Circular Economy, European Green Deal & Sectoral Impacts

03.05.2023
 Content

• Current developments and trends related to green economy

• Border carbon regulation mechanism

• Circular economy action plan and sectoral effects

• European Green deal

• Sectoral green transformation pathways

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1. Current developments
and trends related to
green economy
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 AGENDA

1 Green Economy

2 Current Developments

3 Circular economy

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 GREEN ECONOMY

A green economy is an economy that aims to achieve environmental sustainability, emission

reduction, social justice, and stable economies.

It views natural capital as a critical economic asset and aims to preserve the ecosystem.

An important aspect is resource efficiency, which means the reduction of the amount of
resources needed, and emissions and waste generated per unit of product or service.

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 IMPLEMENTATION OF GREEN ECONOMY

Politics Industry Consumers

Regulatory Managerial role Increased awareness

Framework
Technical Innovation Sustainable decisions
incentives

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 DEVELOPMENT IN GREEN ECONOMY

Energy Agriculture Transportation

Circular
Urban Design Finance
Economy

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 GREEN ENERGY

A shift from fossil fuels to renewable energy sources like wind, solar and hydropower
is necessary to reduce greenhouse gas emissions and minimize the use of
resources.

• Politics set targets and benefits for transitioning to renewable energy

• Companies invest in renewable energy projects

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 GREEN AGRICULTURE

Sustainable methods of agricultural production including agroforestry and the

reduction of chemicals lead to
• More biodiversity
• Restoring soil health
• Saving water and emissions

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 GREEN TRANSPORTATION

Sustainable transportation solutions include

• Electric vehicles
• Public transportation
• Active transportation like cycling

The governmental promotion of electric vehicles led to increased development in electric

vehicle technology and sale.

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 GREEN URBAN DESIGN

Cities are becoming more green to regain livability and be resilient to climate change.

Infrastructure Buildings Green space

Transportation Sustainable Parks
materials
Drainage systems
Solar

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 GREEN FINANCE

Some governments put a price on emissions to encourage finance damage from

climate change. Carbon pricing and emission trading encourage businesses and
people to reduce their emissions or carbon footprint.

There is an uprising interest in green finance like green bonds or banks, that invest
money in environmental friendly activities.

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 CIRCULAR ECONOMY

Circular economy is a closed-loop approach that aims to minimize environmental

impacts by reducing resoures and waste through the circulation of materials.

It can be applied to a wide range of industries, such as manufacturing, construction

and agriculture.

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 CIRCULAR ECONOMY

1 Step 1
Resources are kept within economy Reduce
as long as possible.
Step 2
• Minimalization of waste and
resources 2 Reuse
• Conservation of natural resources
3 Step 3
Recycle

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 SOURCES

• Sustainability in Global Value Chains Measures, Ethics and Best

Practices for Responsible Businesses, Edited by Michael Henke Holger
Kohl
• https://emeritus.org/blog/finance-what-is-green-finance/
• https://www.epa.gov/circulareconomy/what-circular-economy
• https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO
05603/circular-economy-definition-importance-and-benefits
• The global green economy: a review of concepts, definitions,
measurement methodologies and their interactions, Lucien
Georgeson, Mark Maslin, Martyn Poessinouw
• https://www.unep.org/regions/asia-and-pacific/regional-
initiatives/supporting-resource-efficiency/green-financing
• https://www.oecd.org/greengrowth/sustainable-agriculture/48268377.pdf

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2. Border carbon
regulation mechanism

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A N O V E RV I E W O F T H E M E C H A N I S M A N D I T S I M P O RTA N C E I N P R O M OT I N G
S U S TA I N A B I L I T Y M A N A G E M E N T P R A C T I C ES

3 R D O F M AY, 2 0 2 3

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Agenda

1. What is Carbon Border Adjustment Mechanism (CBAM)?

2. Why do we need CBAM?
3. The Role of CBAM in Promoting Sustainable Trade Practices
4. Carbon Pricing
5. Impact of CBAM on Sustainability Management
6. CBAM Perspectives of The United States and EU
7. Effects of EU’s CBAM regulation on Türkiye

