COHESION POLICY SUPPORT FOR THE CIRCULAR ECONOMY

What is the c ircular economy?The circular economy is a new way of thinking about our growth model in the face of global competition for resources and the environmental impact of their use.

To combat this, Europe wants to make the transition to a stronger and greener economy, where resources are used in a more sustainable way. The circular economy aims to ‘close the loop’ of product lifecycles by keeping resources within the economy, which leads to better use of raw materials, products and waste.

The European Commission has recently adopted a new Circular Economy Package. This establishes a long-term approach to promote waste prevention, increase recycling and reuse, and reduce landfilling and incineration. It also sets out measures to help businesses, citizens and public authorities benefit from this transition.

The circular economy contributes to meeting the EU’s envi-ronmental and climate objectives. It is also a stimulus to local and regional development. Waste prevention, eco-design and similar measures create savings, increase turnover and create local jobs, for instance in the reuse, re-manufacturing, repair and product innovation sectors.

Cohesion policy support for 2014-2020EU cohesion policy is key to making the circular economy a reality. In the new investment frame-work for 2014-2020, there is significant funding for waste management. There is also support for the circular economy in innovation, SME competitiveness, resource efficiency and low-carbon investments. For these, we have resources totalling €150 billion. They leverage additional private funding and are complemented by other EU funding sources, such as Horizon 2020, LIFE and COSME.

What is the EU cohesion policy?Cohesion policy provides more than €350 billion over the 2014-2020 period. It supports job creation, business competitiveness, economic growth and sustainable development, and comprises the European Regional Devel-opment Fund (ERDF), the Cohesion Fund (CF) and the European Social Fund (ESF). All EU Member States and regions profit from these, with the bulk concentrated on less developed ones.

Cohesion policy supports Europe’s objectives for smart, sustainable and inclusive growth, through investments in 11 priority areas. Several of these areas have a direct link to circular economy, as explained in this publication.

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Cohesion Policy

These investments contribute to:

▶ more recycling, ▶ improved waste management, ▶ resource and energy efficiency, ▶ strengthening the bio-economy, ▶ novel solutions in product design, ▶ new business models, ▶ and the creation of green jobs.

In addition, resource efficiency becomes part of other cohesion policy priorities, following a hori-zontal commitment to sustainable development. This means that investments in employment will contribute to the creation of ‘green jobs’. Infrastructure projects must take due account of their environmental impact.

Cohesion policy is not only about money. It offers a policy framework for integrated regional devel-opment focusing on the particular strengths of each region to deliver the circular economy. It works in partnership with actors on the ground and follows a holistic approach. It helps regional authorities with capacity-building and increases cross-border cooperation.

Where do the investments go?Cohesion policy investments are geared towards local needs and opportunities. In villages, towns and regions, they make a difference to recycling, waste-free production as well as better use of scarce water resources.

We have €5.5 billion for improved waste management and focus on waste prevention, reuse and recycling are the preferred waste treatment options in the EU. We also invest in basic waste treatment infrastructure in less developed regions. This means 5.9 million tonnes/year of additional waste recycling capacity in Europe.

Turning waste into a resource is an essential part of moving towards a circular economy. Cohesion policy invests €2.3 billion in environmentally-friendly production processes and resource

Closing the waste cycle in the Slovenian capitalWith the help of EU funds, Slovenia is reaching its recycling targets and the citizens of Ljubljana have bet-ter, more sustainable waste man-agement. Since joining the EU, the Slovenian capital has boosted sep-arate collection and recycling, and reduced the amount of waste sent to landfill by 59%. It also invested in prevention and reuse. Ljubljana now generates 41% less waste per capita than the European average

and decided not to build two new incinerators as originally planned. One of the key elements of the integrated waste system is the Ljubljana Regional Waste Man-agement Centre. This EU-funded project started as a facility for 17 municipalities. Later, 20 more municipalities joined, renounc-ing the need for an additional treatment plant.

efficiency in SMEs. For instance, the UK’s National Industrial Symbiosis Programme brings busi-nesses around the table to find out how one industry’s waste products can be another’s raw mate-rial. Such industrial symbiosis keeps resources circulating in the economy, creating added value and boosting innovation. After receiving cohesion policy support, the programme is now being replicated across Europe and beyond.

The Circular Economy Package also promotes water reuse. Some regions in Southern Europe, where water is scarce, already recycle their treated wastewater for park irrigation, street cleaning or to replenish groundwater reserves. But the potential is much larger, also in other parts of Europe. Cohesion policy can support this through its €15 billion investment in the water sector during the 2014-2020 period.

