Circular Economy Package 2.0: Some ideas to complete the circle

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1 Circular Economy Package 2.0: Some ideas to complete the circle March 2015 Drafted by the European Environmental Bureau (EEB) with contributions from partner organisations and EEB members We want the European Commission to table a Circular Economy Package which strengthens the origi- nal proposal s waste targets and adds measures related to product policy. We refer to this new proposal, which should have both legislative and non- legislative aspects, as the Circular Economy Package 2.0. Page 1 of 8

2 BUILDING A CIRCULAR ECONOMY IN EUROPE The European Commission must keep the waste targets from its original proposal in 2014 on the table and include additional measures on waste prevention, re-use and product policy. 180,000 Extra jobs in the European economy M Tonnes of GHG emissions avoided RETURN EXTRA WASTE POLICY MEASURES 72 bill Savings per year in waste management costs 72 bill 42 bill Savings per year in waste Increase management in annual turnover costs of the EU waste management and recycling sector RESOURCE CONSERVATION THROUGH PRODUCT POLICY MAKE Preparation for re-use of textiles target Preparation for re-use of furniture target Food waste prevention target ADDITIONAL MEASURES Taxes and restrictions for incineration of waste + Design products for easy disassembly and reuse/ upgrade of components Recycled plastic is used in manufactured products Facilitate new business models such as sharing and leasing schemes for products Ensure that products last longer and can be repaired USE LONG TERM BENEFITS** These measures together with a resource efficiency target, fiscal/financial incentives and support to innovative business models, could lead to: CO 2 2-4% Drop in the EU's total annual GHG emissions 600 bill In savings 2M Additional jobs * Figures from the European Commission Impact Assessment ** Figures from The opportunities to business of improving resource efficiency (2013), AMEC et al., Modelling the economic and environmental impacts of change in raw material consumption (2014), Cambridge Econometrics et al. infographics

3 Political background The Commission has put forward different reasons for withdrawing the previous proposal and re- tabling a new one which include: Taking into account other aspects of the value chain to close the loop of the circular economy, for example by addressing recycling in product design and creating a market for secondary raw materials; Promoting a more economically compatible policy approach that actively supports the creation and development of new business opportunities and sustainable growth; Developing a strategy on waste that better takes into account the different situations in EU Member States and focuses on achievable objectives and their effective implementation on the ground. To build on these objectives, the following approaches should be prioritised within a new and improved Circular Economy Package 2.0: 1. Addressing durability and reparability of products; 2. Reinforcing the demand side; 3. Improving product design; 4. Moving up the waste hierarchy. 1. Addressing durability and reparability of products A move towards a truly circular economy requires a horizontal approach across different policy areas on durability and reparability of products. The RREUSE network, consumer and environmental NGOs 1 1 A joint mission statement from an NGO coalition working together to make products last longer and easily repairable will be released soon. More detailed proposals for implementation will follow to feed into the debate on the circular economy. Page 3 of 8

4 have developed the following proposals in close collaboration: Designing products so it is easier to repair them, together with requirements for manufacturers to make relevant information available to re- use operators, can be tackled through the Waste, Ecodesign, WEEE and Batteries Directives. Whilst providing information for consumers on product longevity and warranties could also be cov- ered through the aforementioned Directives, the Consumer Rights and Energy Labelling Directives could have a major role to play. Regulations in the automotive sector such as the Massachusetts Right to Repair Law in the US, together with EU regulations of motor vehicles and engines, should provide further inspiration. Finally, making repair cheaper should be possible by reducing VAT on repair activities through the VAT Directive. In particular the new Circular Economy Package should Develop a system to rate the durability and reparability of products and establish standards to measure these aspects for products placed on the European market; Set design requirements for products to guarantee a minimum life time and ensure non- destructive disassembly of products into individual parts and components for reuse; Provide consumers with more information about product lifetimes through provision of information on the average estimated product lifetime; Extend minimum legal warranties to at least 3 to 10 years depending on the product catego- ry and oblige manufacturers EU- wide to prove the full functioning of their products in case of early failure during the first two years after purchase as a minimum; Make repair information, service parts, and diagnostic tools available to all independent re- use operators; Spare parts must be widely available and affordable for a minimum of 10 years following the last product batch and available at non- discriminatory pricing to third parties. Re- use of used and remanufactured product components must also be allowed; Lower taxes on repair service activities and higher taxes on resource- intensive and single use products; Establish a public communication campaign highlighting the manifold opportunities and ben- efits of reuse and repair of products. 2. Reinforcing the demand side To make the most of the business opportunities that arise in a circular economy, the EU has to create the conditions that stimulate demand for maintenance, reuse, and remanufacturing of products and/or their key components and help increase the use of recycled materials. Setting quality stand- ards and financial incentives to promote the market uptake of secondary raw materials can do this. In addition, the development of a generic standard and/ or quality label for refurbished or remanu- factured components and products should be investigated in order to provide customers and end- users with better and reliable information about their functionality, resource savings & potential lifespan. There is also an important role to play for Green Public Procurement (GPP), in which the criteria for purchasing more resource efficient, less wasteful and more recyclable products, inter alia by making use of bonus- malus- schemes, should be strengthened. Linear consumption patterns can be challenged by moving towards leasing models, products with shared ownership, pay as you use schemes, and personalized maintenance or upgrade services for Page 4 of 8