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 A. Introduction

1. What is Carbon Border Adjustment Mechanism (CBAM)?

The Carbon Border Adjustmeny Mechanism (CBAM) is a policy tool designed to reduce carbon
emissions associated with international trade.
CBAM aims to address the issue of "carbon leakage," where companies move production to
countries with lower environmental standards or where there is no carbon pricing scheme,
leading to increased carbon emissions.
CBAM does this by imposing a carbon cost on imported goods, thereby encouraging countries
to adopt similar carbon pricing policies and incentivizing companies to reduce their carbon
footprint.
There are different approaches to CBAM, including border carbon tax and carbon inclusion
mechanism, but the ultimate goal is to promote sustainable trade practices and reduce carbon
emissions.

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 2. Why do we need for CBAM?
The global economy is highly dependent on international trade, which has led to increased carbon
emissions and environmental degradation by prioritizing industrialization and production.
One issue related to international trade is the concept of "carbon leakage."
 Carbon leakage occurs when companies move production to countries with lower environmental standards or where
there is no carbon pricing scheme.
 This can result in an increase in emissions in these countries, offsetting any emissions reductions achieved in other
countries that have implemented carbon pricing schemes.
 Carbon leakage can undermine global efforts to reduce emissions and mitigate the impact of climate change.

To address this issue, the CBAM was developed as a policy tool to reduce carbon emissions associated
with international trade.
CBAM aims to impose a carbon cost on imported goods, encouraging countries to adopt similar
carbon pricing policies and incentivizing companies to reduce their carbon footprint.
By promoting sustainable trade practices and reducing carbon emissions, BCRM helps to mitigate the
impact of climate change and protect the environment.

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3. The Role of CBAM in Promoting Sustainable Trade Practices
Encourages countries to adopt similar carbon pricing policies
◦ CBAM encourages countries to adopt similar carbon pricing policies by imposing a carbon cost on imported
goods, which can lead to a reduction in carbon emissions globally.

Incentivizes companies to reduce their carbon footprint

◦ Companies that reduce their carbon emissions will be able to produce goods at a lower carbon cost and
therefore, will be more competitive in the global marketplace.

Promotes sustainable trade practices

◦ CBAM promotes sustainable trade practices by reducing the incentive for companies to move production to
countries with lower environmental standards.

Fosters innovation
◦ CBAM can foster innovation in sustainable technologies and production processes by creating a demand for
sustainable products and practices. This can lead to the development of new and more sustainable
technologies, which can help to mitigate the impact of climate change.

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 B. Overview of Carbon Pricing

1. What is Carbon Pricing?

Carbon pricing has been around for much longer than many realize.
In 1990, Finland was the world’s first country to introduce a carbon tax.
Carbon pricing is a policy tool designed to reduce greenhouse gas emissions by assigning a monetary
value to the carbon content of fossil fuels or other sources of emissions.
The idea is to create a financial incentive for individuals and companies to reduce their carbon
emissions, by making it more costly to emit carbon.
Carbon pricing is seen as an effective way to reduce carbon emissions as it creates a market incentive
for individuals and companies to invest in low-carbon alternatives and reduce their carbon footprint.
There are two main types of carbon pricing:
◦ Carbon taxes system and,
◦ Emissions trading systems (ETS).

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 2. Types of Carbon Pricing

2.1. Carbon Tax System

In a carbon tax system, a tax is placed on each ton of carbon
dioxide equivalent (CO2e) emitted, based on the carbon content of
the fuel or activity producing the emissions.
The tax rate can be set by the government, and can be designed
to increase over time to encourage greater reductions in emissions.
Carbon taxes can be applied at different levels, including the
national level, regional or state level, or even at the level of
individual companies.
One of the advantages of a carbon tax system is that it creates a
clear and predictable cost for carbon emissions, which can
incentivize individuals and companies to reduce their carbon
footprint by investing in low-carbon alternatives and improving
energy efficiency.

