The Circular City
Lessons from Europe
Factsheet for Policy Lab Netherlands
Introduction
The circular economy, as defined by the Ellen McArthur Foundation, refers to an industrial
economy that is restorative by intention, aims to rely on renewable energy, minimises the use
of toxic chemicals, and eradicates waste through careful design.
Promoting the transition to a sustainable, circular economy is one of the priorities of the 2012
Coalition Agreement of the Dutch Government. The Parliamentary paper “Groene Groei”
(green growth) positions the transition towards a circular economy as an important move
towards sustainability policies. In Spring 2015, the impact of the “Groene Groei” paper will be
evaluated for the first time. Several Dutch Ministries have started to explore the topic and to
develop strategies to substantiate the Coalition’s objectives. The Ministry of Economic Affairs
and of Infrastructure and the Environment are developing programmes to promote a more
circular economy, including the so called Green Deals. The Directorate-General for Housing
and Construction of the Ministry of Interior and Kingdom Relations focuses on the circular
economy in the built environment, including priorities such as innovation within the
construction industry, energy efficiency in the built environment and the circular city.
So far, the international dimension has been largely ignored in the policy development of the
Ministry of Interior and Kingdom Relations. The EUKN Policy Lab on the Circular Economy is
meant to strengthen the international perspective: how and what can the Dutch government
learn from policies and practices in other European countries and cities?
This factsheet provides background information meant for the Dutch Policy Lab on the
Circular City. The factsheet starts by defining the circular economy and the role of
governments at various levels. Subsequently, the European policies that support the transition
to the circular economy are outlined. In the remainder of the factsheet, examples at the
national and the local level are presented. During the Policy Lab, two international experts will
present their views on the transition in their country (Denmark and France).
The circular economy and the role of government
The transition to a circular economy can be understood as the implementation of different
business models and technologies in all sectors of production, marketing, consumption and
waste management. Companies are the driving force in the shift towards the circular
economy. However, governmental support is indispensable for an transition at larger scale.
Governments may play an important role in tackling barriers for the development of the
circular economy with regard to: (1) lack of information and understanding of the circular
economy by policy makers, businesses and citizens, (2) inconsistent or impeding regulations,
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(3) lack of finance and funding, and (4) creating a level playing field for companies that
already started with implementing a circular economy business model.1
There is no blueprint for government policy to promote a circular economy. However,
important elements of a government policy to accelerate the transition to a circular economy
may be: understanding the urgency of the step towards the circular economy, to lead by
example, to assess the local context on the basis of the circular economy principles, to create
a comprehensive vision or strategy, to engage stakeholders and start a dialogue, to choose
the appropriate instruments and to start initiatives, to monitor progress, to adjust the roadmap,
and to implement on a larger scale. Instruments that governments can use to encourage a
circular economy are: laws and regulation; monetary incentives, including subsidies and fiscal
measures; utilising their procurement power, partnerships and promoting cooperation
between companies.2
The transition to a circular economy requires cooperation and coordination between all
concerned, horizontally and vertically. There is a need to identify priority areas for action at
different governance levels. Some local governments already put forward initiatives to
promote the circular economy. Setting a coherent framework to support the civic economy
from the very beginning of the product life cycle is a key task of the EU and national
governments. it is important to recognise the untapped potential of cities, as large part of the
European population lives in cities, industries are concentrated in urban areas and cities
contribute significantly to the energy consumption and carbon emissions of Europe. The
following sections successively examine developments at European, national and local levels.
Policies and initiatives at EU-level
According to the European Commission “moving towards a more circular economy is
essential to deliver the resource efficiency agenda established under the Europe 2020
Strategy for smart, sustainable and inclusive growth” (EC 2014a).Turning Europe into a more
circular economy means for the Commission:
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boosting recycling and preventing the loss of valuable materials;
creating jobs and economic growth;
showing how new business models, eco-design and industrial symbiosis can move us
towards zero-waste;
reducing greenhouse emissions and environmental impacts.
