On 12 March 2020 the European Commission announced an action plan to promote the circular economy with particular emphasis on the cradle-to-grave recycling of electronic items.
The circular economy model, which manifested officially in France in 2015, shows us that an alternative viable model can exist. How does it allow companies to manage their waste more effectively and in a more environmentally-friendly way?
What is the circular economy?
This is increasingly a question of the circular economy for companies. Often associated with waste management, sustainable development and the environment, the circular economy isn’t merely an environmental approach, or even an economy for waste and recycling. In France, the concept of the circular economy has been written into the French environmental, energy and consumer Codes since 2015. The “Energy Transition for Green Growth” law has since 18 August 2015 recognised the transition towards a circular economy as instrumental to the national sustainable development goal (article L. 110-1 indent 5 of the French Environment Code) (article L. 100-4 of the French Energy Code).
This is how this law describes the circular economy:
“The transition towards a circular economy is intended to overtake the linear economic model of extraction, production, consumption and disposal by calling for the frugal and responsible use of natural resources and raw materials as well as prioritising the prevention of waste generation, particularly through the re-use of products in accordance with the hierarchy of waste handling; re-use, re-cycle or, as a last resort, recover (energy etc.).” In other words, the circular economy is an alternative to the linear economy paradigm: a more sustainable path for companies, aiming at the frugal and effective management of resources.
In France, ADEME (the French Agency for Environment and Energy Management) sets out the circular economy in the form of key elements or pillars:
– Sustainable procurement: use renewable resources and raw materials.
– Eco-design: take into account the whole life cycle, minimising environmental impacts.
– Industrial and territorial ecology (ITE): implement a form of inter-company organisation by exchanging flows or sharing needs.
– Functionality economy: prioritise use over ownership and sell a service rather than a product.
– Responsible consumption: encourage the buyer to make their choice taking into account the environmental impacts at every stage of the product’s life cycle (whether goods or services).
– Extend the working life: by repairing, or by selling or donating for second-hand use.
– Recycling: use raw materials from waste.
How does the circular economy reconcile the environment with company competitiveness?
The circular economy offers many benefits that reconcile the environment and industrial performance. As well as being good for the planet, the transition to this new economy encourages growth, creates employment and breathes new life into our economy. But how exactly? The main advantage of the circular economy is that it transforms resource constraints into opportunities for the renewal and consolidation of a company’s economic model. The primary objective being to optimise the lifetime of consumer goods and ensure that nothing is lost: waste is then transformed into a resource from which to make another product. The pathway to the circular economy then allows a company to become more competitive, through lower costs for resources consumed and for waste processing. Making the most of resources (through eco-design and reprocessing) also gives value to materials that were previously worthless. From the same viewpoint, circular energy improves company competitiveness by providing an opportunity to co-buy with other companies and so reduce the related costs through economies of scale.
As well as these economic benefits, implementing innovative economic models allows companies both to improve existing customer loyalty and to acquire new markets, making the most of their intangible assets. The circular economy helps not only to strengthen the company’s reputation, but also its regional anchoring. Adopting a strategy of transition toward the circular economy appears now to be a way of linking a company’s traditional economic goals to the generation of positive socio-environmental impacts.
How will the circular economy allow for better waste management?
To facilitate the move to a circular economy, the European Commission is increasing its legal texts, particularly regulations, in favour of improved waste management. Published in the Official Journal of the European Union of 14 June 2018, the circular economy package should then accelerate the wider application of waste recycling throughout the EU and should in the longer term result in the elimination of landfills. This package in particular provides for encouraging the transformation of waste into resources, reconsidering waste as instead being materials for recycling, and includes proposals to combat food waste. This agreement also sets a preparatory objective for the re-use and recycling of municipal waste of 55% in 2025, 60% in 2030 and 65% in 2035. It also gives recycling targets for packaging waste (65% should be recycled by 2025 and 70% by 2030). More than half of plastic waste should then be recycled by 2030.
The environment, the climate and human health all benefit, but are not alone in that. The four legislative texts form part of an evolution of European policy toward a circular economy, in other words a system in which the value of products, materials and resources is retained within the economy for as long as possible. All these new measures brought by the circular economy, ranging from “waste management” to the “circular economy” itself, require a change to the company paradigm. In this context, implementing a sustainable development strategy has today become a fundamental challenge for the proper management of any company. As well as these obligations, the principles of sustainable procurement, eco-design and recycling of raw materials are assets in responding to the market’s new expectations.
How exactly will these measures be implemented?
The Ministry for Ecological and Inclusive Transition in April 2018 presented the Roadmap for the Circular Economy (FREC – Feuille de Route pour l’Économie Circulaire). This roadmap sets out the major directions to follow in order to graduate from a linear economy to a circular economy that integrates the whole life cycle of products, from their eco-design through to their scrapping, via their use and limiting any waste. The Roadmap enshrines the translation into action of the French law “Energy Transition for Green Growth” of 11 August 2015. It brings together 50 measures, developed in consultation with all the stakeholders involved, around 4 main challenges: produce better; use better; get buy-in; manage waste better.
Thus companies in every sector are being called upon to better manage their waste and to use fewer resources. The extension of the “polluter pays” principle to new products is one of the main measures contained in the Roadmap. It aims to integrate eco-design, the incorporation of recycled materials, and re-use & repair into company practices. To further encourage eco-design, the Roadmap also plans to deploy voluntary ecological labelling of products and services in the five pilot sectors (furniture, textiles, hotels, electronic goods and food products) and extend this to other sectors.
Generating 247 million tonnes of waste annually, the construction sector is responsible for more than two-thirds of the waste produced in France. Companies operating in public works and construction are of course covered by specific measures to improve the sorting, re-use and reclamation of waste. The main objectives are to review the operation of construction waste management in order to deter it going to landfill and allow it to be recycled. The Roadmap to the Circular Economy thus commits construction companies to fundamentally review the current arrangements for waste assessment before demolition, to provide a solid and effective basis for the subsequent re-use and reclamation of materials and waste from construction sites. The “Energy Transition for Green Growth” law (2015) coupled with the Roadmap for the Circular Economy further provide for a 50% reduction in landfill use between 2010 and 2025. These new approaches are of considerable interest going forward for everyone involved: the reduction of their environmental footprint, cost savings, and a positive social and societal impact for construction sites.