Unveiling The EU’s Circular Economy Action Plan: Climate-Proofing Capitalism With Circularity?

by Dafina Marashi

This will not be the typical debunking article that the title would have you believe. But I promise one will follow. Let’s carefully get into what the European Commission is planning for a circular economy and what changes we can or cannot expect. 

What is it and why is it significant?

Back in 2015, the European Commission adopted its first Circular Economy Action Plan (CEAP). This initial CEAP was entirely completed in 2019, even though parts of its 54 actions are still being worked on, as noted by the implementation report [1]. A new CEAP, that would be in line with the 2019 European Green Deal, followed in 2020. The current CEAP with its 35 actions is a crucial component of the Green Deal, the EU’s roadmap to climate neutrality, as detailed in the Annex of the New Circular Economy Action Plan [2]. Transitioning to a circular economy will be necessary to ensure a sustainable future for various reasons. 

One of the more obvious reasons is that excessive production and consumption in the EU are closely linked to high levels of resource extraction. Raw material and natural resource extraction and processing account for around 18% of total greenhouse gas emissions associated with EU consumption (excluding agricultural and energy raw materials) and contribute to over 90% of biodiversity loss and water stress [3, 2]. Such negative consequences would be furthered in the future by growing global consumption of material like fossil fuels, biomass, minerals, and metals. A report by the OECD projects the world’s nations to consume double the amount of raw material by 2060 [4].

Transforming the current economy from a “take-make-waste” into a ”reduce-reuse-recycle” system is indispensable to the new EU Industrial Strategy and bears mitigation potential as well as other ecological and social benefits [2]. In a 2018 report, Cambridge Econometrics, Trinomics and ICF estimate that the circular economy has the potential to increase EU GDP by 0.5% additionally by 2030 (compared to a baseline that includes data up to 2016) and create around 700,000 new jobs [5].

What is the plan intended to accomplish?

The Commission places great importance on the CEAP to help deliver on climate neutrality through decoupling economic growth from resource use, as well as supporting the competitiveness of the EU, and assisting the Just Transition

Although the belief that economic growth can be decoupled from emissions prevails over many policy narratives internationally, there is not enough empirical evidence to support absolute decoupling actually happening on a large scale [6]. What this means is that in a green growth world, many products and services may be designed to be more resource efficient, but overall consumption could still rise and foster economic growth that leads to higher resource depletion and greenhouse gas emissions. Especially wealthier societies would thus, most likely continue to pollute the environment disproportionately, even if at a slightly slower speed. The question is if the rate of pollution would be slowed down enough through relative decoupling to keep global warming under the target of 2°C. This question is important to highlight and a stand-alone article will be dedicated to dive deeper into the link between green growth and the circular economy. 

Let’s see what else the Commission communicates on its circular economy action plan: 

The plan outlines a range of activities to ultimately create a strong and coherent product policy framework [2]. To date, no such consistent framework addressing sustainability and circularity in products exists. The ultimate goal of the CEAP is to make sustainable goods, services, and business models the standard and alter consumer habits to eliminate waste production altogether.

To achieve these ambitious aims, the CEAP prioritizes targeting key product value chains, decreasing waste generation and strengthening the EU internal market for high quality secondary raw materials. The key product value chains concern high environmental impact, end and intermediary products with great potential to be designed, traded, used, and decomposed in circular ways [2]. According to the CEAP these include so far, electronics and information and communication technologies (ICT), textiles, batteries and vehicles, packaging, plastics, construction and buildings, and lastly food, water, and nutrients [2]. 

Actions in these product areas and sectors will feed into different strategic efforts at the EU level, such as: the Industrial Strategy, the Comprehensive European Strategy on Sustainability and Smart Mobility, the EU Strategy for Plastics in the Circular Economy, the EU Strategy for Textiles, the EU Chemicals Strategy and the Farm to Fork strategy to just name a few [7, 8, 9, 10, 11, 12]. 

What seems quite clear from this little introduction alone, however, is that a complete system change will likely not result from the Commission’s circular efforts as it stands now. The action plan only nibbles many areas of production and consumption policy, leaving the core of the neoliberal economic model whole [13].


[1] European Commission, Report from the Commission to the European Economic and Social Committee and the Committee of the Regions on the implementation of the Circular Economy Action Plan, https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN 
[2] European Commission, Communication From The Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions – A new Circular Economy Action Plan – For a cleaner and more competitive Europe (COM(2020) 98 final), https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN, accessed on 09.06.2023
[3] European Environment Agency, Improving the climate impact of raw material sourcing -EEA Report No 8/2021, https://www.eea.europa.eu/publications/improving-the-climate-impact-of, accessed on 09.06.2023.
[4] OECD, Global Material Resources Outlook to 2060, https://www.oecd.org/env/global-material-resources-outlook-to-2060-9789264307452-en.htm, accessed on 09.06.2023.
[5] Cambridge Econometrics, Trinomics, and ICF, Impacts of circular economy policies on the labour market, http://trinomics.eu/wp-content/uploads/2018/07/Impacts-of-circular-economy-on-policies-on-the-labour-market.pdf, accessed on 09.06.2023
[6] Parrique, T., Barth, J., Briens, F., Kerschner, C., Kraus-Polk, A., Kuokkanen, A., & Spangenberg, J. H., 2019, Decoupling debunked. Evidence and arguments against green growth as a sole strategy for sustainability. European Environmental Bureau, eeb.org/library/decoupling-debunked
[7]European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Updating the 2020 New Industrial Strategy: Building a Stronger Single Market for Europe’s recovery: https://commission.europa.eu/system/files/2021-05/communication-industrial-strategy-update-2020_en.pdf, accessed on 30.06.2023
[8] Europa, Sustainability and Smart Mobility Strategy, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12438-Sustainable-and-Smart-Mobility-Strategy_en, accessed 30.06.2023
[9] European Commission, European Strategy for Plastics in a Circular Economy, https://www.europarc.org/wp-content/uploads/2018/01/Eu-plastics-strategy-brochure.pdf, accessed on 30.06.2023
[10] European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: EU Strategy for Sustainable and Circular Textiles, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022DC0141, accessed on 30.06.2023
[11] European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Chemical Strategy for Sustainability, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2020%3A667%3AFIN, accessed on 30.06.2023
[12] Europa, Circular Economy Action Plan Objectives, https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en, accessed on 30.06.2023
[13] Nogueira, A., 2022, Are Soft Legal Measures in Circular Economy Action Plans Enough to Permeate EU Strong Economic Core Regulations Bringing Systemic Sustainable Change?, Circ.Econ.Sust., https://doi.org/10.1007/s43615-022-00227-0
Categories EU - Policies

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