Committee on the Environment, Climate and Food Safety Ordinary meeting
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ENVI European Parliament
Follow its sittingsJanez Potočnik
In the last decades, we have built highly extractive, inefficient and self-defeating economic conversion system, focused on maximizing throughput of materials and profits instead of well-being of the majority of the population. Our economic model is wasteful and unjust. We must decouple the well-being growth from natural resource use, environmental and social impacts, and circular economy is an instrument delivering it. Which leads me to the European Union. Recent developments brought material security through the energy doors in the center of policy attention.
Let me explain our challenge building on excellent analysis by Hans Stegeman, chief economist of Triodos Bank. For decades, European security was largely outsourced. Energy and resources were imported. Industrial production was increasingly externalized. Europe specialized in regulation, market access and coordination.
This worked well as long as three conditions held: abundant global growth, stable geopolitical guarantees and a broadly cooperative international order. This is no longer the case. Democratic erosion, geopolitical vulnerability and ecological constraints are converging and limiting political room for maneuver. Europe's current answer: it's more competition, more markets and more growth. But Europe, lacking energy resources, critical minerals and dominant technology platforms, finds itself structurally exposed in this new landscape.
Growth is expected to compensate for vulnerability rather than vulnerability being addressed as such. What would be needed to address structural challenge leading to vulnerability? In short, systemic circular economy. Many excellent examples of circular economy practice are encouraging, but to make circular economy a norm, we need a system change. In short, don't waste your time chasing butterflies, mend your garden and the butterflies will come.
The call to action launched last year by the IRP co-chairs and endorsed by many is proposing to focus on four essential policy missions. First, better orientation: define resource use path and set the science-based targets for material use. Second, improve the measurement. Third, change market incentives: stop signaling producers that extraction-based economic success is most profitable and avoid contradictory signals to consumers. And fourth, improve the transparency and coordination: fix the governance.
Coming now to the Circular Economy Act. It is an excellent opportunity to mend our garden. What one can hear from public presentations is that it will focus on single market for secondary materials, e-waste and CRMs recovery, recycled content requirements and public procurement, all that with an aim to double EU circularity to 24% by 2030. Useful, but not enough. First, in the absence of appropriate market signals and in the absence of realistic hope that they will be fixed soon, introducing upstream science-based material use targets would be important and necessary political signal.
Doubling circularity rate is not most appropriate target. It is downstream recycling oriented, not capturing all important upstream systemic changes. While pursuing many circularity policies, we have in the last decade increased the circularity rate for just a bit more than one percentage point. From current level of 12%, reaching 24 in 2030 is simply unrealistic. More appropriate target, also much better aligned with EU priorities of security, resilience, competitiveness, strategic autonomy, would be decreasing material footprint by X percent by selected year.
EU Council conclusions from June 24 are already clearly calling for that. I'm quoting: "Council underlines the need to decouple growth from resource use and its impacts by stimulating technologies and business models that make it possible to reduce resource demand at production and consumption levels and recalls the commitment in the 8th EAP to significantly decrease the Union's material consumption footprints so as to bring them into planetary boundaries as soon as possible, including through the introduction of EU reduction targets."
Upstream material targets would provide a clear vision and direction to government services and private sector. They would secure currently missing focus on demand-side solutions. They would be a true answer to our structural challenges and contribute to resilience and strategic autonomy and would provide a basis for sustainable and equitable material consumption globally. And second, CEA should address also the question how to improve the missing governance in the area of materials. There is a real need and many are already calling for more transparency and order in materials management.
Calls for establishing something like Global Materials Data Hub or International Materials Agency are coming from business and financial community as well as from the governments. To conclude, we need hope and compass. We should not allow hope to be replaced by fear and compass set by values, rule of law, science and cooperation to be replaced by turbulent future designed and kidnapped by the storm of power. Diplomacy is indeed an art of compromise, but without a compass rooted in values, Europe risks losing not only leverage but itself. Energy is indeed essential ingredient for life and energy security is critical, but energy transition will not make our economy less wasteful and more just.
Challenge is thus how to make all economic systems delivering our needs more resilient and sustainable. Compass must consider our structural vulnerability. As Hans is pointing, the current scarcity forces Europe to consider new strategic direction and prioritization. In such a context, sufficiency, reducing material demand rather than merely greening supply, stops being a moral preference and becomes a strategic economic consideration. It is a test of political adulthood.
Rather than waiting for global alignment on sustainability, trade or industrial policy, Europe's leverage lies in showing that a high-income country, democratic region can function under material constraints. This is why Circular Economy Act is so important. It is a test. Do we understand our real strategic structural challenge and the test of our political adulthood? We must move from constant adaptation to an active creation and showing that Europe can function under resource constraints, implementing circular economy concept in a holistic way is our chance to lead, not just to follow.
In short, more than opening new mines, we need opening new minds. We are crossing seven out of nine planetary boundaries and indebting future generations, financially, by depleting nature and by using our natural resources irresponsibly. This is simply wrong. Apparently humans are the most intelligent species on this planet, so it would be high time to prove it. More than an economic or technological choice, this is actually ethical choice.
Thank you.
Pierfrancesco Maran
Thank you and welcome back to this house. We know very well also your work before starting with the Circular Economy Act some years ago. Second speaker, Karsten Wachholz, Circular Economy Business Policy Engagement Lead at the Ellen MacArthur Foundation. Please you have the floor for eight minutes.
Karsten Wachholz
Thank you, Mr. Chair, distinguished members of the committee. I'm Karsten Wachholz, I work for the Ellen MacArthur Foundation. We're a non-profit organisation working with businesses, governments and academics globally to accelerate the transition to a circular economy and I want to make the case today for why the EU Circular Economy Act is a time-critical opportunity and what it needs to get it right. I try to go through the slides.
Yeah, here we go. So I start a bit with who we are. Sorry. That doesn't work very well. So as an organization, we promote...
Karsten Wachholz
Yeah, I try. We promote circular economy solutions targeting three main missions. First, critical minerals that are contained in electric vehicle batteries and in consumer electronics, fashion and textiles, and thirdly, plastics and packaging. Across all three value chains, we see the same pattern, with market rules and economic incentives that undermine circular business models that we want to scale. In order to change that, we collaborate with around 200 businesses worldwide, including major European manufacturers, brands, retailers, and circular solution providers.
And the ultimate goal is to build more resilient circular supply and value chains. I want to build a bit on what we can learn from the regulatory journey in the EU so far. So some of in this house may recall that it started actually with Janez Potočnik already in 2015 with the first action plan, delivered a revised waste framework directive and reinforced recycling targets, as well as rules for extended producer responsibility. But ultimately, it remained a waste management framework. The policy levers set at the end of life, not in value creation.
The 2020 second action plan shifted upstream. We talked about sustainable products, design requirements, and the right to repair. The outcomes were the ecodesign regulation, revised batteries and packaging rules. These are market rules regulations, a significant step forward. But there's still a critical gap.
Agreed rules remain scattered across legislative files, with different definitions, different implementation levels, and fragmented enforcement across member states. The EU circular economy policy still works in silos today. That fragmentation is precisely why we need a Circular Economy Act. Businesses tell us clearly regulatory complexity and, more importantly, inconsistency are themselves barriers to scaling circular solutions. The Circular Economy Act is the opportunity to create the coherence and the legal clarity needed to unlock the fiscal and investment levers that the delivery of the two action plans couldn't reach to date.
I try to summarize some key takeaways for the way forward. This analysis is developed with some of our closest business partners in our network and distills to four clear asks that should not only inform your discussions on the Circular Economy Act, but also on some other connected policy files that are coming up. The number one priority is single market harmonization, which is considered to be the precondition for scaling solutions. We need common definitions of circular economy activities that are referenced consistently across different pieces of legislation. And it's key to clearly distinguish between requirements for new versus already used products that are put on the market through the upcoming EU Product Act.
For the Circular Economy Act, harmonized governance for extended producer responsibility schemes is the number one priority. The performance of producer responsibility organizations varies enormously across member states and sectors. In the future, the best practice should set the benchmark for all schemes. Used products and secondary raw materials must move freely across the EU, as Mr. Chair already outlined in his introduction. And this requires that they are not reclassified as waste in another member state.
Otherwise, it is simply easier and cheaper to export them outside the EU. If we talk about digital solutions as a tool for simplification, we must ensure that these remain interoperable.
Data that sits in silos cannot drive circular solutions or unlock investment decisions. The second ask is that we need fiscal and demand policies to send the right market signals. Two examples: in most member states, the resale of used textiles or electronics is taxed at the standard VAT rate, even though the same product was already taxed when it was first sold. This penalizes circular business models. The green VAT initiative that is expected in early 2027 should fix this.
Same for public procurement. We are spending 2.5 trillion euros, roughly 15% of EU GDP, mostly without any circular economy or life cycle cost considerations. The upcoming Public Procurement Act can change this. The third ask is around industrial collaboration. We have already examples at a smaller scale where fashion brands are working with recyclers on design for recyclability.
Electric vehicle battery makers should coordinate with downstream users to enable second or even a third life of batteries before recycling. We have some tools and instruments already existing that we can use to promote these types of collaboration: value chain alliances, strategic offtake agreements, trans-regional circularity hubs. All these instruments help de-risk private investment in circular infrastructure that we need collectively. Finally, international alignment. I heard the doubts it may take long, but we should not, or we should avoid creating a European island for circular solutions.
So, even in a complicated political environment, we would encourage the EU to facilitate discussions on circularity chapters in specific bilateral or even, if they still come, multilateral trade agreements. We need some sort of joint targets and working towards, most importantly, mutual recognition of circular economy standards. Without this, European businesses face competitive disadvantages and we risk waste being exported rather than value recovered domestically. Let me quickly note that this is not an NGO agenda. The companies on this slide employ millions of Europeans across manufacturing, retail, logistics, waste management, and finance.
In April, they signed a joint letter to the Commission calling for support for these four concrete asks on the previous slide. These are major businesses asking for regulatory clarity so that they can invest with confidence. Uncertainty, not the lack of ambition, is what holds back circular investment. What do we mean by regulatory clarity? What is the type of regulatory clarity we need the Circular Economy Act to provide?
There are three distinct layers, from keeping products and materials in use all the way through to enabling used products and secondary raw materials entering the economy. A focus on recycling alone is not enough. The first layer is about circular business models that keep products and materials in use and prevent waste from being created in the first place. Resale, repair, reuse, refurbishment, and access-over-ownership models. They need reliable EU-wide market rules and must not be burdened with unnecessary waste status designation.
If repairing or reselling a product triggers waste classification, the economics of the business model collapse. The Circular Economy Act must make this unambiguous.
When we come to preparing for quality recovery, that means once products are discarded, EU waste legislation takes over: collection, sorting, preparing for reuse and recycling, you know that already. The central accountability question is whether producer responsibility organizations deliver circular outcomes, such as higher reuse rates, better quality collection, sorting, genuine preparation for value recovery and high-quality recycling, or do they just focus on compliance box-ticking? And the final one is achieving end-of-waste status. Harmonized EU criteria and risk-based procedures for waste shipments and end-of-waste status are what allow used products and secondary raw materials to re-enter the economy and move freely across the single market. Today, the same recovered part or material can be a product in one country and waste in another.
The Circular Economy Act must fix this. I thank you for your attention, and the final slide doesn't show, but that's what I wanted to share with you. We've published a white paper which I'm happy to share with the secretariat and the members of the committee in March.
