Global menu

Our global pages


EU Circular Economy – an opportunity for business?

  • United Kingdom
  • Environment - Product stewardship
  • Other


The European Commission is pressing ahead with its plans to stimulate Europe’s transition to a circular economy in the belief this will boost competitiveness, foster sustainable economic growth and generate new jobs. The Circular Economy concept embodies many of the current principles running through environmental legislation such as the waste hierarchy and producer responsibility and takes them to the next level. Existing legislation is unlikely to be scrapped, more likely strengthened. For example in relation to packaging waste the reuse and recycling targets will be increased to a minimum of 65% by weight of all packaging waste by 31 March 2025, increasing to 75% by 31 December 2030. Whilst this new approach will create opportunities for many businesses, it may create a headache for others as businesses look to redesign their products.

Product Design and Production

There will be an increased focus on product design, which is where the concept of a circular economy starts. This is particularly relevant to products such as electrical and electronic equipment, a fast growing waste stream. Whilst the WEEE Directive includes provisions relating to product design, that is not the key focus of that Directive.

The Commission will look to use the product design requirements under the Ecodesign Directive. To date this directive has concentrated on energy efficiency improvements, but going forward it will consider issues such as reparability, durability, upgradability, recyclability and the identification of particular materials of concern. As a first step the Commission has developed mandatory requirements for electronic displays i.e. flat computer screens and TV screens. These will shortly be proposed to Member States.

At the same time, producer responsibility schemes are being looked at. These schemes (in areas such as WEEE) were intended to incentivise producers to develop products that were easier and cheaper to recycle. However, in many Member States including the UK, producers are paying to recycle an amount of WEEE which arises at a collection site, as opposed to paying to recycle their own equipment. This means that whilst there is a financial incentive to keep the weight of a product as low as possible, at present there is no incentive to make the products themselves easier/cheaper to recycle.

The manufacture of products, and the waste which this generates is equally important. The Commission acknowledges that each sector is different when it comes to resource use, waste generation and management. The Commission will promote best practice in terms of waste management through its BREF documents.

Furthermore, there is a concern over the so called “planned obsolescence” of products in some sectors which the Commission intends to investigate through a programme of independent testing.

Product Labelling and Customer Behaviour

The Commission is testing the concept of a “Product Environmental Footprint” and is also looking at how the Ecolabel scheme could be made more effective. This reflects the contribution which consumer behaviour can make to the circular economy. The Commission believes that providing consumers with more accurate environmental information will help them to make better decisions about the products they buy.

Whilst certain customers may be influenced by the green credentials of the products they buy for others price will always be a key factor. The Commission is therefore encouraging Member States to provide incentives (including using the tax system) to ensure that product prices more accurately reflect the environmental costs associated with the particular product going forward if the product is not designed to be more sustainable it may become more expensive.

The Commission intends the public sector to play a role in supporting demand for these more sustainable products. Currently public procurement accounts for nearly 20% of European GDP, and the Commission itself intends to lead by example in relation to its own procurement for example in relation to the products it sources for its own use.


The Commission has proposed changes to legislation designed to increase recycling and reduce the amount of municipal waste that is landfilled. At present around 40% of waste produced by EU households is recycled. This figure varies markedly between different Member States, with rates as high as 80% in some States and as low as 5% in others. One proposed legislative change is an increased target for the recycling of plastic packaging, reflecting the fact that less than 25% of plastic waste currently collected is recycled and about 50% goes to landfill.

Food waste is another area of focus. Action is needed first to measure the amount of food waste that is produced. Waste Legislation also requires clarification to promote the use of food donation / use of food as an animal feed (as opposed to the current position where safe food is often thrown away as waste). This links to issues around food labelling and lack of understanding of “best before” dates which also need attention.

It is acknowledged that collection and sorting of waste is often partly financed by extended producer responsibility schemes. The Commission is proposing minimum standards on transparency and cost efficiency for these schemes.

Developing EU wide standards for secondary raw material is also important to increase confidence in such materials stimulating demand, as is work on the legal definition of waste to give industry greater clarity as to when something ceases to be waste.


Given the threat of climate change and concerns over water scarcity the Commission will promote the reuse of treated waste water.


ROHS and REACH continue to lead to a number of chemicals of concern being removed from the production process. However, products containing these substances are likely to be around for some time and present challenges when they come to end of life. The Commission will look at how best to address this.

Impact on business

The circular economy looks to take “cradle to grave” to a whole new level. It reflects a concern that businesses should operate in a more sustainable manner, and many businesses are already supportive of this. Business certainly has a role to play in creating demand for recycled materials.

As a manufacturer what steps could you take to reduce waste, extend the useful life of your products and reduce the amount of packaging handled?

As a retailer is it time to think about how goods are sold? We have seen a revolution in the vehicle rental market as more and more vehicles are sold on the basis of personal rental plans – will sales of key household equipment go the same way, with the manufacturer then having easy access to its own products at end of life to harvest those key raw materials?

After a shaky start it is clear that Europe is serious about this transition and there will be opportunities for those who embrace this concept and get ahead of the game.