EU Circular Economy Policy Guide

EU Circular Economy Policy Guide

With one of the most comprehensive agendas for transitioning to a sustainable economy, the EU is implementing stringent targets and coordinating action around specific policies to achieve its goals. Keeping an eye on these changes will be critical not only for compliance in the waste and recycling industries, but it's also crucial for accessing relevant opportunities for circular economy innovation.

As the EU sets its agenda, the EU Green Deal serves as a guiding north star driving a large number of initiatives, policies and targets related to waste and recycling. It prioritizes a comprehensive economy-wide approach to achieving carbon neutrality in the EU by 2050 and reducing net greenhouse gas emissions by 55% by 2030. 

EU Waste Management Targets

To drive more action, Europe has set high recycling and stringent landfill reduction targets, as part of its Waste Framework Directive (2008) and Landfill Directive (1999). These include:  

• Increase municipal waste recycling or preparing waste for re-use to 55% by 2025, 60% by 2030, and 65% by 2035. 
• Increase packaging waste recycling to 65% by 2025. 
• Reduce landfill waste to 10% by 2035.

Additional national targets exist in France, Germany, Portugal, Sweden, Austria (reusable beverage packaging to 25% by 2025 and 30% by 2030) and Romania.

Currently, member states are struggling to keep up with these targets. Highlights from a 2023 assessment of the likelihood of countries to meet their targets show: 

• 18 EU countries are at risk of not meeting the municipal waste recycling or preparing for reuse target of 55% for 2025. 
• 13 EU countries are at risk of failing to reduce their municipal waste sent to landfills by 10% by 2035. 
• 19 countries are at risk of missing the target for plastic packaging recycling target of 50% by 2025.

In addition to these directives, the Waste Shipment Regulation (WSR), updated in 2023, includes new measures to curb illegal waste trade and limit the environmental damage from waste exports outside of Europe. The regulation improves the assessment of the shipment of waste exports to non-OECD countries, where waste management is less regulated. It also bans the shipment of hazardous waste and non-hazardous plastic to non-OECD countries, unless they can demonstrate strong waste management.

EU's Circular Economy Action Plan

Considered one of the main pillars of the EU Green Deal, the Circular Economy Action Plan (CEAP), passed in 2020, aims to simultaneously transition to a circular economy, while promoting economic growth and job creation. Recent updates to the CEAP monitoring framework in 2023 place new emphasis on material efficiency and keeping consumption within planetary boundaries.

CEAP targets considerations across the value chain, starting with sustainable design, noting that "while up to 80% of products’ environmental impacts are determined at the design phase," producers need more incentives to make their activities circular. It aims to enhance policies and legislation across key industry value chains to: 

• Improve product durability 
• Increase product resource and energy efficiency
• Increase recycled content of products
• Enable remanufacturing and high-quality recycling
• Reduce carbon footprints of products
• Restrict single-use and planned obsolescence
• Ban the destruction of unsold durable goods
• Incentivise product-as-a-service business models
• Digitalise and enable data sharing of product information (digital passports, tagging, watermarks, etc.)
• Incentivise product performance across these circular aims

CEAP Highlights for Waste Managers: 

• Extended Producer Responsibility: The concept that manufacturers are responsible for ensuring their products do not negatively impact society or the environment can support partnerships with waste managers. Updates to the Waste Framework Directive have led to the requirement for member states to establish EPR fees to boost recyclability and the Packaging and Packaging Waste Directive requires member states to establish systems for returning or reusing or recycling packaging from consumers to producers to boost recycling rates.  
• Polluter Pays Principle: Reorienting financial flows to disincentivise waste generation can support investments into waste alleviating services offered by waste managers. 
• Improving secondary materials markets: Within the CEAP, a main policy goal is improving the infrastructure for secondary materials markets to improve recycling and reuse rates. 
• Industrial symbiosis certification: Industrial symbiosis is the use of industrial byproducts as inputs in other manufacturing processes. The EU seeks to enable industrial symbiosis with a reporting and certification framework.
• Digital tracking and traceability focus: The EU aims to improve digital tracking, tracing and mapping of resources. This includes vital information for waste managers such as material composition data and recycling requirements. 
• Circular Economy Finance Support Platform: As part of its CEAP, the EU is launching a platform to guide and promote projects through financial capacity building and incentives. 
• Extended training opportunities: The EU will support SMEs through training and advice through the European Resource Efficiency Knowledge Centre. 

Priority Sectors and Linked Policies

Product Design and Labelling

• Ecodesign directive (2009), 
• Ecodesign for Sustainable Products Regulation (proposed March 2022)
• Energy Labelling Framework Regulation 

Electronics and ICT (E-waste) 

• Waste from Electric and Electronic Equipment (WEEE) Directive
• Critical Raw Materials Act

Batteries and Vehicles

• End-of-Life Vehicles Directive
• EU Battery Regulation

Packaging

• Packaging and Packaging Waste Directive 
• Proposed changes include updates such as restrictions to single-use plastic packaging, recycled content of plastic packaging, 2030 packaging reuse targets, deposit return system requirements, and PFAS restrictions. 

Plastics 

• Directive on Single Use Plastic Products
• European Plastics Strategy

Textiles

• Noteworthy target: Member States are required to set up separate textile collection systems by 1 January 2025. 
• EU Strategy for Sustainable and Circular Textiles
• Textiles Ecosystem Transition Pathway, published in 2023
• Textile Labelling Regulation

Construction and Buildings

• Waste Framework Directive targets (see above).  

Food, Water and Nutrients

• A 2023 proposed amendment to the Waste Framework Directive includes food waste reduction targets of 10% in processing and manufacturing and 30% per capita jointly in the retail and consumption sectors by 2030.  

The EU's ESG Agenda

Another pillar of the EU Green Deal that extends to Europe's policy agenda related to social responsibility is its environmental, social and governance (ESG) legislation, which include requirements, which many waste managers are subject to.

• CSRD: To promote sustainable finance and corporate sustainability, companies of a certain size are now required to report their ESG performance under the Corporate Sustainability Reporting Directive (CSRD), with phased in requirements for reports published in 2025 for the reporting year 2024. 
• EU Taxonomy: In addition, many companies share data on how their operations align with the EU Taxonomy, used to classify which economic activities are considered "sustainable" for investment purposes. 
• CSDDD: Finally, The Corporate Sustainability Due Diligence Directive (CSDDD) also passed recently to promote supply chain transparency and protect the environment and human rights. 
• EU Green Claims Directive: To minimize the risk of greenwashing through the labeling or marketing of products as sustainable without verification, the EU has introduced a Green Claims Directive to establish guidelines and rules for marketing products or services as "sustainable." This will help consumers to understand the available options better. 

This policy guide serves as a resource for waste managers to understand their regulatory compliance risks. Perhaps even more importantly, it outlines the levers through which the EU will promote circularity in coming years.