Josep Puxeu
Thank you, thank you very much, President. So, if it's possible, I prefer speak in Spanish for my prepared this intervention. So, my actual role is the president of Ecoembes, but I have a member of Economic and Social Committee and vice president of section NAT, Nature, Agriculture and Regional Areas. Trabajamos desde hace muchos años y coincido plenamente... Excuse me.
Well, thank you. Trabajamos desde hace muchos años en la concienciación de la necesidad de tener un planeta más ordenado y en días como hoy, después de un mes de mayo terrible de impacto de calor y este mes temprano de junio con temperaturas imposibles en no solo en el Mediterráneo sino en toda la Unión Europea, se hace más perentorio trabajar y trabajar bien por el futuro de este planeta que es el nuestro. Coincido plenamente con mis dos ponentes antecesores, claramente con el comisario Potočnik, con el cual habíamos trabajado en mi época de secretario de Estado de Medio Rural y Agua en España. Está claro que treinta años de historia de una entidad como Ecoembes, que es una organización criticada pero sin ánimo de lucro, participada por más de veinticuatro mil empresas, el retail, la producción, etcétera, que si me preguntan ahora desde mi rol de presidente qué es lo mejor que ha hecho Ecoembes, trabajar por la economía circular, no, concienciar a los ciudadanos. Y es algo que no es solo de Ecoembes o de las organizaciones locales.
Toda la ciudadanía de la Unión Europea ha evolucionado en el conocimiento y en la toma de conciencia ciudadana. Esta es la mejor inversión que hemos hecho. Claro que nos hemos equivocado muchas veces, hemos visto la circularidad como una tasa, como un impuesto, como una carga. Nunca lo hemos explicado suficientemente bien. Nada más lejos de la realidad.
Es el compromiso ciudadano y la concienciación lo que nos pueden hacer avanzar y para ello estamos yo creo hoy aquí en la comisión. Tenemos muchas lecciones aprendidas, es pura experiencia. Claro, no diré nada nuevo si digo que hemos hecho demasiada norma. Claro, pero esa demasiada norma la hemos hecho con buenas intenciones. Y si queréis lo concluimos hasta en el anterior periodo de sesiones, en el Green Deal, magníficas, buenas intenciones, mal explicadas a veces y peor aplicadas en otras ocasiones.
Les voy a poner dos ejemplos de mi vida cotidiana: la Red Natura 2000 o los ecoesquemas en la Política Agrícola Común. Dos temas que si me preguntan son urgentes y perentorios para la defensa de la biodiversidad y de las poblaciones que viven en zonas delicadas, humedales, zonas de montaña, etc. Pero como lo hemos explicado mal, los propios ciudadanos a veces lo han entendido como una tasa, como una prohibición, como una pérdida de propiedad o de competitividad. Por tanto, buenas ideas, mal explicadas y a veces peor aplicadas. No es con más regulación que conseguiremos más eficacia.
Los objetivos fijados sin asegurar mecanismos y estructuras necesarias a veces se hacen difíciles y complejos. La adaptación y la transición son elementos que debemos incorporar a nuestro acervo, también ahora en las nuevas normas y en la nueva ley. ¿Por qué? Porque sin periodos transitorios, mecanismos de adaptación y alternativas, caemos en la obligatoriedad y la prohibición y ahí no conseguimos el consenso ciudadano. Las políticas ambientales deben verse como un elemento, y más en este momento complejo y convulso en el ámbito multilateral, las políticas ambientales deben verse como un elemento más de competitividad y de refuerzo de la autonomía estratégica.
Nuestro modelo de vida europeo, nuestra manera de entender cómo debemos comportarnos especialmente con los recursos escasos, agua, suelos y materiales, debe ser la base del mercado único, debe ser la base de nuestra conciencia europea. En documentos como el Rapport de Draghi o de Letta están poco reflejados a mi modo de ver. Deberíamos hacer más hincapié en ese modo de ser europeos, esa forma de ser europea, esa forma de construir Europa. Y así deberíamos ir, os lo digo desde la experiencia, a las conferencias multilaterales. Da igual que sea en Nueva York para el tema de los Objetivos de Desarrollo Sostenible, que en las cumbres de clima o en las cumbres de biodiversidad.
Esa manera de ser europea, convincente y efectiva, es nuestro mejor bagaje. Está claro que para avanzar hacia el futuro debemos reforzar, y lo digo desde la conciencia de una organización con 24.000 empresas, la responsabilidad ampliada del productor. Debe quedar clarísimo, a mi modo de ver ya lo es, no es una tasa, es la solución. Es la solución porque también el comportamiento de nuestras empresas, muchas de ellas pequeñas y medianas, su estrategia de comunicación puede ir basada en esos modelos. Pero las empresas grandes, las cotizadas, también forma parte de su know-how la preservación de los recursos, la preservación del medio ambiente y a la vez la preservación de las demandas de los ciudadanos que al fin y al cabo son sus clientes.
La fragmentación es otro de los grandes problemas en que nos encontramos los 27. Tenemos la necesidad que la futura ley sea un instrumento de consolidación y cohesión del mercado único. Y debemos hacerlo con transparencia y con trazabilidad. ¿Cómo?, dirán ustedes. Pues esta trazabilidad yo la vislumbro con control, con auditorías independientes y con suficientes elementos para que no se vea que es una ficción, es una realidad.
Para ello los sistemas de responsabilidad ampliada del productor pueden colaborar, estamos absolutamente todos dispuestos a hacerlo.
Pero además hay que prever y en el marco financiero plurianual debería preverse más inversiones en infraestructuras y en soluciones en medio y largo plazo a nivel de toda la Unión Europea. Si de verdad queremos consolidar un verdadero mercado único de materias primas secundarias, lo ha dicho el comisario Potočnik y lo ha dicho mi colega hace dos minutos, debemos avanzar hacia un verdadero mercado único de materias primas secundarias, medidas equivalentes para los materiales importados. No les quiero aburrir con esto en este último medio minuto, pero miren el comportamiento de los materiales el último trimestre del año pasado y el comportamiento durante esta crisis del estrecho de Ormuz. La inestabilidad es flagrante y desestabiliza en este sector como en otros, fertilizantes, materiales críticos, etcétera, etcétera, toda la estrategia empresarial europea. ¿Por qué?
Porque realmente debemos dar marcos suficientemente sólidos jurídica y económicamente viables. La importancia y la oportunidad de la ley de economía circular, presidente, diputados y diputadas de la Comisión de Medio Ambiente, debe hacerse a nuestro modo de ver desde una perspectiva holística y coherente y debe hacerse con la claridad suficiente para que los operadores puedan cumplir sus objetivos y claramente sin perder de vista llevar de la mano a los ciudadanos de la Unión Europea como principales partícipes de esta estrategia. Muchas gracias.
Pierfrancesco Maran
The speaker of this panel is Mareike Hoffmann, Deutsche Umwelthilfe. My German is not that good, but you have the floor.
Mareike Hoffmann
Mareike Hoffmann is my name. I would like to thank you for the opportunity to speak here today. We are an environmental NGO intensively working on circular economy and extended producer responsibility. Let me start with the challenges we are facing. We still have rapidly increasing waste volumes, for example for e-waste, packaging and textiles.
And despite progress in some areas, our economy remains largely linear. Most products we use every day are made from primary raw materials, resources which are finite and often come from unstable regions. Europe remains highly dependent on resources imported from outside the EU. Many products have short lifetimes and are difficult to repair because spare parts or repair information are not available. An example is software.
The lifetime of many products depend on software updates controlled by a small number of private companies. To strengthen Europe's resilience, we need to reduce these dependencies. One of the most effective ways to reduce our dependence on imported fossil fuels and critical raw materials is to build an economy that requires fewer resources, keeps products in use for longer and recycles the materials it still needs. Nearly two decades after the waste hierarchy became legally binding at EU level, waste generation is still increasing in several key sectors. And we have to admit that the upper level of this hierarchy have been mostly ignored in legislation until now.
The waste hierarchy is not only a good tool on reducing waste, it can also show us how to use resources efficiently and become more resilient.
Speaker 15
For example, if we repair a machine with critical raw materials, we avoid the production of a new machine and reduce the demand for new material imports. Therefore, we propose that the policy measures in the Circular Economy Act should focus on prevention, repair, and reuse. Similarly to greenhouse gas reduction targets, we need also targets for reducing resource use and preventing waste as a framework for all these measures. First, we propose binding targets for primary resource consumption and material footprint. Member states such as the Netherlands and Austria have already adopted such targets.
Secondly, we propose mandatory waste prevention targets. We may set such targets for residual industrial and commercial waste, but we need such targets also on product level, for example, for textiles, e-waste, and construction waste. Recently, the PPWR already demonstrates that binding waste prevention targets are feasible. And we propose that these targets should become legally binding for member states in order to guide policy instruments and secure circular business models. We think that sharing, repair, and reuse should become the norm.
Surveys show that European consumers are ready for this transition. 77% would rather repair their goods than buy new ones. 52% are willing to buy a refurbished smartphone in the future. There is a considerable market potential for reuse and repair, however, we have to invest in this market. Imagine in the future in mainstream retail stores and online sales, also second-hand goods would be offered.
And imagine to find reuse infrastructure in all the facilities we call recycling centers today. I would also like to note that these business models are the opportunity for small and medium-sized enterprises. Repair and reuse create many local jobs that cannot be outsourced. Using products for longer therefore reduces our dependence on imported resources while strengthening local economies at the same time. The concept of extended producer responsibility in the Waste Framework Directive means that producers are financially and regulatorily responsible for the end-of-life management of their products.
In most member states, EPR fees are currently solely used for collection, treatment, and awareness rising. However, the Waste Framework Directive also links EPR to the waste hierarchy, and the original aim behind EPR has also been to promote prevention and reuse. And we should now return to this initial idea. EPR principles in the Waste Framework Directive should be fundamentally revised to ensure that producer responsibility goes beyond end-of-life. But how can we achieve this?
First, EPR contributions should also be used for waste prevention, repair, and reuse. One example is the repair bonus in France, which is already financed through EPR. Second, EPR contributions should be modulated based on product characteristics such as durability, repairability, and recyclability in order to promote eco-design. Some member states already apply such approaches. And third, we need dedicated targets for the preparation for reuse, which are separate from recycling targets.
And finally, EPR should be expanded to other product groups such as furniture, mattresses, toys, household goods, and construction products.
Speaker 13
EPR rules in Europe are currently highly fragmented across Member States and product groups. For example, Germany has a system of shared producer responsibility for electronics, which is unique in Europe. This fragmentation leads to varying fulfillment of environmental targets, high administrative burdens for businesses, and an uneven playing field within the internal market. We therefore agree that harmonization of EPR rules is necessary. However, harmonization must not lead to lower environmental ambition.
We propose a system that is simple but effective. Producers should fulfill their obligations through collective producer responsibility organizations. These PROs should be required to meet environmental targets, for example, on collection, recycling, and preparation for reuse. Compliance with these targets should be independently monitored by the authorities. And to prevent a race to the bottom, PROs should also have additional economic incentives to even exceed minimum targets.
My last point is on product policy. We made important progress on ecodesign and repair. However, these rules have to be expanded to additional product groups in order to increase the lifetime of a wider range of everyday products. We also believe that some highly problematic products should simply be phased out from the market. One example are single-use vapes, which have short lifetimes, cause fires, and pose risk to human health.
And finally, we need to address problems in online trade. First, we need to stop the destruction of large quantities of unsold new goods. And second, we need to tackle the large volumes of non-compliant products entering the European market through online platforms. This problem creates a significant disadvantage for European businesses that comply with EU rules. And therefore, we demand liability and checking obligations also for online platforms.