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 2.2.Emissions Trading System (ETS)
An ETS is a policy tool designed to reduce greenhouse gas
emissions by placing a limit on the total amount of emissions
allowed in a given time period, and creating a market-based
system for emissions reductions.
Companies are then issued permits or allowances, each of which
represents the right to emit a certain amount of carbon.
Companies can buy and sell these permits with each other,
creating a market for emissions reductions.
The goal of an ETS is to create a financial incentive for companies to reduce their emissions by making it more
costly to exceed their allocated limit.
Companies that reduce their emissions below their allocated limit can sell their excess permits to companies
that are struggling to meet their limit. This creates a market for emissions reductions, which can incentivize
companies to invest in low-carbon alternatives and improve energy efficiency.
One of the advantages of an ETS is that it creates a flexible and market-based approach to emissions
reductions, which can encourage innovation and cost-effective emissions reductions.
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3. Pros and Cons of Carbon Pricing
Pros Cons

Encourages Innovation Potentially regressive

Market-Based Approach Economic impacts

Generate Revenue Political challenges

Clear and predictable costs Administration and enforcement

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 C. Impact of CBAM on Sustainability Management
Promotes sustainable trade practices
• The CBAM can create a level playing field for companies in countries with strong climate policies, by
imposing a border carbon adjustment on imports from countries with weaker climate policies.
Increasing the cost of imported goods
• The CBAM can increase the cost of imported goods from countries with weaker climate policies,
which can have economic impacts on both domestic and international industries.
Promoting innovation in low-carbon technologies
• The CBAM can incentivize innovation in low-carbon technologies by creating a market demand for
these technologies in countries with strong climate policies.
Generates revenue for climate mitigation
• The CBAM can generate revenue for governments, which can be used to invest in low-carbon
infrastructure and other climate mitigation efforts. This can support sustainability management by
providing funding for initiatives that reduce carbon emissions and promote sustainable
development.
Facilitates global cooperation on climate action
• The CBAM can facilitate global cooperation on climate action by providing a framework for countries
to work together to address the issue of carbon leakage in international trade to promoting
sustainability management
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 D. CBAM Perspective of The United States and EU

1. CBAM and USA

The USA is the world's second-largest emitter of greenhouse gases, behind China. The country has
committed to reducing its emissions by 50-52% below 2005 levels by 2030, as part of its efforts to meet
the goals of the Paris Agreement.
The Biden administration has signaled its support for the implementation of a CBAM, as a way to
prevent carbon leakage and promote global climate action. The administration has included a CBAM
proposal in its infrastructure plan, which is currently being debated in Congress.
The specific details of the proposed CBAM in the USA are still being developed, but it is likely to
involve the imposition of a carbon fee or tariff on imported goods, based on the carbon emissions
associated with the production of those goods.
The implementation of a CBAM in the USA could have significant impacts on global trade and on the
economies of countries that export goods to the USA. It could also create incentives for other countries
to adopt stronger climate policies, in order to avoid the cost of the carbon fee or tariff.
There are also potential challenges to implementing a CBAM in the USA, including concerns about the
potential impacts on international trade and on low-income consumers who may be disproportionately
affected by higher prices for imported goods.

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 2. CBAM and The EU
the EU aims to reduce its greenhouse gas (GHG) emissions by 55 percent from the 1990 benchmark
level by 2030. To reach that goal, the European Union will rely heavily on cap-and-trade in the form
of the EU Emissions Trading System (EU ETS), which covers emissions from power and heat
generation, industrial production, chemical manufacturing, and other sources.
The EU ETS works by setting a cap on the total amount of greenhouse gas emissions that are
allowed from covered installations. These installations are required to hold enough emission
allowances to cover their emissions, and can buy or sell allowances on the carbon market.
The CBAM would work by requiring importers of goods into the EU to purchase carbon allowances
at the border, based on the carbon emissions associated with the production of those goods. This
would create a level playing field for EU companies that are subject to the EU ETS.
The relationship between the EU ETS and the CBAM is that the CBAM would be a complementary
policy mechanism to the EU ETS. The BCAM would ensure that imported goods are subject to the
same carbon pricing as EU companies, thereby preventing carbon leakage.

