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New Finance Platform Aims to Scale Up Circular Economy in Europe
January 30, 2017
One year after adopting an ambitious Circular Economy Package, the European Commission has partnered with the European Investment Bank (EIB) to establish the Circular Economy Finance Support Platform, to help bring investors and innovators together and keep up the momentum in the transition to a circular economy.
“Building a circular economy for Europe is a key priority for this Commission. We have made good progress and are planning new initiatives in 2017. We are closing the loop of design, production, consumption and waste management, thereby creating a circular and competitive Europe,” said First Vice-President Frans Timmermans.
The new platform is expected to enhance the link between existing instruments, such as the European Fund for Strategic Investments (EFSI) and the InnovFin — the EU Finance for Innovators initiative backed by Horizon 2020, and potentially develop new financial instruments for circular economy projects. It will bring together the Commission, the EIB, National Promotional Banks, institutional investors and other stakeholders, raising awareness of circular investment opportunities and promoting best practices amongst potential promoters, analyzing projects and their financial needs, and providing advice on structuring and bankability.
“This new platform is an excellent tool to raise awareness of circular economy projects’ immense business potential and, consequently, draw in more funding for their financing. The circular economy is an important element to modernize the European economy and we are on track to deliver this sustainable change,” said Vice-President Jyrki Katainen, responsible for jobs, growth, investment and competitiveness.
EIB Vice President Jonathan Taylor, responsible for financing environment, climate action and circular economy, added: “The EIB is pleased to join forces with the European Commission and use our combined financial firepower and expertise to make our economies more circular. As the world’s largest multilateral climate action lender with over €19 billion of dedicated financing last year, we see the circular economy as key to reversing the course of climate change, making more sustainable use of our planet’s scarce resources, and contributing to Europe’s growth.
“To accelerate this transition, we will continue to advise and invest increasingly in innovative circular business models and new technologies as well as in more traditional resource efficiency projects. The new Circular Economy Finance Support Platform will be an essential tool to boost awareness and financing of circular economy projects.”
In addition to announcing the new Circular Economy Finance Support Platform, the Commission also issued guidance to Member States on converting waste to energy and proposed a targeted improvement of legislation on certain hazardous substances in electrical and electronic equipment.
The Commission Communication released on Friday concerning the role of waste-to-energy processes in the circular economy aims to maximize the benefits of this small but innovative part of the national energy mix. It provides guidance for Member States to achieve the right balance of waste-to-energy capacity, highlighting the role of the waste hierarchy which ranks waste management options according to their sustainability and gives top priority to preventing and recycling waste. It helps optimize their contribution to the Energy Union and exploit the opportunities for cross-border partnerships where appropriate and in line with the Commission’s environmental goals.
The Commission also announced the adoption of a package containing a proposal to update legislation to restrict the use of certain hazardous substances in electrical and electronic equipment (RoHS Directive). The proposal promotes substitution of hazardous materials to make the recycling of components more profitable. The proposed changes will further facilitate secondhand market operations (e.g. reselling) and repair of electrical and electronic equipment. It is estimated that the measures will prevent more than 3000 tons of hazardous waste per year in the EU, and enable savings of energy and raw materials. In the health sector alone, an estimated €170 million in healthcare costs could be saved.
The Commission also took a moment to report on progress made over the past year, highlighting key measures taken in areas such as waste, eco-design, food waste, organic fertilizers, guarantees for consumer goods, and innovation and investment. Circular economy principles have been gradually integrated into industrial best practices, 'green' public procurement, the use of cohesion policy funds, and through new initiatives in the construction and water sectors.
To make the transition to a circular economy happen on the ground, the Commission has called on the European Parliament and Council to proceed with the adoption of waste legislation proposals, in line with the Joint Declaration on the EU’s legislative priorities for 2017. In the coming year, the Commission will work to deliver further on the Circular Economy Action Plan, with a strategy on plastics, a monitoring framework for the circular economy and a proposal for promoting water re-use.