Thank you for the attention.
Pierfrancesco Maran
Very well, now we have a Q&A session. Every political group representative got one minute and 30 seconds. I kindly ask to respect this time. We start with Pascal Arimont from EPP.
Pascal Arimont
Vielen Dank, Herr Vorsitzender, vielen Dank an die vier Redner für diese ausführlichen Ausführungen. Abfall ist Rohstoff. Recyclen heißt ein strategisches Instrument zu bilden, das aus Rohstoffen Rohstofflieferketten macht und das führt dazu, dass wir in wichtigen Sektoren ein Stück unabhängiger werden können in Europa. Ich möchte auf drei Punkte hinweisen und ich möchte vom eher theoretischen Vortrag zu eher einem praktischen Betrachten der Dinge kommen. Ich habe mir mehrere Recycelzentren angesehen in den letzten Monaten.
Ich war unter anderem in Gent, wo Plastik gesammelt und getrennt und recycelt wird. In Belgien haben wir das System des blauen Sackes, das sehr gut funktioniert. Allerdings sagen die Leute mir vor Ort, wir haben größte ökonomische Probleme, weil Rohplastik aus China deutlich billiger ist als all das, was man unter anderem in Belgien aus Granulaten herstellen kann.
Das erste Beispiel. Das zweite, ich war heute Morgen in einem Aluminiumwerk. Aluminium wird auch recycelt, das best zu recycelndste Material der Welt. Die Leute dort sagten mir, dass ihre Recycelzentren in Europa im Moment geschlossen werden, weil das eingesammelte Aluminium nach China verkauft wird und wir im Moment zu wenig eingesammeltes Aluminium haben, um einen Markt zu kreieren. Dritter Punkt, wenn man in Europa Abfall hat und ihn zum Recycling bringen will, dann muss man in jedem Land quasi eine Genehmigung haben, um diesen Abfall in ein anderes europäisches Land zu bringen, weil wir zum einen die Definition des gefährlichen Abfalls nicht harmonisiert haben und zum anderen, weil das Ende der Abfalleigenschaft auch nicht definiert ist.
Das führt dazu, dass wir überhaupt keinen europäischen Binnenmarkt haben, um Abfall von einem Land zum anderen zu transportieren und ihn dort zu recyclen. Meine Frage daher an die vier Intervenenten, wie kann der Recycling Act auf diese drei sehr konkreten Problemen eine Lösung finden? Vielen Dank.
Heléne Fritzon
Thank you, Chair, and thank you to the panelists. We are looking forward to the Circular Economy Act and we have high expectations. It's an ongoing discussion on how to improve recycling, including of course how to recover metals and other valuable materials, but we also need to level up the capacity to reuse. So, what do you think is the potential of integrating reuse into EPR scheme? We heard a lot of it now in the discussion, but we need to find the key.
And when it comes to textiles, I was negotiator for the Waste Directive. We are in the process of introducing an EPR scheme where we know that eco-modulation is a way forward to more sustainable production processes, but we know that textile recycling is a very energy intensive, so we must continue stimulate reuse. But what are your most important key to reach the targets for textile recycling so it's really makes sense for our climate? And also, how do we create economics and systems of scale to support reuse and recycling? Maybe we need to discuss further how to use public procurement more efficient.
We also have the problems with online platforms and the transport and so on. And finally from my side, when I listen to the panelists, the discussion about to start upstreams. Interesting. What are the most low-hanging fruits or the more challenging shifts that needs to take place? I would like to hear more about that.
Thank you.
Anna Zalewska
Thank you, Mr. Chair, I will speak Polish. Bardzo dziękuję panelistom i myślę, że każdy z nas powie tak, że jest potrzebny taki wspólny akt, który uzupełni i ujednolici definicje, pokaże cele, ale. Myślę, że to, czego my potrzebujemy na początku tej debaty i przed konstruowaniem tego rodzaju aktu, to pełna inwentaryzacja tych dokumentów, które już funkcjonują w Unii Europejskiej, bo mamy ich bardzo dużo.
I wiemy na pewno, że są to dokumenty, które też wskazują różnego rodzaju cele, są na różnych etapach wdrażania, niektóre są wdrożone, nie wiemy dlaczego nie działają i ile kosztują. Dlatego, że to jest to, czego potrzebujemy oprócz manifestów trochę politycznych, ekologicznych, z którymi się zgadzamy. To znaczy policzenia kosztów, dlatego że wiemy w jakiej sytuacji jest Unia Europejska, wiemy jakie mamy kłopoty finansowe, jakie różnego rodzaju cele, w tym cele obronne. I jednocześnie znamy sprawozdanie Trybunału Obrachunkowego, które pokazuje nam jak szczególnie tam, gdzie powinno nam zależeć, to znaczy w wypadku metali ziem rzadkich, surowców krytycznych, w ogóle nie wykorzystujemy ponownie tychże metali, tychże surowców. Jednocześnie chcę zauważyć, że oglądanie się na cały świat na kolejnych szczytach klimatycznych pokazuje, że nie mamy na co liczyć.
To znaczy Unia Europejska została sama, nikt w tym tak naprawdę nie chce już brać udziału, więc musimy znaleźć rozwiązanie tu i teraz. Natomiast musimy pamiętać, że sami generujemy to, co powoduje, że to, co uznawaliśmy za dobre staje się śmieciem. Ja przypomnę rozporządzenie na przykład dotyczące pomp ciepła. Otóż te pompy ciepła, które produkowaliśmy już są niedobre, mamy całe aneksy mówiące o tym, że mamy je wymieniać. Przypomnę całą akcję związaną z wymianą kotłów na kotły gazowe, one są już nieaktualne, już mamy je wymieniać.
Moja koleżanka, która ze mną pracowała przy dyrektywie odpadowej, pamiętajcie państwo, że w tym roku ma być rewizja całej tejże dyrektywy odpadowej, słusznie wspomniała o naszym apelu ciągle niezrealizowanym, że na platformach między innymi odzieżowych, zabawkowych, tych z Azji...
Anna Zalewska
Okej, ostatnie zdanie. Nie mamy w ogóle zgody na to, żeby uczestniczyć w jakimś opodatkowaniu, nie mamy równych szans jeżeli chodzi o kraje azjatyckie. Tych przykładów można mnożyć, ale rzeczywiście rozpocznijmy debatę, ale poważną, z inwentaryzacją i liczeniem pieniędzy.
Sara Matthieu
Thanks a lot for your speeches. I've heard quite some ideas that really resonate with our group. Maybe to start with Mr. Potočnik, you really talked a lot about the geopolitical vulnerabilities we have as Europe and there I completely agree. If we indeed want more stability but also more fairness in our economy, then circularity, lower resource dependencies, they are really a strategic necessity. And the key message here is that China, the US, others, they can't weaponize the resources that we're actually not consuming.
So keeping resources in Europe, it's our first line of defense. They are really the antidote to those reliance we have on Chinese imports. But well, you talked about the need for complementary targets to measure progress, including the footprint targets that both the Council and the Parliament have requested. I guess the question is, why do you think we don't have them yet and what could we actually do to change that around, because we very much agree on the necessity. And then maybe to Marieke Hoffmann, next to the clear compass, we also need to fix the business model of course when it comes to circularity.
I do agree when it comes to VAT on repairs, second-hand goods, that would really already help us a long way. Also the harmonized eco-modulation in EPR schemes that has a huge potential. We need to provide those economic incentives for recycling, but of course also when it comes to prevention, when it comes to reuse, when it comes to repair, because actually this creates a hell of a lot more jobs than just recycling.
And in that sense, the French repair bonus is indeed a best example. But maybe could you say a little bit more on why you think that producers should join collective producer responsibility organizations and pursue environmental targets? What to do to reduce and avoid illegal import, and can you expand a bit on what you said on online platforms, and how can we actually concretely turn recycling centers into real reuse centers? Thanks you very much.
Pierfrancesco Maran
Now we have the IMCO Vice-Chair Maria Grapini for one minute and 30. Thank you very much. O să vorbesc în limba română... Pardon, sorry, I made a mistake. There is Sebastian Everding from the Left before.
Sebastian Everding
Thank you, Chair, I will continue in German. Vielen Dank für die informativen Vorträge, die zeigen aber auch deutlich, welche Herausforderungen uns noch bevorstehen. Und wenn wir über ein europäisches Kreislaufwirtschaftsgesetz hier im Parlament sprechen, reden wir meistens über Ressourcen, über Wettbewerbsfähigkeit und Innovation. Wir sollten aber auch über diejenigen sprechen, die den versteckten Preis unserer Wettbewerbsgesellschaft Wegwerfgesellschaft zahlen, und das sind neben der Umwelt ganz oft die Tiere. Und das sind sehr häufig unschuldige Lebewesen, die keinerlei Verantwortung für unseren Konsum und für unsere Abfallproduktion tragen, weil die Folgen unseres Abfalls, die reichen weit über die heimische Mülltonne hinaus.
Plastikmüll gelangt in Flüsse, Meere und in natürliche Lebensräume. Und viele Tiere können Plastik nicht von ihrer normalen Nahrung unterscheiden. Vögel, Fische und Meeressäuger verschlucken Abfall oder verfangen sich da drin, und das hat ganz häufig tödliche Folgen. Und auch Mikroplastik, unter anderem aus der Textilindustrie, findet sich inzwischen komplett entlang der gesamten Nahrungskette aller Tierarten. Und darüber hinaus werden große Mengen an Lebensmitteln mit tierischem Ursprung weggeworfen.
Und dahinter stehen Tiere, die gehalten, gemästet und geschlachtet werden, und obwohl die daraus gewonnenen Produkte niemals durch uns Menschen konsumiert werden. Und wenn Fleisch im Müll landet, werden nicht nur Ressourcen verschwendet, sondern auch Tierleben. Und auch die Textilindustrie trägt zu diesem Problem bei. Die schnelle Produktion und Entsorgung von Kleidung führt nicht nur zu enormen Abfallmengen, sondern erhöht auch die Nachfrage nach tierischen Materialien wie Leder, Wolle oder Daunen. Und wenn Kleidungsstücke nach kurzer Zeit wieder entsorgt werden, dann werden auch da Ressourcen verschwendet und letztlich auch die tierischen Produkte, die für die Produktion der Kleidung eingesetzt werden.
Und eine echte Kreislaufwirtschaft muss vor diesem Hintergrund deshalb weit über das Recycling hinausgehen. Sie muss Abfälle an der Quelle vermeiden, sie muss die Überproduktion reduzieren und sie muss nachhaltigen Konsum fördern. Und weniger Abfall bedeutet weniger Umweltverschmutzung, weniger Druck auf Ökosysteme und letztlich auch weniger Tierleid. Und deshalb sollte Tierschutz nicht als Randthema gesehen werden in dem ganzen Thema des Kreislaufwirtschaftsgesetzes, sondern als Teil der Lösung. Vielen Dank.
Maria Grapini
And now it's the turn of Maria Grapini.
Thank you very much. Voi vorbi în limba română. Reprezint Comisia Piața Internă, sunt vicepreședinte și mă bucur că ați organizat această audiere pentru că pentru piața internă este extrem de important să avem niște reglementări unitare și da, susțin și susținem ca și comisie un regulament privind economia circulară. Eu vreau să vă mulțumesc pentru multiplele informații pe care ni le-ați adus aici, speakerii, și am și câteva lucruri de clarificat. Mă bucur că ați spus, domnule comisar, că 24% reciclabile până în 2030 este o țintă nerealistă.
