How Europe is Accelerating Circular Models in Electronics and Fashion
Joanna Drake is Deputy Director-General for the European Commission’s Directorate-General for the Environment, where she leads the coordination of resource efficiency policies. She previously led the Commission’s Task Force on the Collaborative Economy, New Business Models and SMEs. Here, she explains why the electronics and fashion industries are key priorities for the Commission’s work on the circular economy, and why government, business and consumers must all play a part in Europe’s circular transition.
The Commission launched its first Circular Economy Action Plan in 2015. How would you assess its progress to date?
Around the time that we launched the first Action Plan, McKinsey forecast that transitioning to a circular economy could deliver a total annual benefit of €1.8 trillion for Europe by 2030. We’re already beginning to see some of this value being realized. Repair, reuse and recycling initiatives have accounted for €17.5 billion of investments since then and we’ve seen something like €147 billion in value added from this. New jobs have been created too. Since 2016, more than four million people have been employed in jobs connected to the circular economy.
Further, the Commission’s work has helped open up new opportunities, giving rise to new business models, and new markets being created both domestically and outside the EU which hadn’t been conceived before.
It’s also been encouraging to see the private sector is very motivated and willing to embrace the circular transition. Companies recognize their growth and their attractiveness to customers – who are increasingly conscious of the need to manage resources – is dependent on their ability to move towards this model.
The Consumer Insight Action Panel (CIAP) was launched by a group of stakeholders this year as a spin off activity of the EU Circular Economy Stakeholder Platform, to support consumer-relevant circular economy strategies. The CIAP chose to focus on fashion, plastics and electronics. What makes these sectors a key priority?
An important reason is that they involve huge volumes of capital and material, meaning the economic opportunities and environmental impact are both huge.
Waste is a key issue for both sectors. Though the EU has had rules in place on electronic waste (e-waste) for several years, this is still the fastest growing waste stream globally. At a global level, we are only dealing with 20% of e-waste appropriately. For the rest, we don't even have reliable data, so the likelihood is it’s going to landfill. We have an interest to act both from an environmental point of view but also because e-waste is a valuable resource for the economy.
Meanwhile in the fashion industry, it's estimated that a whole truck load of textiles is landfilled or incinerated every second, worldwide, while the industry’s production generates more CO2 emissions than international flights and maritime shipping combined each year.
What responsibility do European consumers need to take for the circular transition in these industries? And how can we ensure they’re not over-burdened by the changes taking place?
When an economy is in transition or undergoing change, it is always complicated. You can never put responsibility on any single stakeholder group, as it would be grossly unfair. Everybody has to pitch in, and consumers must be engaged too.
That said, we can't just throw the problem at consumers and ask them to overhaul their behaviors overnight — changing how they shop, what they eat and how they commute, and so on.
Consumers need the infrastructure and solutions in place to support new behaviors, and this will vary across sectors. In the electronics industry, for instance, companies are looking at lifelong warranties or product support to support the shift towards repairing and the purchase of more durable products by consumers. And in textiles they’re exploring more durable, higher quality clothing that could help to reduce consumers’ reliance on fast fashion.
In terms of our role, we are encouraging stakeholders to take ownership of the policies, sharing their insights and reflections, and acting upon the changes which accompany them. The recently set up Consumer Insights Action Plan is a good example of this. It is an initiative by a group of stakeholders intended to generate a precise view of the challenges and the needs in relation to how consumers interact with specific sectors. We’re also trying to set incentives in our policies that will help to support more sustainable, circular options.
What are the next steps for supporting both the electronics and the fashion sectors in their circular transition?
Increasingly, where we set targets and incentives, we need to ensure they are addressing the entire value chain. For instance, in electronics we set design requirements on some products, we look at the use phase by helping consumers make good choices through eco-labelling, and we have economic incentives such as the Extended Producer Responsibility scheme which target the waste and recycling phase. We need to ensure that all actors in the value chain are involved and incentivized to implement circular practices, so I think we need to direct more investment towards that.
Another of the big challenges for both industries is that as we promote reuse and recycling of materials, we need to ensure people aren’t exposed to hazardous substances that may be difficult to recycle.
While a circular economy can help Europe to reduce its dependence on importing raw materials from abroad, there's a question of trust surrounding secondary raw materials today. Manufacturers and consumers must be able to trust in their quality. In future, chemicals and materials will need to be designed for a circular model, we’ll need better access to information for chemicals of concern, and we’ll need solutions to predict the risks of chemicals and to decontaminate the materials when they are recycled.
The EU is seen as a global leader in driving environmental and sustainable change. Given the successes the Commission’s Action Plan has had since 2015, what factors would you highlight that have contributed to your success, and which others might be able to learn from?
First, the circular economy is complex. Therefore, establishing a comprehensive strategy to close the loop and targeting strategic sectors is a must. This is the way we designed our Circular Economy Action Plan that introduces measures covering the whole lifecycle of products — from design and production through to consumption and waste management, and then back into the economy as secondary raw materials.
Second, there are short- and long-term benefits in making the circular economy a priority across departments inside a public institution. Services dealing with environmental protection, industry, research, international cooperation, and potentially many others, can contribute to ‘mainstream’ the concept within and outside the institution.
Third, circular change is faster when economic actors and civil society are directly involved. When we create the conditions for the best ideas to thrive, we advance our common understanding. Without constant support at all levels of government, as well as from business and civil society, the Circular Economy Action Plan would not have been as successful as it is today. Let’s take the example of the Plastics Strategy: we have seen unprecedented interest and support from citizens, we have established a successful cooperation with the private sector through voluntary commitments and other instruments, and we keep close relations with sectoral NGOs dealing with circular economy.