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Overview of EU’s CBAM

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 The December 2022 trilogue produced significant developments
for the negotiations, culminating in a provisional and
conditional CBAM agreement. The CBAM initially applies to a set
of carbon-intensive, hard-to-abate industries.
 The original European Commission CBAM proposal sought to
cover aluminum, cement, electricity, fertilizers, and iron and
steel.
 Subsequent European Parliament amendments to the CBAM have
broadened the scope, which now covers hydrogen.

 However, there are also challenges to implementing the BCAM

alongside the EU ETS. These include concerns about the potential
impacts on international trade, the difficulty of accurately
measuring the carbon emissions associated with imported goods,
and the potential for increased administrative costs.

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https://www.youtube.com/watch?v=Cc4jfgFqQpM

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 3. Possible Effects of EU’s CBAM regulation on Türkiye*
The EU proposed CBAM is likely to have an impact on Türkiye, a country that
has a significant level of trade with the EU. This could affect Türkiye's exports to
the EU, which primarily consist of products in the manufacturing and agriculture
sectors.
Türkiye is not currently part of the EU's ETS, which means that it does not have
to comply with EU emissions reduction targets.
However, the CBAM could impose a cost on Turkish exports to the EU, making
them less competitive. This could lead to a reduction in demand for Turkish
goods, which could have negative economic impacts on Türkiye.
To mitigate the impact of the CBAM, Türkiye may need to implement stronger
climate policies, such as emissions reduction targets or a carbon pricing
mechanism, in order to be exempt from the carbon border tax.
 This would require significant investment in clean energy and other low-carbon
technologies, which could have positive impacts on Türkiye's long-term sustainability.

Overall, the CBAM is likely to have an impact on Türkiye's economy, and it will be
important for Türkiye to consider in the near future its climate policy options in
order to remain competitive in the global market.

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3. European Green deal &
sectoral green
transformation pathways

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 The European Green Deal

• The European Green Deal a roadmap or Industrial Plan supports the transition to
climate neutrality by enhancing the competitiveness of Europe's net-zero industry.

• The European Green Deal, approved in 2020, is a set of policy initiatives by the
European Commission with the overarching aim of making the European Union (EU)
climate neutral in 2050.

• It will transform the EU into a modern, resource-efficient and competitive economy,

ensuring:

-no net emissions of greenhouse gases by 2050

-economic growth decoupled from resource use
-no person and no place left behind
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General Business
 Benefits of The European Green Deal

fresh air, clean longer lasting

water, healthy products that
soil and can be repaired,
biodiversity recycled and re-
used

renovated,
cleaner energy and globally
energy efficient healthy and
cutting-edge clean competitive and
buildings affordable
technological resilient
food
innovation industry

future-proof
more public jobs and skills
transport training for the
transition

[1] A european green deal. European Commission. (n.d.). Retrieved May 2, 2023, from https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en 35
General Business
 Elements of The European Green Deal

Figure 1: The European Green Deal

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 36
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 The European Green Deal Policies

1.Increasing the EU’s climate ambition for 2030 and 2050

- The Commission already offered a detailed plan for achieving carbon neutrality by 2050. By March 2020, the first
"Climate Law" in Europe had been proposed. The climate Law will certain that all EU policies support the goal of
achieving carbon neutrality and that all sectors contribute.

- To achieve carbon neutrality, the EU is currently starting to modernize and transform the economy. However, current
policies will only reduce greenhouse gas emissions by 60% by 2050.The Commission was present an impact assessed
plan to increase the EU’s greenhouse gas emission reductions target for 2030 to at least 50% and towards 55%
compared with 1990 levels.

- These changes to legislation will encourage beneficial carbon pricing throughout the economy. A new, more ambitious
EU strategy on climate change adaptation was adopted by the Commission.

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 37

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 The European Green Deal Policies

2. Supplying clean, affordable and secure energy

- The energy system must be significantly carbon neutral in order to accomplish climate goals for
2030 and 2050. More than 75% of the EU's greenhouse gas emissions are connected to the
production and use of energy across all economic sectors.