The circular economy starts at the beginning of a product’s life. Product design should make prod-ucts more durable or easier to repair or recycle. This saves resources, promotes innovation and provides consumers with products that are less costly to use. Cohesion policy invests in new and better products.

Important research and innovation funding opportunities are available too. The circular econ-omy is a priority in the Smart Specialisation Strategies that steer these investments. Regions from all Member States identified priorities that support transition towards a circular economy, depend-ing on their specific strengths and capacities. These include the bio-economy, composite materials technologies, and innovative production processes. The Commission supports these regions in the implementation of their strategies. For instance, the Smart Specialisation Platform helps them to cooperate with other regions along value chains, also on specific topics such as agri-food and industrial modernisation.

Some cohesion policy projects take the shape of platforms or networks. One of those platforms in Ireland helped SMEs find better ways of managing their waste and purchasing costs. The project, SMILE Resource Exchange, created partnerships between public bodies, social enterprises and the private sector. It also raised awareness about reuse and transforming waste into better quality materials (‘upcycling’).

Creating a new biodegradable fabricA Czech company developed a unique biodegrada-ble material and increased its productivity by a factor of four. The material, developed by STAVOS Chlumec n. Cidl and the University of Hradec Králové, can be used in the manufacture of flowerpots that make it much

easier to plant trees without destroying their root sys-tems or burdening the environment as they decompose in the soil. EU funds co-invested in a project to upscale this innovation to the production stage.

Supporting waste-free design across North-West EuropeCradle to Cradle is a design approach for products and systems, where materials circulate in a ‘waste-free metabolism’. A transnational project developed instru-ments and guidelines to help implement Cradle to Cradle principles in product manufacturing, the construction of large

buildings and the organisation of living and working areas. It received €4.5 mil-lion of support from the North-West Eu-rope Interreg Programme and involved 11 European public authorities, knowl-edge institutions, NGOs and business actors.

A strategic pol icy approach going beyond fundingRegions can use the available resources in an optimal way only if there is a strategic approach. As a pre-condition for funding, the planned cohesion policy investments in waste need to follow the waste management plans. National or regional strategies for smart specialisation underpin invest-ments in innovation. The Commission provides technical assistance to Member States, regions and cities, to prepare and carry out their strategies. It also addresses the obstacles to a circular economy on the ground, by improving administrative capacity in local and regional authorities.

In addition to targeted actions in each phase of the value chain, it is necessary to create the condi-tions under which a circular economy can flourish and resources can be mobilised. This includes the training and reinforcement of a qualified workforce with specific and sometimes new skills. Private sources of financing need to complement public investments, to scale up improved technologies and processes, develop infrastructure and increase cooperation between actors in the value chain. SMEs, including social enterprises, face specific challenges and therefore receive priority support.

Cross-border and transnational cooperation programmes are crucial to foster interregional coop-eration on circular economy activities. Such projects promote industrial symbiosis, awareness-rais-ing and the exchange of knowledge and best practices. The circular economy is also one of the 12 themes of the Urban Agenda for the EU. Cities will work with the Commission, Member States and other partners on waste, resource efficiency and the sharing economy.

How can you get support?The cohesion policy programmes adopted in 2014 and 2015 specify the funding opportunities for all Mem-ber States and regions until 2020. Member States run the programmes, via Managing Authorities. These give information on the programmes, select projects and assist implementation. Visit the InfoRegio website to read about the programmes and find useful contact points.

Driving the change via Green Public ProcurementPublic procurement, which accounts for approximately 14% of European con-sumption, can play a key role in the cir-cular economy. The Commission encour-ages this role through its actions on Green Public Procurement (GPP), which helps to stimulate a critical mass of demand for more sustainable goods and services. The use of GPP in EU cohesion policy funding can be a good way to inte-grate resource efficiency and sustainable development across all priorities.

Further reading

InfoRegio: ec.europa.eu/regional_policy/EU Action Plan for the Circular Economy: eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52015DC0614

Towards a circular economy: The European Commission: ec.europa.eu/priorities/jobs-growth-investment/circular-economy/index_en.htm

Open Data Platform: cohesiondata.ec.europa.eu/

Project examples: ec.europa.eu/regional_policy/en/projects/

GPP criteria and good practices: ec.europa.eu/environment/gpp/index_en.htm