process will not end with the adoption of the Battery Regulation, as even then many of the technical aspects will be subject to discussions at the European level for secondary legislation.

In parallel, the development of standards underpinning many of these rules will kick off with technical discussions among experts in industry-led standardisation organisations CEN and CENELEC, and the European Commission Joint Research Centre (JRC).

When?

Co-decision legislative process at the European Parliament and the EU Council will continue throughout 2021 and the first quarter of 2022.
Discussions in standard-setting organisations are expected to last until 2024 at least.

What to look out for?

While the Commission’s proposal sets a good ground to improve the current situation, it will be important for the Parliament and the Council to include material recovery targets for lithium and recycled content in new batteries.

As for standards, they should include thorough performance and durability aspects as well as reuse and repurposing of rechargeable batteries.

5. Sustainable finance: a green list of investments for an economy that works for the planet

 

What is planned?

The European Commission seeks to provide a common definition of means in the finance world. To do so, experts are tasked to develop a list (‘taxonomy’) of economic activities and investment categories contributing to a protected environment and a sustainable society.

The list was scheduled for publication last year, but has been delayed. The ‘taxonomy’ is at risk as the private sector has made a u-turn. Many companies are now pushing to get this project scrapped as they want to avoid being transparent about the nature and climate impact of their activities.

Hopefully, the Commission will not buckle under this pressure – and move on without further delays. The list would be a cornerstone for establishing a sustainable finance system in Europe. 

Later in 2021, the European Commission is expected to flesh out the list with new definitions – including economic activities that contribute to our transition to a circular economy, pollution prevention, biodiversity conservation and water preservation. This way, companies will have a common set of definitions so they can rightfully report to investors on their green activities.

When?

First section of the taxonomy list expected in early 2021.
Second section of the taxonomy list expected at the end of 2021.

What to look out for?

First of all, the date of publication. The Commission has not yet adopted its delegated act although the deadline had been set for 31st of December 2020. Publishing it as soon as possible will show the Commission does not bend to attempts to kill the proposal.

The second part of the taxonomy should exclude all extractive industries, which rely on a linear economic model. Waste incineration and other false solutions creating lock-in investments should also be excluded.

6. Circular electronics: a make-or-break moment for the twin green and digital transitions

 

What is planned?

Electrical and electronic devices are one of the fastest growing waste streams in Europe – but 2021 may be the year when our laptops, phones or e-books actually become more circular.

There is a handful of EU policies under development which seek to improve the sustainability of electronic devices. Here, the main ones:

First, the European Commission is preparing a legislative proposal to empower consumers for the green transition. It is expected to improve the information consumers receive on the sustainability of their devices upon purchase. The proposal is expected not only to establish information requirements on the key environmental characteristics of products, but also to tackle greenwashing as well as practices that lead to planned obsolescence of our devices.

Building on this, the European Commission plans to put forward the Circular Electronics Initiative, which, together with the Sustainable Products Initiative and the new proposal on batteries, is expected to ensure that sustainable, repairable and long-lived products can increasingly become the new normal in the EU. In the immediate future, this initiative is expected to enable the introduction of new ecodesign and energy labelling requirements for smartphones, computers, tablets and – potentially – printers.

In 2021, the political agenda for circular electronics will certainly be one to influence.

When?

The European Commission plans to present its initiative for ‘Empowering consumers for the green transition’ in spring.  
The ‘circular electronics’ initiative is planned to be launched before the year’s end.

What to look out for?

The initiative for ‘empowering consumers for the green transition’ should introduce a new regulatory instrument that effectively establishes mandatory horizontal information requirements on key environmental characteristics of products. New rules should make sure information is relevant, accurate, easily understandable and comparable. The initiative should, moreover, be a powerful tool to end greenwashing and premature obsolescence.

The Circular Electronics Initiative, on the other hand, should introduce ambitious ecodesign requirements for all key categories of short-lived electronic products – smartphones, tablets, computers and printers. Moreover, this initiative should also include an ambitious proposal for a common charger not only for smartphones but for all smaller devices, which would put an end to bundled device and charger sales and address wireless charger efficiency and interoperability.

ECOS is co-funded by the European Commission and EFTA

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