What is the Circular Economy? Why does it benefit us all?

The circular economy: discover what it means, how it benefits you, the environment and our economy.

Every year, the European Union generates an enormous amount of waste, exceeding 2.200 billion tons. Aware of this problem, the EU is working on updating its legislation on waste management. The main objective is to encourage a change towards a more sustainable model known as the circular economy.

But what exactly does the circular economy mean? And what would be the benefits?

What is the circular economy?

The circular economy is a production and consumption approach that promotes collaboration, rental, reuse, repair, renewal and recycling of existing materials and products for as long as possible. This makes it possible to significantly extend the life cycle of the products.

In practice, reducing waste to a minimum involves efficient materials management. When a product reaches the end of its useful life, instead of throwing it away, we seek to keep its materials within the economy through recycling. This process allows them to be used again to create new products and generate more value instead of wasting them.

We are witnessing a significant shift in the traditional economic paradigm, moving away from a linear approach. This conventional approach is based on a sequence of production, consumption and waste. In contrast, we are adopting a more sustainable and conscious model that seeks to reduce energy and material consumption, while encouraging reuse and recycling.

Within this model there is also planned obsolescence, which is when a product is designed to have a limited useful life in order to encourage consumers to buy it again. The European Parliament has called for action to address this practice and prevent it from harming consumers.

Benefits: why do we need to shift to a circular economy?

To protect the environment, it is important to encourage reuse and recycling. product recycling. These practices help reduce the extraction of natural resources, thus preserving the landscape and habitat. In addition, they contribute to limiting the loss of biodiversity on our planet.

The circular economy offers another important benefit: the reduction of total annual greenhouse gas emissions. According to the European Environment Agency, it has been determined that industrial processes and product use contribute to 9,10% of total greenhouse gas emissions in the European Union. On the other hand, adequate waste management represents an additional 3,32%.

If more efficient and sustainable products can be created from their conception, energy and resource consumption could be significantly reduced. This is crucial, as it is estimated that more than 80% of a product's environmental impact is determined during the design phase.

If we move towards products that are more reliable and can be reused, improved and repaired, we could significantly reduce the amount of waste generated. One of the growing problems is packaging, with the average European producing about 180 kilos of packaging waste per year. The objective is to combat excess packaging and improve its design to promote reuse and recycling.

Reduce dependence on raw materials

With the growth of population worldwide, the demand for raw materials is increasing. However, it is important to keep in mind that the availability of certain raw materials is limited.

Supply shortages are a challenge affecting some European Union countries, meaning they depend on other countries for their raw materials. According to Eurostat, approximately half of the raw materials consumed by the EU are imported.

Since 2002, trade in raw materials between the European Union (EU) and the rest of the world has experienced significant growth. The total value of trade, which includes both imports and exports, has roughly tripled. However, it is important to highlight that in this trade exchange, EU exports are growing at a faster rate than imports. Despite this, the EU remains a net importer of raw materials, meaning it still imports more than it exports in this specific category. In 2021, this resulted in a trade deficit of €35.500 billion.

Recycling raw materials is a practice that helps reduce supply-related risks. By recycling, price volatility is reduced, availability is ensured and dependence on imports is reduced. In this way, a more sustainable and secure approach is promoted in terms of material sourcing.

This situation is especially relevant when it comes to critical raw materials, which are essential for the manufacturing of technologies that play a fundamental role in achieving climate goals, such as batteries and electric motors.

Create jobs and save consumers money

Moving towards a more circular economy has numerous benefits. In addition to increasing competitiveness, it also stimulates innovation, drives economic growth and creates jobs. It is estimated that up to 700.000 jobs could be generated in the European Union alone by 2030. This approach towards a sustainable economy promotes balanced and profitable development for all sectors involved.

Redesigning materials and products for circular use would also drive innovation in different sectors of the economy.

Thanks to advances in product innovation and durability, consumers can now enjoy more durable and innovative products that improve their quality of life. These products also save them money in the long run since they won't have to replace them frequently.

What is the EU doing to become a circular economy?

In March 2020, the European Commission introduced the action plan for the circular economy. This plan aims to promote a more sustainable design of products, reduce waste generation and give greater power to consumers. A concrete example is the creation of the right to repair, which seeks to ensure that products are repairable rather than easily discarded. Particular attention is paid to resource-intensive sectors, such as electronics and ICT, plastics, textiles and construction.

In February 2021, Parliament took an important decision by passing a resolution on the new circular economy action plan. This resolution calls for the implementation of additional measures to achieve a fully circular and environmentally sustainable economy. One of the main goals is to eliminate toxic emissions and achieve carbon neutrality by 2050, including stricter recycling standards and binding targets for materials use and consumption by 2030.

In March 2022, the Commission launched the first set of measures with the aim of accelerating the transition to a circular economy. The proposals cover various initiatives to promote sustainable products, empower consumers in their transition towards greener practices, review regulations around construction products and establish a comprehensive strategy on sustainable textiles.

In November 2022, the Commission proposed new packaging rules at EU level. The purpose of this initiative is to reduce the amount of waste generated by packaging and improve its design. One way to achieve this is through clear labeling that encourages reuse and recycling. In addition, a transition is sought towards the use of plastics of biological origin, which are biodegradable and compostable.

With information europarl.europa.eu