Since the 2007 subprime crisis, the global economy has undergone radical changes. One of the consequences of this crisis has been a significant increase in the level of unemployment and poverty. At the same time, the world is facing a major ecological crisis related to the emission of greenhouse gases which is disrupting the climate.
The solution to this dual problem: the circular economy, an innovative method for ensuring environmentally friendly economic growth.
The circular economy is a system of production, exchange and sharing that enables social progress, the preservation of natural capital and economic development. It is based on the principle of optimal use of resources and the creation of positive value loops. The final objective is to reduce waste produced by the economy as much as possible.
In order to propose a long-term strategy, what implentation measures could the EU adopt to facilitate an optimal transition to a circular economy?
Several funds available to develop the circular economy at the EU level
Since 2016, the European Union has adopted new rules on the circular economy. Legally binding, they are now part of the EU’s regulatory corpus and form the “circular economy package“. If the Union wants to be a leader in this field, it must offer Member States stimulating and facilitating tools. To do this, several funding programs currently promote the circular economy:
- Urban Innovative Actions (UIA): an initiative enabling urban authorities with more than 50,000 inhabitants to implement innovative solutions to address urban challenges. The themes of the 5th call for proposals have been announced. Among them: the circular economy. The detailed description of the themes will be announced in April 2019 and the launch of the call will be in September 2019.
- LIFE: programme for the environment and the fight against climate change. Six calls for proposals will open on April 4, 2019. For the 2021-2027 programming period, the Union plans to increase its budget by 25% to reach a total of €5.45 billion. In addition, transition to a circular economy will be emphasized.
- Horizon 2020: One of the ways to reduce waste produced by the economy is the development of innovative and technological processes. Thanks to the European Union’s Research Framework Programme, 257 projects in favour of a circular economy were financed for a total of €1.237 billion under the “Industrial Leadership” and “Societal Challenges” priorities over the period 2016-2018.
- European Structural and Investment Funds (ESFI): the implementation of the circular economy is supported by the EU’s cohesion policy, and is granted an allocation of 150 billion euros as part of the 2014-2020 investment programme. The associated financing programmes have fought for a better management of low-carbon waste, resources and investments.
Illustration of grants dedicated to the transition towards a circular economy in the urban planning sector
The transition to a circular economy must be done in a transversal way. It aims to improve the production, consumption and management of waste, especially in five key sectors: plastics, food, critical raw materials, biomass and construction. The latter is full of large-scale projects:
- Circular Housing Asser Renovation & Management (CHARM): led by the Delft University of Technology (Netherlands), this project was funded by the 6th call for proposals of the Interreg North-West Europe programme with €6.9 million in February 2018. It aims to optimise resource management in the housing sector by recovering at least 36% of the materials used in the construction and rehabilitation of social housing.
- Urban infra revolution: led by the City of Lappenranta (Finland), this project is financed by the 2nd UIA call for proposals in 2017 for 3.4 million euros. It aims to reduce CO2 emissions in the development of urban construction. The focus is on the reuse of industrial waste in order to replace concrete by combining the waste with high value-added material.
Regarding the present challenges, the European Union has developed several funding mechanisms covering the current and next programming period. The interest is twofold: to develop an environmentally friendly economy and to strengthen economic growth. The vision of this ecosystem is thus propitious for project leaders who will be able to benefit from the opportunities planted along the way leading to this successful model.