ENERGY CIRCULARITY
OPINION
UNLEASHING THE EU’S CIRCULAR ECONOMY POTENTIAL
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Europe prides itself on leading the charge for sustainability, but when it comes to transitioning to a circular economy it has been stagnating. Despite consistent legislative efforts and ambitious rhetoric, the EU is still far from reaching its ambition to double its circularity rate by 2030.
E urope prides itself on leading the charge for sustainability, but when it comes to transitioning to a circular economy, it has been stagnating. Despite consistent legislative efforts and ambitious rhetoric, the EU is still far from reaching its ambition to double its circularity rate by 2030. To do this, Europe must shift from a linear to a circular mindset and quickly build on its current advantage, maintaining its lead in the technologies, services and industries that will drive the circular economy transition. It’s time for the EU to showcase its commitment to competitive sustainability, the ability of an economy to excel relative to international competitors in their transition to sustainable development, starting with the Circular Economy Act that Commission President Ursula von der Leyen highlighted in her recent political guidelines. European material consumption far exceeds sustainable levels, contributing to the global triple climate change crisis, biodiversity loss and pollution. In 2022, the average per capita CO2 material footprint in the EU 27 was 14.9 tonnes—900 kg more per person than in 2013, which was more than double the sustainable consumption level of around 6-8 tonnes per capita. The EU also generates about 2.2 billion tonnes of waste annually, an astonishing 4,815 kg per capita. Europe’s dependence on global imports for critical raw materials and fossil fuels is increasing, particularly those needed for the green transition, such as rare earths for wind turbines, silicone for solar panels and lithium for batteries. The extraction and processing of critical raw materials is geographically concentrated and exposes the European Green Deal Agenda to geopolitical
fluctuations and external shocks. The EU currently sources virtually all its rare earths from China plus more than 90% of its magnesium needs, 68% of the EU’s cobalt comes from the Democratic Republic Congo; 78% of its lithium from Chile. Allowing these resources to slip through linear processes and value chains represents an inexcusable loss of value. There has been some encouraging progress. Resource use in Europe has declined over the last decade, decoupling from economic growth. Waste generation has also decreased, with total per capita waste falling by 4.2% in the EU between 2010 and 2020. The EU boasts a recycling rate of 11.6%, higher than most regions globally. And the EU’s own research suggests that thanks to its policy leadership, it holds a technological edge over foreign competitors in critical value chains such as heavy industry, textiles and construction. However, resource use and waste generation have dropped by less than 5%; the trend has plateaued in recent years. So why is progress so slow when the EU was one of the first to push for circularity? It placed the Circular Economy Action Plan at the heart of its Green Deal, passed landmark legislation like the Critical Raw Materials Act and continues to enact regulations to reshape the single market toward circular solutions, including the Taxonomy Regulation, the Ecodesign for Sustainable Products Regulation and the Right to Repair Directive. Its progress has been patchy due to the linear thinking of consumers and business leaders. While EU policymakers have laid the groundwork for developing policies to promote the circular economy, implementation has been uneven. Policies have also suffered from a lack of clearly defined targets, resulting in limited impact at a sectoral level, particularly in high-waste sectors like plastics and chemicals. While EU funding is available, it is under- or ineffectively utilised. Capital flows have been redirected towards green
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THE FUTURE OF ENERGY
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