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1 July 2021

Philippa Nuttall Jones

Opinion: Why net-zero policies need to be circular

The EU's 'Fit for 55' package is an opportunity to make climate action more effective by bringing clean energy and circular economy policies closer together, to reduce both greenhouse gas emissions and waste.

“You can’t see it because you don’t have the right eyes. There’s stuff going to waste right in front of you. Always. We’re like swimming in wasted stuff.”  Extract from Unsheltered by Barbara Kingsolver.

In two weeks, the European Commission will publish its ‘Fit for 55’ climate and energy package, setting out how the EU can reduce its emissions by 55%, compared with 1990, by 2030. The emphasis in this packet of legislative proposals will be on reducing emissions from the production and consumption of energy, largely through increasing renewables and greater efficiency.

There is, however, a growing awareness that clean energy alone will not be enough to meet the EU’s climate goals. Joining the dots between the energy transition and the circular economy would go a long way to boosting emissions reductions, and ensure products and processes are fit for purpose in a carbon-constrained world.

Employees work at the Envision battery manufacturing plant for the Nissan Leaf car at Nissan’s plant in Sunderland, northeast England in July, 2021. Japanese auto giant Nissan plans to build the UK’s first car battery “gigafactory”. (Photo by OLI SCARFF/AFP via Getty Images)

Efforts to tackle the climate crisis through transitioning to renewable energy and greater energy efficiency can only address 55% of global emissions, found a 2019 report from the Ellen McArthur Foundation, whose raison d’être is promoting the circular economy. The remaining 45% of emissions come from products we use every day.

Applying circular economy strategies – “designing out waste and pollution, keeping products and materials in use, and regenerating natural systems” – to the cement, aluminium, steel, plastics and food industries can eliminate almost half of these emissions, says the Foundation. This reduction would result in emissions savings of 9.3 billion tonnes of CO2 equivalent by 2050 – equivalent to cutting emissions from all transport everywhere to zero, it says.

In the EU, direct emissions from materials such as iron and steel, cement and non-metallic minerals, basic chemicals, aluminium, and pulp and paper account for around 16% of net annual greenhouse gas emissions. “Given the life cycle of assets within these industries, the EU has just one investment cycle to shift production processes to achieve domestic climate neutrality by 2050,” underlines a recent report from think tanks Agora Energiewende and CLG Europe.

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In industry, this transformation to the circular economy can be achieved by “substantially increasing the use rates of assets, such as buildings and vehicles, and recycling the materials used to make them", says the Ellen McArthur Foundation. “This reduces the demand for virgin steel, aluminium, cement and plastics, and the emissions associated with their production.”

These findings are as valid for an electric vehicle (EV) as for a diesel car, and as true for a wind turbine as for a cooling tower in a power station.

Recent analysis by the German economic research institute DIW came to a similar conclusion. It found that producing and disposing of one tonne of plastic on average causes about five tonnes of CO2 emissions. "A whole range of political interventions are needed to fully tap into the emissions reduction potential of a circular economy," DIW concluded, adding that climate targets can only be achieved if circular concepts are strengthened for all base materials.

No silver bullets

The concept of the circular economy is gaining traction in Europe. Indeed, in March 2020, the EU adopted a Circular Economy Action Plan as part of its Green Deal, insisting this was “a prerequisite” to achieving its 2050 climate neutrality target. However, historically the idea has been seen more as a waste reduction tool than a key tenet of climate action.

“The circular economy is a key solution to climate change,” says Carmen Valache-Altinel from the Ellen MacArthur Foundation. “It isn’t a silver bullet, but it can deliver significant reductions of industrial emissions, and emissions from agriculture and land use. We need to pay much more attention to how materials are used and how products are designed so they are circular from the outset. On the policy front, more needs to be done to bring the circular economy and climate agendas together.”

On the policy front, more needs to be done to bring the circular economy and climate agendas together. Carmen Valache-Altine, Ellen MacArthur Foundation

The 'Fit for 55' package “includes several important pieces of EU climate and energy legislation”, acknowledges Doreen Fedrigo, industrial transformation policy coordinator at Climate Action Network Europe, a not-for-profit. “But it needs to be complemented with other measures and policies to drive companies and sectors to reduce their climate impacts.” She cites upcoming Commission proposals on a sustainable product initiative and revisions to the Energy Performance of Buildings Directive and the Industrial Emissions Directive as having the potential to do this.

These legislative changes can “help drive the market pull for climate neutral and clean products, and set out climate action, resources, circularity and other issues at the level of individual installations”. To ensure this outcome becomes reality and clearer synergies are made between climate action and the circular economy, Fedrigo suggests the Commission could see them as “Fit for 55 – the sequel”.

Piotr Barczak from the European Environmental Bureau (EEB), a Brussels-based NGO, agrees “EU policies act too much in isolation”. He adds: “They develop in their respective fields, but we need a cleverer transition where all policies are focused on quickly phasing out fossil sources and, at the same time, ensuring that whatever is put on the market has a route, technologically and financially, for recycling after its end-of-life.”

Product passports

His colleague at the EEB, Stephane Arditi, highlights the potential for the circular economy to address climate change by questioning the embodied emissions in the natural resources we use. Batteries, key to so much of the energy transition, both in EVs and as storage, have the potential to become an environmental nightmare.

Arditi wants to see “carbon footprinting” for products to understand how much carbon they emit and absorb during their manufacture. At the moment, climate concerns tend to be focused on emissions linked to the energy in use stage, but the carbon footprinting of batteries could create a precedent to also consider emissions from their production. He also questions the assumption that digitalisation will speed up the clean energy transition given "the embodied emissions in ICT manufacturing largely remain a blind spot".

Greater focus on circularity and more transparency on embodied emissions, through product passports or labelling, could offer clearer answers to such questions.

Ultimately, climate action and the clean energy transition should be about so much more than swapping a diesel car for an EV. We should not just be looking at how we power our homes and offices, but also at whether the materials and final products used to make our homes more energy efficient are as sustainable as possible, and produce as few emissions and the least amount of waste at every stage of their life.

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