The multi-billion benefits of moving to a circular economy

Moving to a circular economy could help boost the EU’s economy by €324 bn, according to a new report.

Published by the Aldersgate Group, it includes a range of business trials and case studies, which show the benefits of moving to a circular economy.

According to the report, a series of 28 pilot projects, which were all part of the REBus programme, delivered €5.62m in financial savings and cut material consumption and greenhouse gas emissions by 62,619 tonnes and 1,953 tonnes, respectively.

The show shows that adopting the business models tested by these pilots across their respective economic sectors could increase the EU economy’s gross value added by up to €324bn by 2030.

It would also cut material demand by up to 184 million tonnes, avoiding an additional 172 million tonnes of material use and reducing emissions of 154 million tonnes of CO2 by the same date.

The trials included one by communications giant Sky to trade in mobile phones, mid contract, which was launched in March.

‘It is expected that this scheme will improve Sky’s customer offer, allow Sky to retain the asset value of the returned products and contribute better environmental practices,’ the report states.

‘If successful, Sky may also explore the “take-back” potential with wearable technology and other gadgets.’

‘Regulatory obstacles’

Another trial involved the mattress and bedding manufacturer Naturalmat, which uses % biodegradable material wherever possible.

The report states Naturalmat worked with REBus 
to redesign their mattresses to increase re-use at end of life, reduce their own waste to landfill and disrupt the market by proving that fewer mattresses needed to be sent to landfill.

The mattress construction process now uses 50% less adhesives which make the products easier to disassemble at the end of their life.

According to the report, the new initiatives are estimated 
to generate additional income of £35,000, while delivering 81 tonnes of material for recycling and 89 tonnes for re-use.

But the report warns that businesses often face a number of barriers to taking greater action, ranging from regulatory obstacles and a lack of effective market signals to difficulties in obtaining finance or technical advice to drive innovation.

It identifies six key areas for the European Commission to work to help encourage businesses to change their ways, including expanding the use of circular economy criteria in public procurement.

The report also recommends EU members develop pricing mechanisms that support material re-use where it is environmentally effective to do so.

‘The circular economy package is delivering welcomed progress on some of the barriers that are slowing down business action on resource efficiency,’ said the executive director of the Aldersgate Group, Nick Molho.

‘However, an economy-wide shift to much greater resource efficiency will take time. To invest in new business models, more resource efficient processes and new supply chains, businesses need the assurance that the resource efficiency agenda will remain a priority for the EU in the long term.’

The head of sustainability at Kingfisher Plc, Caroline Laurie, added: ‘We know our customers want to get more from less, re-using and using longer, so the circular economy remains a key priority for Kingfisher but to accelerate activity, businesses require a more enabling policy environment that starts with the EU.’

Photo by Friends of Europe