Members' Research Service By / February 18, 2016

Circular economy: the second round

Written by Dessislava Yougova, This dossier is an update to the previous version published in June 2014, in the context of…

© Design Praxis / Fotolia

Written by Dessislava Yougova,

Circular economy
© Design Praxis / Fotolia

This dossier is an update to the previous version published in June 2014, in the context of the first Commission proposal on the circular economy. The aim is to provide a selection of recent and relevant studies on the topic.

On 2 December 2015, the European Commission presented a new circular economy package , announced as a ‘more ambitious’ version of the 2014 proposal. Considered in the framework of the Commission’s priority for jobs, growth and investment, the proposals in the 2015 package ‘cover the full lifecycle of products: from production and consumption to waste management and the market for secondary raw materials. This transition will be supported financially by the European Structural & Investment Funds (ESIF), which include €5.5 billion for waste management. In addition, support will be provided by €650 million under Horizon 2020 and investments in the circular economy at national level’. For more information about the 2015 package on circular economy and the legislative process, see the EPRS publications below.

During the December 2015 plenary session, a debate was held on the circular economy package in the European Parliament. In January 2016, MEP Simona Bonafè (S&D, Italy) was appointed as rapporteur for the four legislative proposals .

EPRS publications:

Circular economy 1.0 and 2.0: A comparison , At a glance, January 2016, 2 p.
Circular economy package: Four legislative proposals on waste , briefing EU legislation in progress, January 2016, 12 p.
Closing the loop: new circular economy package , briefing, January 2016, 9 p.
Review of the EU waste management targets: ‘Circular Economy Package’ , Initial Appraisal of a European Commission Impact Assessment, January 2016, 8 p.
New circular economy package , At a glance, December 2015, 1 p.
Turning waste into a resource: moving towards a ‘circular economy’ , briefing, December 2014, 8 p.


Circular economy in Europe: developing the knowledge base , EEA, January 2016, 42 p.
This report describes the concept and the main characteristics of the circular economy. It outlines the benefits and the challenges regarding the transition to such an economy and highlights possible ways to measure progress.

EU circular economy package , Sara Priestley, House of Commons Library, December 2015
This brief summarizes the new circular economy package, notably key targets, timelines, and legislative proposals. It includes also initial reactions to the EC proposal.

Circular economy: a commentary from the perspectives of the natural and social sciences , EASAC, November 2015, 18 p.
This commentary considers the benefits foreseen for a circular economy and potential risks for the transition phase. It analyses the barriers to shifting from a linear to a circular economy, the uncertainties over models used in quantifying the benefits, and the potential impact of a circular economy on international competitiveness.

Economic analysis

Towards a circular economy: business rationale for an accelerated transition , Ellen MacArthur Foundation, December 2015, 20 p.
This document is an executive summary of the analysis that the Ellen MacArthur Foundation has conducted to date.
See also all publications

Economic growth potential of more circular economies , WRAP, September 2015, 45 p.
The report outlines how a growing circular economy can deliver economic benefits such as job creation, lower unemployment and increased productivity with examples from the UK and Europe.

Waste to Wealth: Peter Lacy, Jakob Rutqvist, Palgrave Macmillan, 2015 – Executive Summary , 8 p.
This book describes five circular business models based on analysis of more than 120 companies that are generating resource productivity improvements in innovative ways.

Growth within: a circular economy vision for a competitive Europe , McKinsey Center for Business and Environment, Ellen MacArthur Foundation, July 2015, 98 p.
According to this study “the circular economy, enabled by the technology revolution, allows Europe to grow resource productivity by up to 3 percent annually. This would generate a primary resource benefit of as much as €0.6 trillion per year by 2030 to Europe’s economies. In addition, it would generate €1.2 trillion in non-resource and externality benefits, bringing the annual total benefits to around €1.8 trillion versus today”.
See also the article

Case studies

The New Plastics Economy: rethinking the future of plastics , World Economic Forum, Ellen MacArthur Foundation and McKinsey & Company, January 2016, 118 p.
This report presents the vision of a New Plastics Economy which offers a new way of thinking about plastics as an effective global material flow according to the principles of the circular economy. It provides with examples from the plastic packaging value chain. The report is the result of a three-year effort led by the Ellen MacArthur Foundation, in partnership with the World Economic Forum and supported by McKinsey & Company.

Unemployment and the circular economy in Europe: a study of opportunities in Italy, Poland and Germany , Emily Coats, Dustin Benton, Green Alliance, December 2015, 32 p.
This analysis shows how development of the circular economy in Europe could impact the jobs market in Italy, Poland and Germany and bring 270 000 people back into work.

Remanufacturing market : study, ERN, November 2015, 146 p.
Remanufacturing is considered an important component of a resource-efficient manufacturing industry and a key strategy within the circular economy. The rapport, written for the European Remanufacturing Network (ERN), provides an overview of the current and potential structure and size of the European remanufacturing industry. Data on remanufacturing is gathered across nine key sectors to reveal economic value, numbers employed and approximate carbon benefits.

The circular economy: barriers and opportunities for SMEs , Vasileios Rizos [et al.], CEPS, September 2015, 25 p.
Analysing two SME circular business models, this paper identifies main barriers and enablers to adopting circular economy business practices. It also overviews the circular economy concept and the EU policy context related to SMEs.

The carbon impacts of the circular economy: summary report , Kimberley Pratt, Michael Lenaghan, Zero Waste Scotland, June 2015, 10 p.
The report quantifies the potential carbon impacts of a more circular economy in Scotland. One of the key findings is that, “regardless of carbon accounting methodology (territorial vs. consumption), a more circular approach could significantly reduce Scotland’s carbon footprint without sacrificing economic prosperity”.

Rethinking the water cycle: how moving to a circular economy can preserve our most vital resource , Martin Stuchtey, McKinsey, May 2015
This article considers water as a product, a resource, and an infrastructure system. It concludes that “since water is the single most important shared resource across all supply chains, and wastewater is the largest untapped waste category – as big as all solid-waste categories taken together – it is the natural starting point for the circular revolution”.

A circular economy for smart devices: Opportunities in the US, UK and India , Dustin Benton, Jonny Hazell, Emily Coats, Green Alliance, February 2015, 42 p.
This report identifies how laptops, tablets and smartphones, which are up to five years old, can be profitably recovered and resold in the UK, US and India. It describes six business models that companies can use to adapt to consumer preferences for lower cost, longer-lasting electronics, and how reuse can bring the benefits of internet connected devices to new consumers in the developing world.

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