Stakeholder views report : enablers and barriers to a circular economy

Abstract

Circular economy business models allow Europe to address the challenges posed by the increasing scarcity and depletion of natural resource to ensure sustained economic development, minimise environmental impact and maximise social welfare. Transitioning from linear to circular economy business models, however, is not simple. There are numerous obstacles at company and value chain levels, as well as from EU and local level policy perspectives. This report provides a simple, yet rich overview of the barriers and enablers of circular economy business models as identified by stakeholders, drawing upon a range of interviews, workshops and events, and a survey conducted with representatives of the European business sector. Within businesses, stakeholders identified high-level commitment accompanied by long-term perspectives, the personal drive and attitudes of staff, as well as the promise of enhanced competitiveness as key in supporting the transition towards circularity. Yet, from an internal company perspective, a number of factors were highlighted as getting in the way of the transition. Difficulties in financing new business models, taxation systems, resistance to change and the perceived lack of consumer demand are key examples of obstacles that hamper the circular transformation. From the policy point of view, the EU Action Plan for the Circular Economy, as well as the Plastics Strategy and funding availability are important EU level enablers that support businesses willing to pursue their circular ambition; such an effort can also be supported nationally and locally, thanks to citizen engagement and individual level of awareness, multi-stakeholder platforms and governmental circular economy priorities in the development of smart specialisation strategies. However, policy obstacles such as taxation and regulation concerning the use of secondary raw materials, as well as the lack of both harmonisation and integrated recycling plans across the EU persist. This is also the case when focusing on the national and local policy level, where poor waste management legislation, the lack of mandatory goals around circular targets, and public procurement led by financial criteria hinder the implementation of a circular economy. Importantly, stakeholders provided interesting insights into possible solutions and recommendations able to overcome the challenges posed by circular economy barriers: tax incentives, the development of wealth-measurement systems other than GDP, material passports and quality standards to name a few. Future solutions should also focus on ensuring safe areas for innovation out of tendering calls, green public procurement and increased financial support. Understanding both the obstacles and opportunities of the implementation of circular economy business models is key in the delivery of a Circular Economy. Only by acknowledging the elements which hamper or facilitate the transition can business guidelines and policy proposals be designed to effectively and successfully support the transformation.