Good Practice
Eco-Innovation Observatory – Circular Economy Report

The Eco-Innovation Observatory (EIO) is EU-funded and acts as a platform for the structured collection and analysis of an extensive range of eco-innovation information, gathered from across the European Union, providing a solid decision-making basis for policy development. It defines eco-innovation as “any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle.”

In its recent report Policies and Practices for Eco-Innovation and Circular Economy Transition (November 2016) the EIO traces how the circular economy concept has evolved in EU member states, looks at the challenges of mainstreaming eco-innovative measures, and how countries’ comparative eco-innovation policies and practices are measured. Cross-country comparisons are made of circular economy and innovation measures in the EU and globally, using eco-innovation scoreboards.

The report is a comprehensive account of the strategies needed to cope with the challenges of producing a resource-efficient society. It is segmented by materials, practices and country and gives 32 best-practice examples from EU member states on how the circular economy is being implemented at EU and national levels.

It finds that while eco-innovative policy is being given increasing prioritisation across Europe, current economic indicators do not fully measure the impact of circular economy approaches. And it finds that performances (described more fully in the report) across EU countries vary widely (Denmark scored by far highest of all EU countries, with an aggregate score of 167; Finland, 140; Ireland, 134; Germany, 129; with Sweden, Luxembourg and France grouped into “eco-innovation leading” countries, down to Romania, 82 and Bulgaria, 49).

It also finds that while the benefits of a circular economy transition are increasingly recognised there are many barriers to process adoption, including:  insufficient investment, lack of skills, and consumer and business acceptance of potentially more efficient service-oriented business models, like leasing rather than owning, and performance-based payment models. Importantly for us, it finds limited sustainable public procurement incentives in most public agencies (i.e. Green Public Procurement).

The EC believes green public procurement can be used to drive the circular economy in the EU – that it can make a significant impact owing to its purchasing power of EUR 2 trillion. “By buying environmentally friendly goods and services, EU governments can develop a sustainable, low-carbon and resource-efficient circular economy.” But it says “as GPP is a voluntary policy, making it a reality depends on the commitment of Member States and individual public authorities.”

The report suggests that government policies should secure framework conditions that favour different types of eco-innovation that play a role for future citizens and businesses and “induce behavioural and lifestyle changes that are more sustainable than existing solutions. A mix of policy measures will be required to support circular economy at national and local levels by introducing policy measures that regulate resource efficiency, waste reduction, recycling, re-use and remanufacturing and create demand for sustainably designed products as well as resource saving services.”

It suggests routine practices need to be transformed into new practices based on sharing, reusing, repairing, as well as remanufacturing. In addition, in order to address barriers at the local level, national and local governments can deploy a range of policy measures. These include, among others: regulatory instruments, such as regulations on recycling, producer responsibilities, eco-design, mandatory targets, codes, standards, and certification for products; economic instruments, including fiscal and financial incentives, direct funding, and public procurement; research, development and deployment support measures, such as grants for R&D and piloting activities, R&D infrastructure, innovation vouchers, supporting innovation incubation, and R&D personnel; information, education and networking support measures, for example, advising, training, offering direct support in activities to SMEs, customers, technology adopters, promotion of networking, providing information, and supporting public private partnerships, and voluntary measures, such as performance labels and guarantees for products and services, or voluntary agreements and commitments.

However, it remarks, the application of these measures in the context of circular economy development in Member States is rather selective.

Clearly the current linear system of production and consumption cannot be sustained, which the report describes as: “sources are extracted, processed, used and disposed as waste. At the end of a product’s lifecycle wastes are typically incinerated or landfilled … Such a linear economic model is able to persist as long as resources are abundant within a world of infinite needs. However, the global demand for resources is still increasing and both non-renewables and also renewables are limited. In the long term, a linear economic model must reach its limits (Wilts 2016).”

Public procurement will need to pay more heed to the circular economy in terms of the tender process, and the contract lifecycle, and the impact on the supply chain. In an interesting article we published on Spend Matters UK  “Alis Sindbjerg Hemmingsen on Procurement’s Role in the Circular Economy,” a leading and widely recognised expert in the field of responsible procurement explains the importance for procurement people: moving from supplier partnerships with a cost orientation to a focus on joint collaboration and innovation. Procurement can lead that to drive “circular thinking” through the supply chain in an effective way — “if we don’t do it, who else will?” she says.

You can download the full report at eco-innovation.eu

First Voice

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