- Consumers should be involved in and benefit from the transition to renewable energy. For
houses that are unable to pay for essential energy services, the risk of energy poverty must be
handled in order ensure an adequate standard of living.

- Smart infrastructure is also necessary for the transition to climate neutrality.

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 38

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 The European Green Deal Policies
3. Mobilizing industry for a clean and circular economy
- The full mobilization of industry is necessary to achieve a climate-neutral and circular economy. The transition presents a chance
to increase economic activity that is both job-intensive and sustainable.

- The European Commission will adopt the EU Industrial Strategy to address the twin challenges of green transition and digital
transition. Together with the Industrial Strategy, the new Circular Economy Action Plan will help modernize the EU's economy and
take advantage of circular economy opportunities at home and globally. Energy-intensive industries such as steel, chemicals and
cement are vital to the European economy as they supply several key value chains. Decarbonization and modernization of this
sector is essential.

- The Circular Economy Action Plan includes a 'sustainable products' policy that supports the circular design of all products based
on common methodologies and principles. The Circular Economy Action Plan guides the transition for all sectors, but action will
focus specifically on resource-intensive sectors such as textiles, construction, electronics and plastics. The Circular Economy
Action Plan also includes measures to encourage businesses to provide reusable, durable and repairable products and give
consumers choice.

- A sustainable product policy also has the potential to significantly reduce waste. Access to resources is also a strategic security
issue for Europe to implement the Green Deal. Digital technologies are playing a key role in many areas to reach the sustainability
goals of the Green Deal.

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 39

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 The European Green Deal Policies

4. Building and renovating in an energy and resource efficient way

- The construction, use and renovation of buildings require considerable amounts of energy and natural resources.

- To address the twin challenge of energy efficiency and affordability, the EU and the Member States should engage in a ‘renovation
wave’ of public and private buildings.

- The Commission actively implement legislation on building energy performance.

- In parallel, the Commission proposes to work with stakeholders on a new initiative on renovation in 2020. This will include an
open platform bringing together the buildings and construction sector, architects and engineers and local authorities to address
the barriers to renovation.

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 40

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 The European Green Deal Policies

5. Accelerating the shift to sustainable and smart mobility

- Transport accounts for a quarter of the EU's greenhouse gas emissions, and the movement is growing. To achieve climate
neutrality, a 90% reduction in transport emissions is needed by 2050.

- Multimodal transport needs a strong boost. This increases the efficiency of the transportation system.

- Automated and connected multimodal mobility will play an increasing role, together with smart traffic management systems
made achievable by digitalization. The price of transportation should reflect the environmental and health impact.

- In parallel, the EU should increase the production and use of sustainable alternative fuels for transport. By 2025, about 1 million
public charging and refueling points will be needed for 13 million zero-emission and low-emission vehicles on European roads.

- Traffic pollution is greatly reduced, especially in urban areas.

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 41

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 The European Green Deal Policies
6. From ‘Farm to Fork’: designing a fair, healthy and
environmentally-friendly food system
- European food is recognized for being high-quality, nutritious, and secure. It should now be accepted as a standard for
sustainability around the world.

- There are new opportunities for all operators in the food value chain. All parties involved will benefit from new scientific and
technological advancements as well as rising public demand for sustainable food sources.

- Farmers and fishermen in Europe are crucial to managing the transition.

- The strategic plans will need to reflect an increased level of ambition to reduce significantly the use and risk of chemical pesticides,
as well as the use of fertilizers and antibiotics.

- The Farm to Fork Strategy will contribute to create a circular economy as well.

- Lastly, the Farm to Fork Strategy will strive to stimulate sustainable food consumption and promote affordable healthy food for all.

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 42

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 The European Green Deal Policies
7. Preserving and restoring ecosystems and biodiversity
- Ecosystems offer necessary services including food, clean water, clean air, and shelter. They help control the climate and
minimize the effects of pests, diseases, and natural disasters.

- The opportunity for the world to develop a strong international framework for preventing biodiversity loss is the Conference of
the Parties to the Convention on Biological Diversity in Kunming, China, in October 2020. By March 2020, the Commission will
present a Biodiversity Strategy, which will be followed by specific action in 2021, to guarantee that the EU plays a significant role.
To achieve these goals, the biodiversity strategy will specify actions.