Din păcate, de foarte multe ori s-a reglementat și Comisia a pus ținte nerealiste, ceea ce a făcut sigur să patinăm așa, în să facem să avem costuri și să nu rezolvăm țintele.
Pe de altă parte, ați spus că considerați că ar fi nevoie să avem o agenție pentru materiale și aici aș vrea să ne dați mai multe explicații ce înțelegeți prin asta. Dar ceea ce vreau, pe ceea ce vreau să pun accent este pe directiva pe deșeuri și pe problematică. Am văzut aici procentul, contribuția deșeurilor din textile foarte mare, cred că este al doilea în top, a crescut cu 28% în ultimii șase ani. Eu sunt producător de textile, sunt industriaș și știu foarte bine ce probleme sunt. Deci noi nu putem reglementa înainte de a avea soluții pentru deșeuri.
Și în textile există o problemă. Dacă costul este mai mare și ați spus foarte bine aici că trebuie să mediatizăm și să explicăm încât să nu se vadă pentru conștientizarea cetățenilor și a companiilor să nu creadă că este un cost, ci că avem o soluție. Dar dacă pentru a valorifica deșeul din textile, de exemplu fibrele, da, firele din industria textilă ne costă mai mult pe kilogram decât costă materia primă kilogramul, evident că are o problemă producătorul. De aceea eu cred că firesc este să avem soluții pentru fiecare tip de deșeu, să avem o trasabilitate și să avem în toată piața internă aceeași regulă și de colectare și de valorificare a deșeurilor și după aceea să impunem responsabilitatea producătorului pentru că altfel n-o să facem decât să ne furăm căciula singuri. Adică producătorii unii mai curajoși vor arunca deșeurile, alții care nu vor putea să răspundă regulilor vor închide și nu ne atingem scopul de fapt.
Scopul nostru este într-adevăr să avem această reciclare și această economie circulară care, da, ar face o economie de resurse. De aceea aș vrea, dacă se poate, să-mi răspundeți la aceste întrebări. Vă mulțumesc.
Pierfrancesco Maran
Thank you. Now it's the catch-the-eye. We start with Manuela Ripa from EPP, one minute each.
Manuela Ripa
Yeah, thank you very much. If Europe wants to become global leader in the circular economy, we need to stop putting obstacles in the way of our innovative companies and instead provide the right regulatory framework. In my constituency, there's a company that is a European leader in tire recycling. Using low-carbon thermolysis, it converts end-of-life tires into high-quality secondary raw materials that are fed back into the circular economy. This is exactly what a circular economy act can make a real difference.
We should keep valuable raw materials in Europe, in the case of this company by introducing an export ban on end-of-life tires, which would also help address the problem of exporting environmental impacts abroad. We should promote the use of secondary raw materials. We should support technologies that also contributes to solving the PFAS problem as they destroy PFAS. And we should establish EU-wide harmonized label system for products made from recycled materials. And it is clear, we need to keep industrial value creation and innovation in Europe.
So my question would be to the panelists: how can we accelerate the scale-up of innovative circular economy technologies and enable secondary raw materials to compete more effectively with virgin materials? Thank you very much.
Vytenis Povilas Andriukaitis
Dėkoju. Aš kalbėsiu lietuviškai. Ponas Potočnik kaip tik paminėjo žiedinės ekonomikos pradžią, tai buvo Jean-Claude Junckerio komisija 2015-2019 metais ir man teko būti atsakingam už maisto nešvaistymo visą problematiką ir pradėti diegti maisto nešvaistymo taisykles ir aptarti maisto nešvaistymą nuo pat lauko iki pat iki pat virtuvės, iki šakutės, taip sakant. Tai mano klausimas būtų toks: ar nemanote, kad žiedinės ekonomikos problematika turi būt labai giliai įdėta į savivaldybių politikos tikslus, nes savivaldybių lygiu be galo daug galima padaryti, kad žiedinės ekonomikos tikslai būtų geriau pagyvent įgyvendinami savivaldos lygyje, net nuo daugiausiai mes maisto švaistome virtuvės lygyje? Tai šiuo atveju būtinai būtų gerai, kad apskritai daugiau įdėti rekomendacijų per šalių per komisijos pasiūlymus šalims narėms, įjungiant instrumentus į savivaldybių politiką.
Ačiū.
Rasmus Nordqvist
Thank you and and thank you to to the speakers, very interesting interventions and things we can we can actually bring on to to next steps when it comes to Circular Economy Act. I think it's interesting actually also in line with what the speaker said with the change we've seen in the in the narrative coming from the Commission, going away from the pure waste management actually to seeing circular economy as a strategic tool when it comes to to competitiveness as well, to to security. So so I actually think we've seen a bit of a change the last year from the Commission and happy about that. I have two two questions I would like to to to ask about. One thing is about the upstream targets, if if you could say some more about, I mean, because what we're looking into is also we need different targets for different sectors right now to actually target our our our approach, if if you could elaborate a bit more on on that part.
And then for for Ellen MacArthur Foundation on the trade measures, I think that's very interesting. We hear some people advocating for using the CBAM, expanding the scope also there for for chemicals and polymers, that's one thing, but the French government or people from the French government have talked about a textile border mechanism. Could you also perhaps talk a bit tell us a bit more about the trade measures when it comes to circular economy specifically on textiles? Thank you.
Lynn Boylan
Thank you, Chair, and thank you to all the the speakers for their really comprehensive presentations. I just have a couple of questions for for some of the speakers. So for the first one, for Mr. Potočnik, I was wondering if you could give concrete examples when you said of the false signals that the EU is sending. So are there perhaps any EU policies that are currently being developed that are sending those false signals to either businesses or to consumers that extractive processes are no longer the the way to go? For Mr. Watsholtz, could you expand on the the options for including circularity provisions in trade agreements?
I'd be interested to know what what you see that looking like. Is it about common definitions, example for waste, or is it focusing more on the trade in critical raw materials and how to make their use more circular and sustainable? Or have you looked at the issue of access to source codes because we know that that's that's crucial when it comes to the built-in obsolescence of products and is something that regularly comes up in trade policy? And then finally, just for Dr. Hoffman, could you expand on how Austria and the Netherlands are managing their resource use reduction targets? On online trade then, do you also have more figures on how many unsold goods are actually destroyed and does it tend to happen within the EU or outside of the EU?
And based on the details of when and where it's happening, how can we best address the problem? Thank you.
Delara Burkhardt
Yes, I would have only a small question, you all, small big one. You all spoke about the importance of harmonization of EPR schemes and we as S&D can really much support this, but the question is which harmonization? And for us it should be a most ambitious one and I would like to know if you can give best practices or examples of of where harmonization on a European level should go, so which member states or which elements are already working, functioning and where would you see the ambition or the harmonization should lead to.
David Cormand
Merci, je vais vous parler en français et je vais être bref. Merci beaucoup, merci beaucoup aux panélistes pour leurs interventions. Dans les questions qui ont suivi, j'ai beaucoup entendu parler de recyclage, mais dans les législations qu'on avait votées lors de la dernière mandature, que ce soit sur Empowering Consumers ou pour Ecodesign, avec notamment des dispositifs sur l'obsolescence prématurée, on souhaitait beaucoup insister sur le réduire et réutiliser. Et je voulais vous interroger sur est-ce qu'il n'y a pas un risque de faire évoluer une stratégie réellement efficace pour l'économie circulaire, c'est-à-dire avant tout réduire et avant tout réutiliser, et que ça glisse petit à petit vers une croyance un peu excessive sur le recyclage qui aujourd'hui, c'est le moins qu'on puisse dire, a du mal à tenir ses promesses. Et donc j'aimerais un peu vos vos lumières, vos avis sur comment on peut être plus solide sur des législations qui assurent avant tout la réduction des déchets à la source et la réutilisation des produits manufacturés.
Pierfrancesco Maran
Well, many questions but only three minutes each to answer. So we start with Potočnik.
Janez Potočnik
It will be difficult in three minutes, but let me try. First, for the record, the first circular economy proposal was Barroso's Commission, June 2014, it was proposed by me and Juncker's Commission was so smart that they removed it from the agenda and after the pressure of the business community they put it back on the agenda December 2015. So that is what they have done. But if you are interested, read my proposal, it's really interesting read still today. That's first.
Second, as you know, European Union is as strong as it works together and we have obviously the problem with that. But one thing which is in Europe pretty much missing is we do not really think and move, act strategically. So what is currently happening globally it's this: we are moving from the fossil economy, hopefully we will succeed with that, towards the metals and minerals economy.
That's what is happening. So we need to be quite careful how this process is actually managed because it is really important that that we do understand that in that context Europe being import dependent on energy and on the majority of those materials it's vulnerable and our competitiveness in the long run can only be based on a very efficient responsible resource management. Otherwise forget competitiveness of Europe. We have that problem and we have to build it in our strategical decisions. Third what I would like to say it's recycling.
Recycling it's of course important part of all the story. But we need to understand that in the hierarchy of circular economy recycling it's the worst of the good because you have already used the resources. So you have to focus upstream and try to avoid using the resources. That's actually the idea. But in critical raw materials because that's that's a total misunderstanding existing.
If somebody thinks that in critical raw materials recycling is the solution it's totally mistaken because critical raw materials problem is that that it's growing we need growing needs and in the growing needs if you recycle all the batteries of today in 10 years you need 10 times more. What will recycling do to that? Nothing because it's actually growing story. When it's stable story recycling can and should be important part of the solution. But in this transition which I mentioned at the beginning that's a critically to understand you need to introduce other more upstream circularity measures or the other possibility it's only more mining.
So that's how it goes. Fourth material agency because I was explicitly asked about that. We are working with ICC which is International Chamber of Commerce representing practically everybody who it's moving in the trade area with Mining 2030 which is association of financial communities with UNEP which you know what it is and with IRP which I'm co-chairing we are working currently on something like is there a need for international materials agency. I personally believe it's a very deep need because in energy you have convention you have International Energy Agency you have IRENA which is dealing with policy. In materials management there is nothing.
And everybody in this transition from fossil to metals minerals it's looking how to manage it. And we need to establish some transparent reliable institution which will start dealing with those questions or there will be a serious problem in that process which needs to be done right and in the right way. And the last two comments material footprint material footprint target it's actually consumption related target because it's pointing the finger on those who are it's what you domestically extract plus imports minus exports and it's pointing on your consumption or I would say it overconsumption. So it is a very reliable acceptable international term. While the circularity rate actually we don't know what it is.
It's downstream it's more or less measuring the recycling because that's easy to measure. And if we say 12 or 24 percent we actually don't know what is 100. Thank you.
While in the other we know exactly what is 100. And I think it's really important that we start thinking material footprint, it's actually not implementation target, it's directional target. So it's setting you in a certain direction. So use less resources. That's what it's saying.
Or better to say, it would put on a political table the question of materials, which is currently not there. Everybody talks about energy, more energy and the situation is fine, but it will not be fine because the real problem is actually connected with both, with energy and materials management. And finally, the last comment about industrial needs. Quick comment, please. Yeah, this is just one sentence.
Industry needs predictability, as good as it gets level playing field, support for transition, simplification, not deregulation. And changing strategic direction doesn't help industry. And if you want real what are the major business risks of industry, look at the World Economic Forum, which is each year defining their risks. In 10 years, all three major risks in 10 years are environmental risks. They see it, but they would lose the job if they would follow that.
So please don't kill industry with kindness. We have tried that in Europe for decades and we have almost succeeded.