There are several European policies, initiatives and measures that support some aspects of
the transition to a circular economy, including: Implementation of the Europe 2020 Strategy
and the greening of the European Semester; implementation of the Roadmap to a Resource
Efficient Europe, the 7th Environmental Action Programme that will be guiding European
environment policy until 2020; the EU contribution to the drafting of global Sustainable
Development Goals for the post 2015 development agenda; and a bio-economy strategy and
action plan of the Commission for a sustainable bio-economy in Europe.3
“Governments going circular.” A global scan by De Groene Zaak, Feb. 2015. www.govsgocircular.com
Ibid
3 EC (2014) Scoping study to identify potential circular economy actions, priority sectors, material flows
and value chains. Study prepared for the European Commission, DG Environment.
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To deliver these EU policies, the European Parliament has agreed in November 2013 that at
least 20% of the entire European Union budget for 2014‐2020 - thus €180 billion − will be
spent on climate change-related projects and policies. To achieve this increase, mitigation
and adaptation actions will be integrated into all major EU spending programmes, in particular
cohesion policy, regional development, energy, transport, research and innovation and the
Common Agricultural Policy. 4
July 2014, the Commission published the Circular Economy Package including overarching
communication “Towards a circular economy: A zero waste programme for Europe”. However,
in December 2014 the European Commission decided to withdraw this package from the
2015 Work Package, to replace it by “a more ambitious” proposal at the end of 2015.
The EU policy and Commission proposals have been the subject of criticism by some parties.
To date, the EU (and national) policies “have focused primarily on recycling, “while various
‘inner circles’ or loops such as reuse, repair, refurbishment, remanufacturing and upgrading
have received limited policy attention” (EC 2014b). In addition, there are also EU policies
which can act as barriers to the transition to a circular economy.5
At European level, the local challenges to accelerate the circular economy could receive
attention within the context of the evolving EU Urban Agenda. One of the outcomes of the
consultation on the EU urban agenda is that ‘green cities’ should be one of the priorities of this
agenda, and especially the urban dimension of EU 2020 objectives of sustainable growth and
priorities of the 7th environmental action plan.6 The topic of the circular economy is linked to
the Europe 2020 Strategy by the Commission itself and it is a challenge that requires
coordination and harmonisation between Member States, thus a truly European challenge.
Thus, the circular economy could become a priority on the EU urban agenda, but this would
require in any case the identification of priority areas for targeted action at the urban level
within the broad theme of accelerating the circular economy.
Policies and initiatives in some Member States
This section focuses on the national level of governance in some EU Member States. What
are the ambitions of other countries an how have national governments in these countries
made a start with the circular economy? We will focus on policy strategies in Denmark and
France; cases from these countries will be presented during the Policy Lab on the circular city.
In addition, we will briefly examine developments in two other EU Member States, Germany
and and the United Kingdom. Germany is one of the countries also recognized as one of the
frontrunners in promoting the circular economy and the United Kingdom has recently finalised
a large report on what the role of the government should be in promoting the circular
economy.
Denmark
Denmark has won the first prize at the awards for circular economy cities and regions. With
5.6 million inhabitants, Denmark has been at the vanguard of nations adopting circular
economy principles. The government of Denmark has shown its commitment to securing a
4
http://ec.europa.eu/clima/policies/budget/index_en.htm
EC (2014) Scoping study to identify potential circular economy actions, priority sectors, material flows and value
chains. Study prepared for the European Commission, DG Environment.
6
EC (2015) Results of the public consultation on the key features of an EU urban agenda. Commission Staff Working
Document, SWD (2015) 109 final.
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sustainable future for its citizens by launching a strategic program: Denmark without Waste.
Aimed at transforming policies, businesses and society, the program has several initiatives in
place to encourage green business models, green technology, innovation funding, better
regulation, favourable waste policies, as well as improved education and training. With
ambitious targets such as recycling 50 percent of all household waste by 2022 and becoming
independent of fossil fuels by 2015, Denmark is hoping to set the standard amongst nations in
becoming a green and resource-efficient economy.