- All EU policies should contribute to preserving and restoring Europe’s natural capital. Forest ecosystems are under increasing
pressure, as a result of climate change. The EU’s forested area needs to improve, both in quality and quantity, for the EU to reach
climate neutrality and a healthy environment.

- The new EU forest strategy will have as its key effective afforestation, and forest preservation and restoration in Europe, to help
to increase the absorption of CO2,, reduce the incidence and extent of forest fires, and promote the bio-economy, in full respect
for ecological principles favorable to biodiversity.

- In order to reduce the many demands on the EU's land resources and fight climate change, a sustainable "blue economy" will
have to take priority.
[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF 43
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 The European Green Deal Policies
8. A zero pollution ambition for a toxic-free environment
- Creating a toxic-free environment requires more action to prevent pollution from being generated as well as measures to clean
and remedy it.

- The Commission will adopt a zero-pollution action plan for air, water, and soil in 2021 to address these connected challenges.

- The Commission will propose measures to address pollution from urban runoff and from new or particularly harmful sources of
pollution such as micro plastics and chemicals, including pharmaceuticals.

- The Commission will apply the knowledge obtained from the analysis of the existing air quality regulations.

- The Commission will review EU measures to address pollution from large industrial installations.

- To ensure a pollution-free environment, the Commission presents a Chemicals Strategy for Sustainability.

[1] EUR-lex.europa.eu. (n.d.). Retrieved May 2, 2023, from https://eur-lex.europa.eu/resource.html?uri=cellar:b828d165-1c22-11ea-8c1f-01aa75ed71a1.0002.02/DOC_1&format=PDF

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General Business
4. EU Action Plan &
Sectoral Effects

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4. EU Action Plan
& Sectoral Effects
3rd May 2023

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 AGENDA

1 EU Action Plan
Objectives, areas of action & timeline

2 Sectoral effects
Concept & sector examples

3 Critical evaluation
Opportunities & shortcomings

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 CIRCULAR ECONOMY ACTION PLAN

Circular Economy Action Plan (CEAP) by the European Comission is one of the main building
blocks of the European Green Deal, Europe’s new agenda for sustainable growth.

While the European Green Deal presents general principles, the

EU Circular Economy Action Plan is a policy paper with green
strategies and to-do lists for different areas to achieve the
EU's 2050 targets:

• Climate-neutral economy
• No net emissions of greenhouse gases by 2050
• Sustainable growth decoupled from resource use
• No person and no place left behind
• Stopping biodiversity loss

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 EU CIRCULAR ECONOMY ACTION PLAN

Achieving the transition towards a more circular European economy

• “We only have one Planet Earth and yet, by 2050 we will be consuming as if we had three.
The [action] plan will make circularity the mainstream in our lives and speed up the
green transition of our economy”
-- Virginijus Sinkevičius, EU’s environment Commissioner

The Action Plan sets out objectives in product design, production and consumption
• The new action plan announces initiatives along the entire life cycle of products: It
targets how products are designed, promotes circular economy processes, encourages
sustainable consumption, and aims to ensure that waste is prevented and the resources
used are kept in the EU economy for as long as possible.

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 ADAPTING THE ACTION PLAN

The action plan in 2015 was the first step for circular economy consulting and guiding at a
global level
• European Commission and EU prepared first action plan in December 2015. It introduced
the benefits of circular economy to the world and laid out the basis for answering how to
create a circular economy in Europe

Adapting the action plan in 2020 to the changing circumstances

• The pandemic and the growing resource, climate, and energy crises provoked changes to
the plan to make circular economy business models and sustainable products a norm in
Europe
• Call for more sustainable products to reach resource-efficient, climate-neutral, and
pollution-free European circular economy. Preparations for the new circular economy
action plan started in 2020. Finally, on March 30, 2022, the EU finalized the new plan.
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 AREAS OF ACTION

The Commission will implement a total of 35 actions listed in the action plan (ongoing)