Karsten Wachholz
Thank you. I'll try to address four questions. One was about where to focus the discussion on harmonization of EPR systems. This should look into the governance models that are existing currently where we believe we need more clarity on the accountability of different actors, including the businesses who should lead PROs, the role of member states, recyclers and municipalities. We need some sort of common standards in terms of how we create better transparency of the performance, including what the funds are used for and what how does that relate to the net cost of collection and sorting.
The second one is principles for the eco-modulation of EPR fees because it's seen a bit as the the golden bullet, but we need to operationalize how this is being developed for the different streams and a common framework could be set through the Circular Economy Act. And finally, also relating to other questions from members of the committee, we need to talk about the treatment of prevention and reuse activities within reuse so that at the minimum they are not disadvantaged as they currently are when they are asked to pay several times fees into EPR systems for a product that is actually not new. The second one is the free movement, how to ensure that free movement across the single market. I think there it's really key to think about waste classification. So in the end we need a clear predictive pathway from waste to product status.
We have only for a few handful streams EU-level end-of-waste criteria. So we need a kind of horizontal methodology to developing more of those and where this is not possible, we need a mechanism to mutual recognition between different member state assessments. Third one was about the low-hanging fruits and how to tackle upstream and reuse measures and targets. I think most of those discussions will have to be sector-specific. So together with the Circular Economy Act, you are expecting the Commission to table a revision of the waste from electric and electronic equipment, so that's the first opportunity to spell that out how that can work.
I think there is a broad understanding that we need to focus on targets but also mechanisms that not only lead to recycling bulk materials, but to have more granular targets and mechanisms to recover products that are actually can be reused. And one idea is really for companies that are offering for these kind of reuse channels a reliable take-back system, why do you first classify these products as waste? You could consider them to classify them only as waste after the sorting stage when it's clear that they actually go into recycling and not into reuse.
The low-hanging fruit is for me the VAT discussion. It sounds a bit counter-intuitive, but I want to be clear there were proposals on the table that you can do with a targeted review of the EU VAT directive because member states already have the flexibility to apply reduced rates via an annex. We are asking for a coordinated use of existing flexibility, not full harmonization. And there could be additional guidance like we already have for repair services. It's just that the uptake currently is inconsistent because member states don't understand the implications that by reducing VAT rates and applying them together with a margin scheme, you actually give companies the possibility to expand these circular business models and actually also expand the tax base for that.
And it would help them to increase cost competitiveness compared to selling new products. Finally, the global level, how do we tackle unfair competition at the EU border? Don't expect me to give an answer in the remaining minute, but I think there was a fair notion. We have something like the carbon border adjustment mechanism that addresses carbon leakage. Currently, there is no equivalent mechanism for circularity.
And I think the first step is to acknowledge that asymmetry through the Circular Economy Act. There are mostly different standards when it comes to waste exported and materials imported. That's where trade policy still have a role to play to gradually find a common understanding what kind of standards, not only for secondary raw materials in terms of the quality that they need to be fulfilled to be allowed into the EU, but also the other way around, what kind of refurbished products can actually enter the market and can be exported from the EU to third countries. I think there's a lot of way when we are focusing the discussion about the economic opportunities for both sides, for both partners in this space. Thank you very much.
Josep Puxeu
Gracias, gracias presidente. Yo rápidamente porque todas las intervenciones han sido muy valiosas, pero yo repito mi idea inicial de que más regulación no es sinónimo de más eficacia. Y la experiencia, como decía el comisario Potočnik desde el 2015 hasta ahora, pero yo diría mucho más, desde los últimos 25 o 30 años, es que hemos evolucionado de una tasa, de un impuesto, a un compromiso. Y eso es lo que hay que seguir elaborando en la nueva legislación, que debe basarse, por supuesto, en elementos de eficacia y de simplificación y no puede ser de otra manera, no lo concibo de otra manera, que desde el compromiso público-privado. Los elementos de reducción de materiales, de ecodiseño, etcétera, etcétera, hay que hacerlas de acuerdo con la demanda del consumidor y de las posibilidades técnicas al alcance de las industrias.
Y hay que hacerlo con periodos transitorios y con inversión. En la gestión de los propios materiales se necesita inversión y en estos últimos tiempos, incluso con las inversiones previstas en los Next Generation Funds, no se han dedicado en, no diría en absoluto, pero en poca medida en avanzar en nuevas tecnologías, nuevas capacidades y nuevos sistemas. Preguntan ustedes ejemplos prácticos de qué es lo que se debería, a nuestro modo de ver, hacer de forma unificada. Yo he puesto encima la mesa algo muy básico: los datos.
Los datos, la transparencia, la trazabilidad, la consolidación de un mercado único se basa en esa información y no en barreras. Por tanto, ese sistema unificado de datos a nivel europeo basado, insisto, en controles y auditorías independientes es una necesidad inminente. Ahí estaría lo que han dicho mis colegas de los esquemas de transporte, categorización de materiales, etcétera, etcétera, que tampoco están de ninguna manera armonizados y en esa vía deberíamos trabajar. Después también quería hacer referencia, porque alguno de los miembros del Parlamento lo han puesto encima de la mesa, ¿qué pasa con la valorización de los materiales? Pues que evidentemente están sujetos a los flujos del mercado.
Yo he puesto el ejemplo de la caída brutal de valor de los productos en finales del año pasado y la subida espectacular fruto del cierre del estrecho de Ormuz. Bueno, pues las empresas europeas deben trabajar en ese escenario complejo y deben hacerlo con la necesidad de la rapidez que debería, aquí sí, la Comisión poner en marcha a nivel de observatorios y de toma de decisiones de prácticas distorsionantes del mercado. Lo hemos hecho con flujos financieros, se ha hecho con materias primas o se ha intentado hacer con materias primas agrícolas que tienen un impacto brutal en el hambre y FAO lo ha puesto encima de la mesa y, por tanto, deberíamos salvaguardar los emprendimientos dentro de nuestra vieja Europa de estas turbulencias algunas veces claramente especulativas y destructivas de tejido productivo europeo. No hay incentivo para invertir cuando estas distorsiones te dejan fuera de mercado. Por tanto, habría que estudiar claramente cuáles son los mecanismos de defensa y de respuesta.
Acabo diciendo evidentemente que reducción y reutilización están en los objetivos, pero esa filosofía debe ir siempre acompañada del convencimiento, insisto, y por ahí entendemos que debería ir la nueva regulación del servicio a los ciudadanos, no de un elemento inflacionario que a veces por bienintencionado o utópico acaba repercutiendo en más costes para el consumidor y de difícil, difícil implementación por parte de las empresas. Gracias.
Thank you. Last speaker, Malte Hoffmann.
Mareike Hoffmann
Yes, I would like to start with the question why so many targets, environment targets were not reached although there is quite a good legislation. And I would say that a lot of targets were not reached because they are not binding for specific actors and therefore we consider it really important to make targets binding. I can show you an example from Germany. There we have fundamentally different systems between batteries and electronics. And for the batteries we have a collection rate which is binding for the PROs and this rate is fulfilled every year.
And for the electronics we do not have PROs and we do not have a binding collection target and there the target is 65 and we are in Germany below 30% at the moment. And it's more a disincentive at the moment because the producers have to pay for all the devices which are properly collected. And yeah, therefore we should set the opposite incentive. We also commissioned a study on the German system for electronics. If you like, please contact me.
The study also showed that binding targets would make a significant difference by collecting more and recycling more. I also would like to explain why we think that the participation of producers in collective PROs is so important. Again with an example from Germany, there was a battery regulation implementation and in the battery regulation we had an eco-modulation, but in the implementation on national level it was allowed that producers could also fulfill their producer responsibility individually and so it's really easy for producers which produce impactful batteries to simply not participate in a PRO and then eco-modulation would completely run into nothing. Another problem is that without PROs there are no fees for the producers where we could also use this contributions for supporting reuse and repair. There was another question on illegal imports.
We we see on the on the online platforms not only infringements concerning EPR but also on many other environmental laws. There were tests that showed 100% violations on of online offers regarding pollutants requirements and yeah, therefore we think that it's really important to make online platforms also responsible for the offers and we need two things. First, they need checking obligations before they offer the possibility to buy products and in addition, if they fail to check properly, they should also be liable for the offers. Then there was a question on how reuse could be promoted and we think for example for the electronics there is a high potential. Almost half of the electronics which go to the recycling centers are still working and around 20% have still an economic preparation for reuse potential and we think it's important to set reuse preparation for reuse targets on the PRO level which continuously increase, but we also need investments through EPR contributions into reuse and repair infrastructure.
And then I want to explain what I what I meant by reuse centers. We have a competition in Germany where we award recycling centers which already do a lot for reuse and I know that there are also best practice examples in other member states and these recycling centers they separate a lot of products when they arrive on the on the site either by cooperating with reuse actors or by having a second hand store directly at the site.
Speaker 13
Some centers only have a little corner where reuse is allowed, but there are several possibilities to bring this reuse strategy to the recycling centers. And then there was a question on low-hanging fruits, and I would like to mention repair bonus as a low-hanging fruit, and the online platform liability and the binding reuse targets. And yeah, maybe as a last point on harmonization, there was a question on best practice. We consider that France is a really good example because they have EPR for many different products. They have contributions for reuse and repair and the repair bonus.
And yeah, eco-modulation is a really good measure to harmonize within the EU.
Pierfrancesco Maran
So thank you for the panelists for your contribution. Now we skip to the second panel, that is supporting innovative approaches and delivering and implementation. We have four speakers even in this round: Catia Bastioli, Chief Executive Officer of Novamont and President of the Italian Circular Bioeconomy Cluster SPRING; Emmanuel Katrakis, Director of Public and Regulatory Affairs at Galloo Group; Hilde Sibreg, Senior Policy Advisor Circular Economy from Dutch Banking Association; and Marie Castelli, Public Affairs Director at Back Market. We start with Catia Bastioli. Welcome, and you have the floor for eight minutes.
Catia BASTIOLI
Thank you for the invitation. I would start with the concept that circular economy is not about managing waste better. It is much more. It is a regenerative system, our opportunity to decouple growth from the use of finite resources. Circular economy is based on two distinct material cycles: technical materials, mainly from fossils, which must remain in continuous use loops to preserve their value, and biological materials, which can return to nature and regenerate ecosystems and soil quality.
I'm dealing with the second part. For biological materials, circularity means using biomass efficiently, valorizing organic waste, and regenerating natural capital. It does not only improve existing systems. It creates new value chains connecting agriculture, industry, and local ecosystems. These systems are territorial by nature, but scalable at European level.
We already have the knowledge and technologies; the priority now is to enable and scale them. The question is why we are not going fast and why we are so slow. The challenge is to deal with the complexity, with the cultural change of all of us, passing from a linear to circular mindset. This requires that policy frameworks support integrated territorial projects, allowing space for regulatory experimentation and dynamic evolution. I pass to points that from our point of view, from my point of view, are very important.
Therefore, first, organic waste. We need a fully to fully implement separate collection of bio-waste across Europe, giving full effect to the Waste Framework Directive, which is not the case. Bio-waste is one of the largest and most strategic resource streams, yet only partially captured. Indeed, according to BIC and Zero Waste, the capture rate of food waste across the EU stood at only 26%. What we need, we need to introduce specific targets for bio-waste recycling, invest in collection and treatment infrastructures, ensure high-quality streams, reducing contamination of non-compostable materials, and having EPR systems to monitor and manage evolution.