Denmark’s resource strategy, passed last year in parliament, treats all waste as a resource
that should either be recycled or reused. The Danish government is aiming at recycling 50%
of all household waste by 2022. Today, only 23% is recycled and the rest incinerated. The
Danish Ministry for Growth set up the Green Transition Fund, focused on creating industrial
symbiosis where one company’s waste is another company’s resource. This is a good
example of a circular economy practice. But while the government aims are high, it’s up to the
country’s 97 municipalities to realise the national target, while precisely the municipalities
have invested large sums in incineration plants. A new law bans the construction of new
incineration plants. However, Denmark sets a higher standard, by its objective that all
components of a product can be recycled and reused in a new production process.
Copenhagen Case
These national initiatives are supplemented by initiatives at a regional level. Copenhagen is
widely recognised as a leader in the global green economy. The Copenhagen region accounts
for almost 40% of Denmark’s output and has enjoyed long-term stable growth. At a national
level, Danish GDP per capita is ranked among the top 10 countries in the world. At the same
time, the city’s growth has been delivered while improving environmental performance and
transitioning to a low-carbon economy. The city of Copenhagen plans to become the first
carbon-neutral capital by 20257. The plan outlines cross-cutting targets and an overall
roadmap for making Copenhagen the first carbon neutral capital, including targets on
renovation of buildings, new building requirements, and separation of plastics from waste-toenergy incineration. In 2011, Copenhagen had already reduced CO2 emissions by 21 percent
compared to 2005.
The city of Copenhagen also developed the Resource and Waste Management Plan 2018 8.
Through cooperation with business and its citizens, clear targets are set for handling waste
and an awareness shift from a linear economy to a circular economy. This is partly done in
cooperation with project Mainstream. Project MainStream is a multi-industry, CEO-led global
initiative to accelerate business-driven innovation and to help to scale the circular economy.
MainStream aims to fast-track this transition by taking collaboration to a new level, focussing
on stalemates that individual organisations cannot resolve, assisting companies to work with
their own partners and supply chains. The current flagship initiative in Copenhagen on the
“circular economy”, is a sequel to a large-scale multi-city collaboration on “Plastic Zero9” (EU
financed project). The CPH-MainStream initiative takes ambitious targets on separation of
plastics from incineration as a starting point, focusing work on key strategic materials flows in
Copenhagen that play a critical role in existing plans and targets and which, at the same time,
hold promise for replication and scaling across other materials flows. Incineration of plastics
accounts for about 8% of the CO2 emissions that need to be reduced by 2025, following the
7
http://kk.sites.itera.dk/apps/kk_pub2/pdf/983_jkP0ekKMyD.pdf
http://kk.sites.itera.dk/apps/kk_pub2/pdf/1184_LfcAsFCDJS.pdf
9 http://3gf.dk/en/~/media/3gf/Documents/3GF2014/Concept%20Notes/Polymers%20and%20Packaging.pdf
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CPH climate plan. This is a very ambitious and challenging target that requires new solutions,
innovation and collaboration across local and global value chains, something the City of
Copenhagen is unable to achieve on its own. The MainStream initiative is founded on a
fundamental recognition of the many externalities, both positive and negative, involved in the
production, use, and recycling of plastic packaging materials within the fast-moving consumer
goods industry (FMCG). In particular, there is a massive coordination failure across global
value chains with respect to decisions about packaging materials and design, on the one
hand, and systems for collection, reuse and recycling of these materials in cities, on the other
hand. The city of Copenhagen is at the beginning of setting this new agenda.
France
France has put both economic and fiscal incentives in place that support the transition to a
circular economy. One of the activities regarding the circular economy is done through an
important economic incentive providing modulated fees under many Extended Producer
Responsibility (EPR) schemes. This is where fees paid by producers to the Producer
Responsibility Organisation (PRO) for managing waste from their products is varied according
to different eco-design related criteria. Other fiscal tools in place include the ‘Taxe Générale
sur les activités polluantes’ (General Tax on Polluting Activities) which is levied on polluting
activities in proportion to the level of pollution generated. A number of proposals are also
being discussed including an upstream tax for products that are not currently covered by
Extended Producer Responsibility systems (and therefore not recycled) to discourage
consumers from buying them and further encourage eco-design and an incentive based
pricing policy for waste collection (PAYT scheme). The national government of France is not a
frontrunner in the transition towards a circular economy at the moment, but the current
government is willing to take important steps and the momentum is certainly there. This was
one of main reasons for the launch of the Institut of Circular Economy in France.