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 THE NEW ACTION PLAN 2020

The four core themes of the Circular Economy Action Plan 2020
• The CEAP 2020 aims to make circularity work for people, regions and cities & lead global
efforts on circular economy

Make sustainable products Empower consumers and

1 2
the norm in the EU public buyers

Focus on lifetime of products

3 4 Ensure less waste
through a sectoral lens

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 NEWLY ADOPTED MEASURES IN 2022

Implementing the Ecodesign for Sustainable Products Regulation to

Sustainable products increase product circularity, energy performance, and overall
environmental sustainability

Sustainable and circular Strategy and legal rules with the motto of “fast fashion is out of
textile fashion” for a more resilient, competitive, and green industry.

A legal regulation to provide fairer competition for the construction

New Construction
sector. The goal is to achieve a well-functioning single market to serve
Products Regulation the European Green Deal.

Proposal for empowering consumers in the green transition:

Sustainable
Consumers will see the durability and reparability of products clearly
consumption to avoid greenwashing with digital product passports

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SUGGESTED MEASURES FOR DIFFERENT SECTORS

© European Union

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SUGGESTED MEASURES FOR DIFFERENT SECTORS

© European Union 55
SUGGESTED MEASURES FOR DIFFERENT SECTORS

© European Union

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 SECTORAL EFFECTS

The EU Action Plan focuses on the sectors where the potential for circularity is high:
electronics and ICT; batteries and vehicles; packaging; plastics; textiles; construction and
buildings; food; water and nutrients

• The former Action Plan was largely based on

sector-specific incentives with very little
regulation
• In contrast, the new CEAP is regulatory-based
with major new regulations to include stricter
targets and actions

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 SECTORS AFFECTED BY THE ACTION PLAN

Electronics Batteries Plastic

promote longer improve collection Expand ban of single-
product lifetimes and recycling rates of use packaging,
through reusability all batteries, recovery restrict addition of
and reparability of valuable materials microplastics

Textiles Construction Food

Simplify EU Textile Minimum targets for Integrated Nutrient
value chain, easy circularity principles Management Plan to
access to reuse and for whole lifecycle of manage inputs of EU
repair buildings agricultural sector

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 CRITICAL EVALUATION: OPPORTUNITIES

“A beautiful patchwork of initiatives pointing in the right direction”

• Zero Waste Europe (ZWE) welcomes proposal to create overarching sustainable
product policy framework as way to ensure that products which are either short-lived,
toxic, unrepairable, unrecyclable or untraceable, are phased out from the EU market.

The Action Plan makes the circular economy a norm:

• Industrial Emissions Directive: Detailed set of industrial rules, including a more sustainable and
greener economy and practices to improve public health.
• Packaging needs and waste review: By improving packaging design to promote reuse and recycling,
the EU will fight against excessive packaging to reduce waste.
• Proposal for confirming companies’ green claims: Companies are held responsible for substantiating
their environmental claims of their products/services by standard measuring. Consumers can make
sustainable decisions without greenwashing.

 HOWEVER, whilst this sentiment is welcome, it doesn’t go far enough (ZWE) 59

 CRITICAL EVALUATION: SHORTCOMINGS

“There is no such thing as sustainable products, there are only sustainable systems”
• Product policy framework lacks framework for prevention and reuse operations
ensuring that a “sustainable product” will not be wasted in a system designed for single-
use activities

Loopholes in the current CEAP threatening the transition to a real circular economy
• The 10% landfill target: works against waste prevention and pushes member states to invest in
incineration facilities instead of separate collection, reuse and recycling infrastructures
• Waste trade inside EU borders lacks transparency and traceability. A solution is needed to stop intra-
European dumping and downcycling and guarantee recycled content is safely reintroduced in the
production cycles
• Time is of the essence. EU needs to organize how reuse markets are going to operate at European
level: Some member states are moving ahead with the development of standards and tools for reuse,
but holistic European framework or guidance is not in place
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 Sustainability Management

Circular Economy, European Green Deal & Sectoral Impacts

Thank you for listening!

03.05.2023