This is not only about waste management in this case, it is a key building block for circular bio-economy systems, producing high-quality compost and biomethane, restoring soil, supporting sustainable agriculture, but it's also recovering precious elements for soil like phosphorus, nitrogen, potassium, and it is also a basis for other biochemicals, which start a new type of chemistry, a sector very critical at this moment with a lot with a big crisis. The Italian experience shows that integrating compostable materials with organic waste collection can significantly improve performances. We have the Italian case that today looks at a 72% of percentage of food waste collected. The second point is bio-based, biodegradable and compostable solutions to be promoted where they enhance system functionality. This means targeted applications, such as, first, products in contact with organic and food waste, where compostability could facilitate collection and recycling, improving quality and quantity also of other streams.
Second, agriculture, where biodegradability in soil allow to avoid accumulation of microplastics. Three, application sectors where biodegradability could avoid risks related to certain dispersion into water and soil. We can look to phytosanitary products, bio-lubricants, cosmetic ingredients. These solutions reduce pollution risks, improve end-of-life management, support the use of renewable raw materials and new value chains. Point three, bio-based residues coming from bio-based industries.
We must remove regulatory barriers that limit the valorization of bio-based residues. Today materials rich in organic matter and nutrients are often classified as waste or sludge and cannot be reused. This lead to a systemic loss of resources. We should allow their use as fertilizers when quality criteria are met, introduce dedicated classification, such as NACE codes for bio-based industries, enable their use as feedstocks for bio-products. In many cases, the limitation is regulatory, not technological.
And four, finally and very importantly, we need specific measures to support integrated territorial projects. The circular bio-economy does not scale through isolated investments. It scales through projects that integrate entire value chains at local level. This require coordination between regions, industry, agriculture and infrastructures, public-private collaboration and instruments designed for system projects, not single technologies. We should support territorial lighthouses projects as demonstrators, replication through European networks of interconnected regions, alignment with existing platforms such as CBE JU.
This is essential to move from innovation to industrial scale. To conclude, the Circular Economy Act can play a key role in shaping Europe's industrial future, not only as a waste and recycling policy, but as a driver of systemic transformation. Turning the circular economy into reality means activating interconnected lighthouse projects across our territories, where local specificities become drivers of competitiveness, resilience and regeneration. At a time of geopolitical instability, resource scarcity, climate pressure and growing social challenges, fully delivering on this vision is not only a necessity, but a unique opportunity to strengthen the European Union's long-term competitiveness. Thank you.
Pierfrancesco Maran
Thank you. Second speaker is Emmanuel Katrakis, Director of Public and Regulatory Affairs at Gallo Group.
Emmanuel Katrakis
Chair, honorable members of the European Parliament, thank you very much for the invitation. I'm Emmanuel Katrakis, I'm working for Gallo. Gallo is a recycling company which is based in Belgium. Trying to see how it works. Ah, okay.
Ah, just before. Which is indeed based in Belgium. We are 85 years old company and we have sites in Belgium, France and the Netherlands. And we have, if we look at the site just before, the slides just before, we have that peculiarity that our site is located at the frontier. We have plenty of sites, but the biggest sites that we have and where our headquarters are located is at the frontier between Belgium and France.
And thus for us, we are living the internal market on a daily basis and making sure that we have an harmonization and a circular market that works is absolutely essential. I'm going to go through what we recycle, which is the slide after. We are recycling metals and we are also recycling plastics from different waste streams. And I'm going to also to relate to what the other speakers have said and on which I'm very much agree. We are recycling indeed metals from ELVs, end-of-life vehicles, e-waste, so electronics, plastics from those streams, end-of-life ships.
And we are also recycling what we call residues from mechanical treatment. So we are going to recycle the waste of other recycling facilities. So we have developed very advanced recycling technologies to be able to recover those different materials. Next slide, please. Yes.
Yes, this one. Thank you. Simply because when we are recycling waste, and again, I'm speaking about waste in the sense that it's at the end of the useful lifespan, so before there is indeed repair and reuse, but we are going to face different market failures. For instance, when we are recycling a car, a car is 20 years old, so we are going to face situations that are different than when we are recycling e-waste, electronics, which are obviously, which has a shorter lifespan. Ships are obviously a different animal because they have a much longer lifespan.
So when I go to the next slide, because yes, that was, when I'm going to go to my next slide indeed, I'm going to go through indeed what we have already discussed, the fact that we have a circular material use rate with the objective to double that rate by 2030 from 12 to 24 percent. And I agree that's a very ambitious target and despite 10 years of political effort, we have managed to move from 1 percent of the last 10 years.
Yet I think it's an absolute chance to have such basically target to be able to measure progress especially in waste streams for which today the recovery rate is extremely low. So next slide please. Thank you. Yeah completely. So I'm going to go through indeed a number of things that have been already mentioned but I want to be a slightly more practical.
Why do we need pull measures for instance to build circular markets? We need first indeed to make sure and acknowledge that we have market failures. I'm going to take the example right now of plastics we have had the and we are still in the crisis with the Strait of Hormuz oil prices have indeed increased so we got a lot of requests about whether that has that was making plastic recycling more competitive. That was not actually very true but what tells is that we cannot depend on geopolitical crisis to have competitive circular markets. And this is why we need those pull measures.
Those pull measures are valid for recycling they are also valid for reuse and they take the form for instance of recycled content preferably recycled content from waste that is collected and recycled within the EU and I want here to make the link with what was basically said by Pascal Arimont the the member of the European Parliament who said we do we do have indeed recycling facilities which are basically and that's the case indeed facing unfair competition from imports of basically cheap plastics from non-EU countries. So when we set recycled content targets be it for plastics or for other materials that could be steel or aluminium for instance it's also important to make sure that there is also that that preference that is given. Green public procurement it goes without saying we do have indeed a lot of public money so green public procurement based on robust scientific criteria shall foster circular materials but also circular business models. And fiscal incentives we understand or I understand that it's obviously a matter of shared competence of exclusive competence but it's really the price signal for the final consumer is absolutely essential. And today still today when we go in different supermarkets or wherever we are going to procure goods there is not or we don't see enough that price signal in taxation.
So the objective is not to put more taxes but to make sure that circular products are less taxed. Second I work for a recycling company it's what we've been operating for 85 years we are family owned. Faster permitting. That's absolutely essential. Simplification doesn't mean indeed deregulation but it means more certainty as to whether when we want to build a new plant we are going to have a yes or a no.
And I'm insisting on the fact that the faster permitting shall go beyond only projects that are dealing with critical raw materials. At Diallo we are also looking at CRMs critical raw materials when we're recycling e-waste we recycle PV panels for instance but there are plenty of other recycling and waste management facilities that would benefit from faster permitting. Priority to circular and climate friendly projects um that could be linked obviously to to to that but that can also be linked to a plea that we have been making for quite some time to link policies together. We are going to revise right now the EU ETS um framework that is applying to energy intensive industries and we are going to have at the same time the circular economy act.
It's absolutely essential to bridge basically the two to make sure that we are going to give more certainty to the entire value chain. That bring me to my third point which is think value chain. I could spend I think ten minutes, I have one minute and thirty left, but design for circularity, absolutely essential, be it for reuse, repair, recycling. It's also today a matter of life or death for waste management and recycling facilities because we are suffering a lot about battery fires. Today you have lithium-ion batteries everywhere in all your products and you have every week battery fires in waste management and recycling facilities because they are not properly handled.
So design for circularity is part of the solution to be to remove them faster but it's not only the only solution. Inclusive EPR governance. We are rightly saying that we are looking at the circular economy as a strategic and no longer an environmental policy. Actually they are both. They are ticking the two boxes.
But here inclusive EPR governance, it's also to make sure that the players of the circular economy are part of the governance of basically the EPR. So basically to have within the governing bodies of EPR recyclers, reuse operators to also look at the challenges. For instance now there is an increasing, we have said there is an increasing basically focus put on CRM recovery from e-waste that is going to come together with the circular economy act. Obviously if we set aside the metals which have a very high value when we are recycling CRMs, we need to create a business model. And here I'm not going to repeat what former Commissioner Potočnik said, but that's absolutely essential to make sure that EPR also going to drive innovation and thus together with the stakeholders which are active players within that within those markets.
Polluter links the push and the pull measures. I was mentioning before recycled content targets. They are very important. We also see quality requirements for recycling. We need to have the two.
Polluter pay principle, it's overly important especially when we're recycling we have to deal with restricted substances so we need to make sure that the we we are tackling the problems at source. Last but not least, overly important, EU-wide end-of-waste criteria that has been mentioned, very important. We need to make sure that we have a well-functioning internal market. Access to local and global markets. I'm just going again to take the question that was put on on aluminium.
The vast majority of recyclable aluminium scrap stays in Europe, eighty percent. There is only a minority that goes out and what goes out today of the EU is mostly what is not in demand also for the reason that has to do with the fact that we are recycling products that have a very long lifespan. And I'm speaking here both for the sector but also for the company that has made huge investment in recycling of aluminium by type of alloys with very advanced technologies, laser, XRT and different technologies. Thank you very much.
Pierfrancesco Maran
Thank you. Next speaker, Hilde Sijbring, senior policy advisor circular economy from Dutch Banking Association.
Hilde Sijbring
Chair, honorable members of the ENVI Committee, thank you for the opportunity to speak today. My name is Hilde Sijbring and I'm very pleased to share the perspective of the Dutch banking sector. What I would like to bring to today's discussion is a financing lens. So when assessing the circular economy we should not ask whether it raises ambition but whether it creates the market conditions that make circular business models financeable. I would consider my contribution today a success if one message stays with you today.
Circularity will only scale when circular business models make economic sense for entrepreneurs. If a business model is viable, it is financeable. And this is not only the perspective of the Dutch banking, of the Dutch banking sector. The European Banking Federation has made the same point. The circular economy act must correct market failures to create robust, profitable business cases on a large scale.
And this is especially urgent in today's geopolitical context. So from an environmental perspective, there was already broad consensus on the need for a circular economy, but today it has also become a matter of strategic autonomy. Europe's dependence on critical raw materials combined with supply chain disruptions and price volatility is exposing the structural weakness of our linear economy. And circular strategies can strengthen the resilience of businesses. From a banking perspective, in order to finance these businesses, a viable circular business case is required, and that is exactly the challenge.
Despite existing and forthcoming regulations for circular products and value chains, a functioning market for these products often remains absent. To help bridge this gap, I will focus on three conditions that are essential to make circular business models financeable at scale. Create a level playing field, embed circularity into EU financial architecture, and enhance circular data. But before turning to these three conditions, let me briefly explain why the banking perspective matters. Banks are central to financing SMEs, and for these companies, the challenge in moving towards a circular business model is not unwillingness.
It's limited time, capacity, and urgency to change a business model that still works today. These companies need both incentives and a clear perspective that circular choices will pay off. And at the same time, bank financing can only scale when there is confidence in future cash flows, repayment capacity, and assessable risks. So many circular companies cannot provide that certainty yet. They face uncertain demand, limited track record, and higher cost because circular companies often pay for activities that linear companies avoid: using recycled materials, take-back schemes, repair, clean, refurbishment.
As long as markets reward the lowest price option, circular businesses remain at a disadvantage. So this is not only about access to finance. Current market conditions still direct capital towards linear models because they often remain cheaper and more predictable. When circular business models do make economic sense for entrepreneurs, they would become easier to finance, and this is where the circular economy act can make a difference by reshaping market conditions and making circular business models financeable. Therefore, the first condition is to create a level playing field that makes circular business models economically viable and the most logical choice for entrepreneurs.