French Case: Institut for Circular Economy
As part of the energy transition, a circular economy will be one of the four areas in which The
French Minister for Ecology, Sustainable Development and Energy, Ségolène Royal, will
concentrate future legislation on the energy transition on four areas, with the circular economy
is one of them. In France, the legislation on energy transition is almost ready to submit to
parliament.
An important organisation on the circular economy in France is the Institute for Circular
Economy (IEC), founded in 2013 by François-Michel Lambert from the French Green Party. It
promotes an industrial model that creates new from the old. He is glad that the new
government is considering the idea of a circular economy. The aim of the Institute for Circular
Economy is to establish contact with the Ministry of Ecology, Sustainable Development and
Energy and give policy advice on the circular economy. The ambition of the IEC is to ensure
that the current government will set and pass a bill in favour of the circular economy before
the end of the mandate of the current majority which will last until 2017. Furthermore they aim
to unite and involve all stakeholders of the circular economy to participate in collaborative
approach. They stimulate research, experimentation and concrete achievements on circular
economy targets and give advice on needed changes in legislation and regulation to boost the
circular economy.
The French Environmental Conference, organised every year at the highest political level,
made the circular economy a central theme for the development of national policies related to
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the smart and efficient use of resources, in line with the strategic guidelines of the European
Commission. In this context the French Environment and Energy Management Agency,
together with the Circular Economy Institute organized the first French Summit on Circular
Economy in order to review the main challenges and issues, present on-going initiatives and
open up new perspectives. This was held in Paris on June the 17th in 2014 with 900
participants.
Germany
Germany is in many ways ahead of many other European countries in terms of promoting the
circular economy and resource efficiency. An example is the landfill dumping ban, in place in
Germany since 2005, and Germany’s overall policies towards waste management. Germany
was the first European country to systematically confront solid waste problems, primarily
driven by concern that its solid waste disposal facilities were filling up and could not easily be
replaced. In June, 1991, the German Cabinet approved the “Ordinance on the Avoidance of
Packaging Waste” (VERPACKVO), which was the first of its kind in Europe.
In Germany 200,000 people are working in the circular economy and 15,000 facilities deal
with the waste economy. The main factor that puts Germany in a different position, besides its
highly-developed environmental consciousness, is that Germany emphasises and puts into
practice the polluter pays principle.
United Kingdom
The establishment of The Circular Economy Task Force is one of the signs that the circular
economy is becoming increasingly important in the UK. This is a government endorsed,
business led group convened by the Green Alliance. The Green Alliance is a charity and
independent think tank focused on ambitious leadership for the environment. The Task
Force's first report, ‘Resource resilient UK’10, identified the barriers to business becoming
more resilient, profitable and sustainable through better resource productivity. It’s second
report, ‘Wasted opportunities’, shows how addressing the UK’s broken recycling system can
be improved by making better initial design that also allow for more and better recycling
opportunities. The Task Force is continuing to research the policy solutions that would enable
businesses to make the necessary changes for a more circular economy, optimising the UK's
resource use.
Secondly, the UK parliament published the report ‘Growing a circular economy’11 in
November 2014. The Environmental Audit Committee examined the issues surrounding
building a circular economy. In this enquiry they examined a number of areas where
Government might focus more attention in order to enable companies to move towards a
more circular approach. A number of conclusions of the report will enable the UK to develop
new business models, know-how, and infrastructure for the circular economy. In order to do
so the government needs to assist the business actively to implement circular business
models. Which elements of the report will eventually lead to new regulations is still to be seen.
Please visit http://www.eukn.eu/events/policy-labs for all relevant research
documents, handbooks and other background information related to the Policy
Lab
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11
http://www.green-alliance.org.uk/page_816.php
http://www.publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/214/21402.htm
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