5 end users. In this context the European Commission and EU Member States should enforce the full implementation of the Green Action Plan for Small and Medium sized Enterprises (SMEs). In particu- lar the European Resource Efficiency Excellence Centre, to be set up in 2015, should build on proven experience in some Member States to support SMEs and provide access to finance, expertise, net- works and infrastructure which are needed to maximise resource savings through dissemination of new business models and innovations. There is an urgent need to establish and enforce standardised information requirements towards service providers, downstream users and end users on the following aspects: Resource efficient use and details on the product s use of consumables Technical life time of the product under normalised conditions Disassembly and repair instructions in a standard format Access to troubleshooting and diagnostic tools (including service software, machine codes and firmware updates, if necessary) Availability of repair/ service tools and spare parts Content of problematic/ hazardous substances or precious/ recyclable materials in certain components Adequate end- of- life treatment and recycling of waste products (including how certain components can be easily separated) Inadequate information passed on from one business to another on what resources a product con- tains and how it can be repaired or recycled is hindering efforts to improve resource efficiency. To tackle this barrier, the use of a product passport should be explored. Standardising the technical and environmental information on relevant product properties would encourage more efficient ma- terial flows and the creation of value in the circular economy. Product tags could help by making this information easily accessible and usable in the supply chain, for example by linking to an EU database containing all product passports. This tool is not to be confused or merged with approaches to pro- vide information on environmental footprints and performance indicators of products. It should be implemented as a strictly practical measure to facilitate repair, reuse or recycling. 3. Improving product design Product design is the crucial life cycle stage that defines the product s durability; its use of hazardous or recyclable materials; the ease of disassemble in order to repair or upgrade it, and finally to recover precious materials. So far neither the EU Ecodesign Directive nor the WEEE Directive address infor- mation or design requirements for energy- related products systematically and effectively. Within an improved policy framework for the circular economy, adequate design requirements should be set both within the scope of the existing Ecodesign Directive and beyond, tackling other resource- intensive product groups like construction products, furniture or textiles. This aspiration was also already reflected in the European Commission s Communication on the Cir- cular Economy, released in July 2014, which emphasised that an important starting- point is the design of production processes, products and services. Products can be redesigned to be used longer, Page 5 of 8

