OVERVIEW OF THE NEW EU CIRCULAR ECONOMY ACTION PLAN (CEAP)

The circular economy is a model of production and consumption that emphasizes sharing, renting, reusing, repairing, refurbishing, and recycling existing materials and products for as long as possible. This approach extends the life cycle of products, thereby minimizing waste. When a product reaches the end of its life, its materials are retained within the economy, allowing them to be reused multiple times and create further value. This contrasts with the current linear economic model, where materials are consumed and discarded.

The EU's new Circular Economy Action Plan (CEAP) aims to create a cleaner and more competitive Europe. The CEAP is a comprehensive set of initiatives designed to reduce pressure on natural resources by transforming product design, production, and consumption patterns to achieve zero waste. These initiatives cover various materials and goods, including packaging, technology, media, and textiles.

Adopted by the European Commission in March 2020, the CEAP is a core component of the European Green Deal, Europe’s new agenda for sustainable economic growth. The EU's transition to a circular economy will alleviate pressure on natural resources while fostering sustainable growth and job creation. This transition is also essential for achieving the EU's target of climate neutrality by 2050.

In the EU, the circular economy is recognized as more than just a waste management issue. Initially, a Legislative Proposal on Waste was anticipated in 2014. However, the European Commission suspended this proposal in favor of a more holistic approach with the Circular Economy Package introduced in 2015. This package addresses the entire process, from production and consumption to the market for secondary raw materials.

Subsequently, the EU launched the Circular Economy Action Plan (CEAP), sometimes referred to as the 'new CEAP,' along with the Ecodesign Working Plan 2016-2019. These plans set the foundation for Europe’s ongoing transition to a sustainable and circular economy.

Source: Parliamentary News (2021) “Circular economy: defining importance and benefits”

Implementing the Circular Economy: Key Stages and Priority Areas

These plans clearly indicate the need to approach circular economy implementation in four stages of the product life cycle:

1. Production: Special attention is paid to the design stage to ensure products are durable, repairable, and recyclable.
2. Consumption: Encouraging sustainable consumption patterns.
3. Waste Management: Efficiently managing waste to minimize environmental impact.
4. Turning Waste Back into Resources: Converting waste into secondary raw materials.

At the same time, six priority areas for implementing the circular economy have been identified:

1. Plastics
2. Food waste
3. Critical raw materials
4. Construction and demolition
5. Biomass fuel
6. Bio-based products

Regarding plastic waste, on March 27, 2019, the European Parliament agreed on ambitious measures to address marine waste from the ten most common single-use plastic products found on European beaches, as well as discarded fishing gear and biodegradable plastics.

To date, the EU has issued numerous documents on the circular economy that can be categorized into the following major policy groups:

1. Standard Designs and Rules: Continue to apply standard designs and circular economy application rules at the EU level, such as clearly defining the responsibilities of stakeholders in the circular economy cycle and establishing and disseminating EU standards for product durability, repairability, and recyclability.
2. Circular Economy Procurement: Expanding circular economy procurement at the EU and member country levels by prioritizing the purchase of circular products, regulating procurement standards through thresholds for recycled content percentage, reusability, and eco-efficiency, and expanding public procurement to create a circular product market.
3. Tax Incentives: Implementing tax changes for circular economy products, such as reducing VAT for circular economy products and increasing VAT for linear economy products, and reducing corporate tax for companies participating in the circular economy.
4. Liberalization of the Waste Business: Reducing legal barriers on the trade and use of priority waste ("Green listed waste").
5. Development of Circular Trading Platforms: Facilitating the development of circular trading platforms.
6. Eco-Industrial Parks: Establishing eco-industrial parks.
7. Promotional Campaigns: Launching campaigns to promote and market the circular economy.
8. Global Material Flow Accounting Database: Setting up a database to track material flows globally.

Purpose of CEAP

The Circular Economy Action Plan (CEAP) aims to:

• Make sustainable products the norm in the EU.
• Empower consumers and public buyers in the EU.
• Focus on the most resource-intensive and highly circular potential sectors, including plastic packaging and textiles.
• Ensure reduced waste.
• Promote circular economy initiatives in all regions and cities.
• Lead global efforts for a circular economy.

The first plan has led to several important steps towards developing a resource-efficient economy, including the Single-Use Plastics Directive and mandatory Ecodesign requirements for energy-related products such as household items, motors, and power supplies. However, many of the measures proposed in the first CEAP remain voluntary, with some being incorporated into official law in early 2019.

Regarding actions related to SMEs in developing countries, many involve reviewing existing laws, assessing the impact of the transition to a circular economy, and holding public consultations. The Commission also proposed three new laws in 2021, which still need to be considered before becoming law.

Summary of relevant actions by the European Commission to implement CEAP

Source: Profundo Summary Based on European Commission References on CEAP Implementation

Vu Huy Hung

Department of Information and Trade Promotion – VIOIT