EU policy measures should focus on stimulating demand, reducing fragmentation in the single market for secondary materials, and ensuring that linear alternatives more accurately reflect their true costs. In practical terms, this can include measures such as setting minimum recycled content requirements for products containing critical raw materials, as this would create demand for secondary materials, improve the business case for recycling, and give investors more confidence that a market will be there. If ambition is too limited, secondary market development slows down, and so does circular investment. A second important measure is to integrate circular criteria into EU procurement. Given that public procurement represents around 14% of EU GDP, it can play a decisive role as a market-shaping instrument in creating predictable demand and scaling circular solutions across sectors, which is exactly the certainty that businesses and banks need to invest.
The second condition is to embed circularity into the EU financial architecture. As a level playing field will not emerge overnight, in the meantime, circular companies need EU financial instruments that help de-risk investment and mobilize private capital.
This means using guarantees, blended finance, and circular eligibility criteria. The European Competitiveness Fund is a useful example. If Europe wants circular business models to scale, circular criteria should be embedded in such instruments from the start. The Dutch plastics recycling sector shows why public financial support and market creation must go hand in hand, as in the Netherlands public support has gone into recycling capacity. But when the expected demand for recycled materials was not secured through legislation, recyclers were left competing mainly based on price with cheap virgin materials.
Demand fell, bankruptcies followed, and recycling capacity was lost. So public money can help bridge the early and scale-up phases of circular investment, but it risks being wasted if it's not accompanied by rules that create a level playing field. The third and final point is to enhance circular data. Private capital can only flow at scale when the risks and returns can be assessed consistently. This requires clear and harmonized definitions of circular activity and reliable data on matters such as material use, value retention, and end-of-life performance.
This will become essential for assessing companies' exposure to, for example, supply disruptions and price volatility. So to conclude, circularity will only scale when circular business models make economic sense for entrepreneurs. When the business case is viable, it becomes financeable, and the CE Act can play a decisive role in creating those conditions. So from the perspective of the Dutch banking sector, that means three things: a level playing field, circularity embedded into EU financial architecture, and enhanced circular data. Thank you very much.
Speaker 39
Thank you. Our last speaker is Maria Castelli, Public Affairs Director of Back Market.
Marie CASTELLI
Thank you very much, Chair, esteemed members of the committee. Thank you very much for the opportunity of speaking today. I will start by presenting briefly Back Market, because I'm not sure everyone knows us. So Back Market is a French company created 12 years ago and is a marketplace that is specialized in selling refurbished tech. We work with professional refurbishers, most of them being European SMEs refurbishing tech, and we help them reach consumers.
Since the beginning, we've grown quite extensively and we are now present in 17 markets across the world, 13 of them being in Europe, but we also address the US, Japan, and Australia, which I believe is really a sign of the potential of circular models and the fact that, as you just said, some business models make total sense for entrepreneurs and we are a good proof of it. Another proof of it is the fact that we are what's called a unicorn, so that shows that a lot of investors do believe in the potential success of refurbishment and the growth of circular economy at global level. But in order of course to achieve these objectives and break the linear economy in the consumption of goods and particularly on electronics in my fields, we need to have obviously ambitious policies being created.
And one thing that has already been said, but I'd like to repeat, is what we've seen of what's coming on the Circular Economy Act so far is a bit frustrating, as the political objectives that are stated in the coming act fail to address a key pillar of circular economy, this pillar being reuse. Reuse and refurbishment are higher in the waste hierarchy, as a lot of people have said already, and we believe it's too bad that it's not addressed enough in the Circular Economy Act, that would be kind of better called the Recycling Act when it comes to what seems to be planned. Only focusing on recycling is not enough. A lot of speakers have said it already, but I'd like to remind it. In many sectors, secondary material will go outside for products manufactured outside of the EU.
That's the case for our sector. Tech is manufactured in Asia, not in the EU, so recovering material is not benefiting to EU manufacturers. The complete recovery of raw material from ICT products is rarely achievable, and recycling alone is not capable of boosting collection of waste and used devices. We've measured that customers are way more incentivized by take-back schemes and the possibility basically to make money than by simply giving away their devices. So once I've said that recycling is not enough, I want to emphasize on something else.
Reuse is really a strategic tool for Europe. As one of the speakers says, it's really good news that the circular economy is now considered strategic in the European agenda, but it's really important to understand that reuse really fulfills most of the Circular Economy Act agenda. It improves competitiveness, for example. As it's been stated already, reuse is creating jobs, local jobs, so that's really promising, and even more jobs than recycling. Don't get me wrong, we don't consider recycling should be in competition with reuse, but we want to emphasize that reuse is really critical in creating this sovereignty and this European competitiveness.
And in a world where most of the products, in electronics at least, are manufactured outside of Europe, the potential for job creation of reuse is really critical and interesting. It's also a way to reduce our dependency on raw material, as of course this type of products are raw material intensive. It's also, as I said, an opportunity to improve the collection and the recycling through professional channels. If a lot of customers are giving their devices back through take-back schemes, it's going to help get better management of what's left to recycle and make sure it's in professional channels that are actually going to the recyclers when relevant. Of course, reuse is particularly relevant when it comes to carbon footprint.
To give you an example, a refurbished smartphone is on average 88% less carbon emitting per year than a new smartphone. When we know that digital is going to be accountable for 7% of the global warming emission by 2030, data centers excluded, this is critical.
Speaker 51
And of course, reuse is a way to preserve purchasing power as refurbished and reused devices are less expensive than new devices. So when I said that this is really a strategic tool and it really makes sense with the agenda of the Circular Economy Act, the moment is came to make a few recommendation on how to deploy reuse through this act. Well, first of all, we want the act could be, we think the act could be boosting supply. One of the key challenges of reuse and refurbishment is access to supply. There are too many devices that stays in people drawers, if I have to give you an image.
It's considered that 700 million devices are staying in European customers' drawers until they are worthless and discarded. We need to rework the collection schemes and EPR in order to maximize the reuse potential and the recycling rates through local collection and through sorting the products by refurbishers before sending them to recycle, so that recyclers actually only receive products that are relevant to recycle. We also need financial incentives for take-back schemes, cause as I said, if we want to get people to get those stuff out of their drawers, we need to incentivize them, that's how it works. And last but not least, we need to invest in public awareness campaign around those take-back possibilities. There are too many situations where people don't know what to do with their devices.
They would be willing to give them back for reuse, but they are not informed. So investing in public awareness shouldn't be minimized, it's really critical. On top of it, and it's been stated already, we need to revise the functioning of the single market itself. The fact that there's a product act coming approximately at the same time as the Circular Economy Act is a true opportunity to align legislation and create a true single market for second-hand and reuse by adapting all the legislations that have been tailored to new to the existence and the circulation of those second-hand devices on the market. And last but not least, we need to rework the EPR frameworks.
It's been said already, but there are huge challenges in the governance of this frameworks and I join you in asking for inclusive governance of these schemes. But we also need to improve the efficiency of those schemes. We believe a one-stop shop, same as the one that's been creating for VAT at EU level, would improve compliance with the EPR schemes, hence grow the money that is collected by EPR schemes, which would be very interested in order to be able to invest in reuse on top of investing on recycling. And we of course should avoid double fees on everything that's second-hand. And I'm going to stop there.
Pierfrancesco Maran
Thank you so much. Now we move to the Q and A session by the political representative of the group. Every member of the Parliament has 90 seconds. We start with Letizia Moratti from EPP.
Letizia Moratti
Thank you chair and thanks to all speakers for their contribution. The discussion has shown how essential circular economy is for Europe's competitiveness, resilience and sustainability. And in this context bioeconomy is not just one sector among many, it's a key enabler of the circular transition and should play a central role in the next generation of European policy. We heard about the need to break down silos and strengthen cooperation across sectors. Could you share a concrete example of such cross-sectoral collaboration works in practice and what in particular can generate?
And as Europe looks to scale up circular solutions, what are the most important governance tool and financing mechanism needed to accelerate investment and deployment? And finally, with the upcoming initiatives of the European Commission, where do you believe the circular bioeconomy should be anchored to maximize its strategic impact across EU policies? Thank you.
Delara Burkhardt
Thank you so much for the speakers for an really inspiring and insightful second round. I take with me that many circular options and solutions already exist, but they remain stuck in niche markets. And the question is or the problem is that often they are too busy to implement change to actually show up in this complex legislative process so we don't often hear the practical views on what is blocking innovation. So I really take a lot of that with me. So what we know and this was clear in every of your statement, the problem is not a technological one, it's not only a demand one, it's mostly a scaling problem we have here and this is starting a vicious circle again because without scaling up the costs remain high and higher costs are always used to lower ambition so we really are in a difficult situation.
So I would maybe if you can put it in a nutshell again, so what framework conditions are needed to give circular industries the the confidence to to scale up? And can you maybe elaborate a little bit more on how public procurement can act as a demand signal in in this and that is not something just waiting for the magic to happen but actually help to to scale up the processes? And would you share my my summary that if we get the scaling right, the affordability will follow naturally? That would be my question. Thank you.
Anne-Sophie Frigout
Merci aux différents intervenants pour leur présentation intéressante qui permet d'éclairer le débat. Chers collègues, quand Bruxelles parle d'économie circulaire, les entreprises européennes s'attendent à recevoir une nouvelle avalanche de normes, de formulaires et de contraintes. Mais pendant que la Commission produit des milliers de pages de règlements environnementaux, nos usines ferment en cascade, nos chaînes de valeur quittent l'Europe et notre dépendance aux pays tiers continue de s'aggraver. Le futur acte pour une économie circulaire ne doit pas devenir un énième monument techno. Il doit au contraire remédier à nos dépendances, notamment vis-à-vis de la Chine, de laquelle nous dépendons massivement pour notre approvisionnement en métaux stratégiques indispensables aux batteries, aux véhicules électriques et aux technologies numériques.
En 2023, un rapport de la Cour des comptes européenne révélait que 77 % du nickel, 84 % du cobalt et 100 % du lithium provenaient de l'extérieur.
Face à cette dépendance, nous avons besoin d'un véritable choc de souveraineté industrielle. La France montre la voie avec un exemple particulièrement prometteur : l'entreprise Mecaware et son projet d'implantation dans la batterie vallée des Hauts-de-France utilise une technologie innovante qui récupère le lithium, le nickel et le cobalt contenus dans les batteries usagées afin de les réinjecter dans la production de nouvelles batteries. Elle transforme ainsi nos déchets en ressources stratégiques. Soutien à l'innovation industrielle, développement de nos filières de matières premières recyclées et renforcement de notre souveraineté, notamment via la préférence européenne, voilà ce dont nos entreprises ont besoin. L'économie circulaire ne doit pas être le dernier chapitre du Green Deal, il doit être la première étape de la reconquête industrielle française et européenne.
Ana Vasconcelos
Thank you, Chair, and thank you to our speakers for their insightful presentations. Europe imports almost 100% of its heavy rare earths from China, while current recycling rates for materials such as lithium and rare earths within Europe remain below 1%. Addressing this asymmetry is about more than the environment, it is about security, strategic autonomy, and competitiveness, as, by the way, Mario Draghi and Enrico Letta stated in their reports. Currently, having 27 divergent national regimes creates legal uncertainty and constitutes a primary barrier to competitiveness. So, it's obvious that the circular economy act's main priority has to be to create a true single market for secondary raw materials with harmonized end-of-waste rules and recycling that finally pays for itself with increased demand.
