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The impact of the Circular Economy Action Plan for Europe and future challenges
Circular Economy in Europe and future challenges

Nearly four years have passed since December 2015 when the Commission adopted its Circular Economy Action Plan to give a new boost to jobs, growth and investment and develop a low-carbon, low-waste, resource-efficient and more competitive economy.

This Plan proposes a systemic approach in all value chains and the integration of circular principles in the production and consumption of plastics, water management, food systems and the management of specific waste streams.

In order to achieve these ambitious objectives, 54 actions were defined which, to date, have already been completed or are being implemented, although work is expected to continue on some of them beyond 2019. In this regard, at the beginning of March, the European Commission published a progress report on the implementation of the Circular Economy Action Plan, detailing the main advances.

To highlight the EU Strategy for Plastics in a Circular Economy (the first global plastics strategy), which proposes that by 2030 all plastic packaging placed on the EU market should be reusable or recyclable. In order to boost the market for recycled plastics, the Commission has launched a voluntary commitment campaign , which has been taken up by 70 companies and has launched the Circular Alliance on Plastics.

Moreover, there is already some impact data showing that the transition to a circular economy model is profitable for the economy, for the planet and for people.

These data show that in 2016, the sectors most involved with the circular economy employed more than four million workers in the Europe of 28[1], an increase of more than 6% compared to 2012 (a trend that is true in Spain). The emergence of new business models and new markets linked to circular activities such as repair, reuse or recycling have generated an added value of almost 147 billion euros[2], leading to an investment of approximately 17.5 billion euros[3].

In addition, an increase in the recycling rate of municipal waste has been identified during the period 2008-2016, as well as an increase in the demand for recycled materials, although they still account for less than 12% of the European Union's demand for materials[4]. This figure is even lower at the global level, which is estimated at 9%[5].

One of the great challenges in achieving the transition to a circular economy model is the difficulty of measuring circularity and tracking progress through a global framework that allows comparability and, above all, contribution to the 2030 Agenda, in particular Sustainable Development Goal 12, which calls for sustainable production and consumption.

Many organizations are currently making progress in defining indicators to measure circularity, especially in the private sector(Circular Metrics - Landscape analysis, WBCSD & Climate KIC). These indicators are expected to go beyond the measurement of material flows and to show the systemic change implied by the circular economy, which affects the entire economy and includes all products and services.

The European Commission has created a framework for monitoring the circular economy based on indicators on resource and raw material efficiency, published on the Eurostat website.

On the other hand, the World Business Council for Sustainable Development, in the context of its Factor 10 initiative on circular economy, is working on the definition of a circularity monitoring framework to help the private sector measure its contribution to the circular economy and be able to scale this information to risk management and decision making.

Due to its relevance, the circularity measure has been the theme chosen for the second year of work of Forética's Circular Economy Action Group, made up of ten companies from different sectors of activity that are firmly committed to leading business action in the circular economy in Spain.

With them, from Forética we will continue to generate knowledge on the subject, bringing our partners together to contribute to a more circular ecosystem and to call other organizations to action to continue advancing in the achievement of the SDGs. As suggested in the European Union's reflection document Towards a sustainable Europe by 2030, the circular economy is a key axis to ensure a more competitive, more inclusive and more sustainable Europe, which is the Europe demanded by the 2030 Agenda.

The next stop will be Helsinki, Finland, where the World Circular Economy Forum will be held, a global meeting place to discuss the most relevant challenges that need to be addressed to accelerate the transition to the circular model.

[1] Private investments, jobs and gross value added related to circular economy sectors. Number of persons employed. Eurostat
[2] Private investments, jobs and gross value added related to circular economy sectors. Value added at factor cost (M Euro). Eurostat
[3] Private investments, jobs and gross value added related to circular economy sectors.Gross Investment in tangible goods (M Euro). Eurostat
[4] Circular material use rate. % of total material use. Eurostat
[5] The Circularity Gap Report. Circle Economy (2018)

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