6 repaired, upgraded, remanufactured or eventually recycled, instead of being thrown away. The new Circular Economy Package 2.0 should therefore set up a consistent policy framework addressing product design not just for energy- related products, e.g. by implementing the following measures and requirements: Ensure the possibility of disassembly (non- destructive for maintenance, repair and refur- bishment as well as adequate for specific End- of- Life treatment); Provide information on hazardous contents, their exact location, and safe extraction proce- dures for repair and re- use centres and recycling operators; Ensure that worn- out parts can be easily exchanged or upgraded with more up to date or fashionable features. A modular product design would facilitate reuse, refurbishment and remanufacturing without discarding all materials; Provide reliable means to archive or remove personal data from electronic devices with stor- age capacity. The existence of personal data on storage devices and the difficulties to safely transfer and/or delete such data is considered to be an important obstacle for more wide- spread reuse and refurbishment; Exclude, or ensure easy separation of substances or materials that can have negative effects on a product s recyclability. There are several combinations of substances that cannot be separated by means of available recycling processes, which do, however, significantly affect the quality of the secondary material and its potential to contribute to resource conservation as well as to create non- toxic materials cycles. Examples are the contamination of steel with copper or parts of halogenated additives (such as flame retardants) in plastics; Prioritise certain materials to be made accessible for recycling processes. These materials should be chosen because of their strategic value from a supply/demand perspective or from an environmental perspective that assesses the impact of sourcing and processing these ma- terials when they are extracted from the ground; Provide Information about how much and where those critical materials are located in prod- ucts. Adequate marking and separability of components, which contain a high content of these materials, must complement this: E.g. for rare earths in permanent magnets. In addi- tion, it is recommended to collect more scientific information on potential Ecodesign requirements on plastics, including the use of recycled plastics, marking of plastic parts and the use of polymers and composite materials. Basically there are three different options to implement product design- related requirements as mentioned above through EU legislation: Enforce implementation of the existing Ecodesign Directive, finally extending its scope to non- energy related products; Address product design through the Waste Framework Directive as well as in the Packaging and Packaging Waste Directive; Integrate and streamline circular economy issues throughout existing tools and legislation, e.g. on Ecolabel and Green Public Procurement, Ecodesign and Energy labelling. Page 6 of 8

7 4. Moving up the waste hierarchy The Commission must keep the waste targets in the original proposal and create the conditions that will allow more prevention, reuse and high quality recycling. The EU should ensure that it does not refer only to a zero waste to landfill goal but also addresses the material sent to incineration and other energy recovery facilities, and integrate provisions that help leapfrogging from landfill to waste prevention and recycling, rather than considering energy recovery as the main alternative. Invest- ments in energy recovery capacity, creating lock- in situations for 20 to 30 years, do not offer the necessary adaptability that is required for the transition towards a circular economy. Furthermore they may create barriers for grasping the potential of re- use, remanufacturing and recycling activities that will create new jobs and sustainable business opportunities, while saving even more energy and greenhouse gas emissions than energy recovery operations. Specific policies should be promoted in the revision of the Waste Framework Directive, Packaging and Packaging Waste Directive and Landfill Directive, such as: Encourage waste prevention, e.g. through incentives promoting platforms for reselling or sharing of products as well as for maintenance or repair services; set a binding quantitative marine litter reduction target of 50 %; Set separate preparation for reuse targets, distinct from recycling, notably on electronics, textiles and furniture; develop networks of approved reuse centres and ensure their access to waste streams at collection points; Develop further separate collection schemes, in particular on biodegradable waste; Provide a clear definition of recyclability, which refers to the possibility of recycling different (combinations of) materials contained in the product with existing technologies and without the need for cleaning/decontamination of the material; differentiate criteria and fees within producer responsibility schemes accordingly; Increase recycling targets to at least 70% of municipal solid waste by 2025, using only one harmonised methodology for all Member States to report on, taking into account the output of recycling facilities and processes; Set a staged target on the maximum amount of residual waste per capita per year to be land filled or incinerated and set different timelines for Member States so they can comply with the ban on landfill targets according to how much waste the country generates per capita (this would serve as an indirect incentive for waste prevention and would provide some flex- ibility for those countries lagging behind in setting up adequate collection systems and recycling facilities); Combine ambitious targets to move up the waste hierarchy with a stringent investment package, making the best use possible of financial support through structural funds but avoiding extra funding for additional energy recovery capacity; Consider the systematic introduction of economic instruments in all waste management plans to support a proper implementation of the waste hierarchy. These could include reinforced extended producer responsibility with harmonised requirements at European level, pay- as- you- throw schemes, and a gradual increase in the taxation of land filled or incinerated waste that is untreated, preparing a complete ban of untreated waste being sent to disposal or energy recovery facilities; Page 7 of 8

8 Phase out, or at least set specific taxes on, single- use, superfluous or non- recyclable products and toxic materials, including legacy harmful materials, that endanger human health and the environment and hinder high quality recycling; Establish a clear programme for the creation of non- toxic material cycles as the core of the planned EU non- toxic environment strategy; Update and enforce design requirements for packaging ( essential requirements ) to avoid excess waste of materials, and to facilitate reuse and recyclability. Page 8 of 8

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