So, can you help us identify the EU rules that unintentionally discourage circular innovation and investment by making it harder to use secondary materials? And Ms. Hilde Sibering already addressed this, but I'm interested also from hearing from the other speakers, we have many successful pilots, what is the biggest obstacle preventing circular business models from scaling across the 27 Member States? And also, the European Commission recently proposed as part of its environmental omnibus to suspend the mandatory appointment of authorized representatives for the extended producer responsibility obligations. Do you think that the Circular Economy Act should create a digital EU one-stop shop for EPR and enable models like marketplace on behalf? And how can we design EPR around measurable outcomes while avoiding administrative complexity?
Thank you.
Rasmus Nordqvist
Thank you, Chair, and thank you to the four speakers. I think it's really interesting, compared also with the first panel, it's so obvious that circular economy is really our way out of resource dependency we see right now. And I think that should be something we carry in in the discussion with the Commission on the Circular Economy Act, that this is really about also how do we push for the for the to get out of this dependency and create more resilience also for our business for our businesses. And also keeping in mind that what we call just raw materials today will become critical raw materials if we look at the building sector. We just take sand as if it's nothing, but if we don't actually start thinking a total another way, it will become really a critical raw material in the near future.
I think very interesting to hear from from from the banking sector as well and I think it's so important that we really work on this point on how to make circular economy a bankable project. I think that is is key here so to get the businesses on board. And I would like I mean you had some very good points but I also think there's a point on a business not relying on getting their raw materials from a third country outside of the internal market who actually have their own raw materials in in circle. I mean isn't that also a security for for the financing part when when you have to vet a company asking for financing? Could that be also kind of scorecard we could we could enable for for it to be be easy easier for for the circular businesses?
So, so there's a lot to do there.
And and then I would like to ask Back Market as well because I'm so so impressed with what you have done also because you have thought a scalable business model since the beginning. And I think to be a gazelle today that that's the proof of that. But could you perhaps elaborate a bit more on how did you approach that that you actually made it because we have seen other who have done smaller interesting project on on refurbishing of of electronics but the way you have scaled it up was that the intention from the beginning or or how did you work on the whole business model side because that will be as important as as talking about all the regulations around the resources. Thank you.
Annalisa Corrado
Thank you very much. I will speak in Italian. Grazie davvero per questa per questa carrellata veramente interessante di di questioni di progetti e anche di proposte. Io trovo molto interessante l'idea illustrata da Catia Bastioli di lavorare su progetti faro proprio perché come si diceva prima abbiamo bisogno di fare scale up abbiamo bisogno di industrializzazione delle innovazioni ma in un settore così fortemente dal valore così fortemente innovativo e così difficile da standardizzare e così anche relativo alle condizioni dei singoli territori in cui poi i singoli progetti si calano mi sembra importantissimo per avere dei casi studio costruirli in questo sistema in questo modo. Anche perché appunto qui non si tratta esclusivamente di sinergia industriale ma che già è un concetto sufficientemente complicato ma addirittura arriviamo a fare una sinergia tra industria agricoltura qualità del suolo resilienza dei nostri territori insomma quindi la la situazione si complica ancora di più.
Quindi magari tornare un attimo su questa idea del del progetto faro potrebbe essere utile e credo che potrebbe essere utile anche al discorso che si faceva prima della bancabilità. Cioè finché non abbiamo casi studi concreti capaci di arrivare ad un livello anche di industrializzazione alto sarà difficile suppongo per una banca finanziare la moltiplicazione di questo tipo di questo tipo di progetti. E l'ultima cosa è un po' distante da questa e di in relazione al discorso fatto sulle materie prime sul mercato unico e anche sulla necessità di difenderci dalle la dispersione di materiale utile per la nostra industria qual è il vostro pensiero sul dibattito a cui è arrivato in questo momento il CBAM? Mi sembra molto interessante saperlo. Grazie.
Sara Matthieu
Yeah, thanks a lot, and thanks to everyone that spoke on the second panel as well, very interesting. Maybe just to first say, when it comes to the presentation of Mr. Katrakis, well, I've been on your factory floors twice now, and I have to say that I'm quite impressed with what you have accomplished. And it's really great also to hear that the legislation that we just passed last week in the plenary is really going to help your business case when it comes to both the feedstock, but also of course the demand for recycled content. But maybe going a bit deeper into that, because of course you mentioned both a level playing field, but also the need to talk about recycled content made in Europe, or as we Greens are now calling it, remade in Europe as a business case. Well, we do now have the action, the recent action of the Commission of course when it comes to the customs codes to make sure that the level playing field is more protected when it comes to false recycled content coming from China.
But I'm really also wondering how you see then the made in Europe component. Is that something that we should try and fix within the Industrial Accelerator Act? Do you rather think it would make more sense to do it in the Circular Economy Act? How do we do this without creating too much of administrative burden for companies to prove that it was actually recycled in Europe? And then maybe both to you, Mr. Katrakis, but also to Ms. Castelli, you talked a lot about inclusive governance when it comes to EPR.
Could you be a bit more specific on how you see that then? When it comes to the end of life of vehicles of course we had the very bad example of cartel formation that was penalized by the Commission. I'm really wondering, you know, what kind of governance models would then work? Would that be within some sort of advice committee? What would you need to have enough influence there?
How could we guarantee that there's enough transparency when it comes to fees, methodology? I would be interested in a more granular approach on that from the both of you. Thank you.
Pierfrancesco Maran
Thank you, many questions even this time. Now we go back to our panelists, three minutes each. We start with Catia Bastioli.
Catia BASTIOLI
Thank you, I answer first to the question of MEP Letizia Moratti on bioeconomy. You stressed the point of interconnection of sectors and some examples. I feel that if we look at local areas where there are problems, for example, I could imagine to consider Sardinia, where we have problems of water, energy, development at industrial level, good agriculture. So it's very relevant to put to connect together infrastructures. So electrical grid with the water system and the agricultural network.
And what is feasible is feasible that we can use scraps and byproducts for the creation of biorefineries, but energy can be taken from renewable energy. Renewable energy can be the excess of renewable energy can be used for management of water for agriculture in order to have a pumping systems and storage systems for grids, for electrical grids, having water for agriculture, so improving agricultural sector. And from the other side, having the possibility to store energy and to have also economic advantages because the consortia, the farmers consortia can have money from the dispatching system of the electrical grid. So it's a systemic approach where the potential of improvements is coming from the experiment in the local area.
So it's an incremental innovation which permits to save money, resources and learning together means to increase competitiveness of the local areas overcoming problems of many years of this type of territories. So this is an example of what I intend for interconnection of sectors. Then about governance and financial mechanisms and I feel that public private partnerships are essential. The experience on circular bio-based European joint undertaking, it means from my point of view it's a very good example because this type of initiative costed to Europe 1.3 billion of investment in bioeconomy but it was able to drive 3.2 billion of investments of privates. It gave 100 bio-based products, new products, 220 projects, 250 materials and ingredients which are new for Europe.
So it's a very important system. Of course again this is a very important system but it has to evolve in order to manage not just simple technologies and projects but to scale to the what the lighthouse projects. So this is very important public private partnerships for lighthouse projects. And then finally the other question was what are the looking at the current EU policy agenda where should the circular bioeconomy be primarily anchored? The circular economy is the overarching framework but it is not a single policy domain.
The circular bioeconomy must be embedded across multiple dossier because it sits at the intersection of agriculture again, industry, environment, energy and chemistry. That is why is already relevant in initiatives such as environmental omnibus, the review of the single use directive, the taxonomy framework, the biotech and bioeconomy strategies, the industrial accelerator act, the CAP post 2027 and even the criteria of raw material act. So it's a lot of opportunities that we can use today and the bioeconomy, the circular economy act should deliver also through this type of opportunities in legislation. Finally I would say about I there are some other questions looking at the difficulty for innovators to grow and to remain in niche areas. This is exactly the problem and the acceleration is fundamental because you mentioned many times China and this is the crazy thing.
From one side Europe invested a lot, I see in bioeconomy 5 billion of research, a lot of projects and products. China took all these elements but they created a policy on bioeconomy and a lot of legislation and pushed the capacity increasing the depths in from 2016 to 2026 they doubled the depths and all the amount of money is injected in capacity in production capacity also in our sector.
So the risk is to innovate and to have the commoditization of products just when they're still under development. So this is killing and desertifying industry. This is the big risk we have. So we need to be faster in identifying the new products and so it means that we need to have a bioeconomy strategy with codes which permit to identify the new products and to be different from the traditional products because traditional products are managed by traditional to reduce impact whereas in this new sector we have to push and we are not pushing, we are decelerating and this is a big problem. Thank you.
Emmanuel Katrakis
Yes, so I'll try to address most of the questions. Cross-sectoral collaboration, I'm going to take two examples. I mean at Galloo we've been recycling plastics for at least 30 years and it goes without saying that while we worked on the technology, when we started to do that job that was also to respond to a plea from carmakers at that time who were not that willing to advertise the fact that they were going to use recycled plastics but that were interested in the fact that recycled plastics could be at that time cheaper and still today than virgin polymers. So we've been working on developing grades for the automotive industry since the last 30 years and I can relate indeed to what Sarah Mathieu has just said, the passing of the ELV regulation last week and the recycle content targets for plastics in cars are existential for the industry as they were existential for the packaging recycling industry simply because we cannot depend on oil prices to have a business case. Now a more association I would say collaboration, I'm also a board member of Recycling Europe and recently we have been issuing together with an NGO and together with the steel industry a common statement on basically recycling ships within the EU.
And I think here we are also here it's a plea to the European Commission to level the playing field and help more ships being recycled in the EU and not being beached in other places with lower standards. Now there was a question on how we scale up. I think we all have the same problem whether we speak about recycling or reuse and I'm not going to challenge at all the waste hierarchy and again there is no here potential competition but indeed for certain materials as long as you are not competitive with linear business models you simply cannot scale up even if you have the technology. So here you need incentives and the incentives will be necessarily different between reuse and recycling but at the same at the end of the day without the incentives it's going to be very difficult to turn an industrial innovation into an industrial scalable project. Then there were indeed testimony about basically here it was a plant in France but and in relation to CRMs I think we need to understand that if we want to build a value chain for critical raw materials that is competitive we need to think value chain because we are competing with other places in the globe and China especially that have built entire value chain from A to Z and which are indeed extremely competitive and thus are making the life of projects from recycling to the use and the manufacturing for instance of battery overly difficult.
So basically today, whether we are going to deal with that preference within the Industrial Accelerator Act, which is obviously the preferred route, or the Circular Economy Act, I would say it's not my choice. What is absolutely essential is to make sure that the two speak together. And so indeed under the Circular Economy Act, we need those incentives, economic incentives, to make sure that circular businesses, that circular materials can basically compete. Then if this is not feasible, we have also been advocating for rather complicated but still very useful mechanism. They are called mirror clauses to make sure that what comes in within the EU meet minimum standards as what we are doing in the EU, basically to level the playing field.
And so as I said in basically at the end of my presentation, we usually don't like export restriction when it comes to recycled materials because we are competing on a global market, but we also understand that we need to have indeed protection at the border. And this is obviously the role that of the CBAM, the Carbon Border Adjustment Mechanism, or safeguard mechanisms, safeguard measures that have just been implemented now for steel, and that can also help our customers to strive when it comes to competitiveness. And last but not least, there was that question about the obstacles. The recycling industry is mostly composed of SMEs. There are a lot of consolidation, there are large companies, but many SMEs.
And everything that can facilitate intra-EU waste shipment for recycling is absolutely essential. So that means obviously facilitating the procedures. That means obviously end-of-waste. We do have very few harmonized end-of-waste criteria at European level. Having more either harmonized European end-of-waste, or if it's not feasible, at least mutual recognition of end-of-waste criteria which have from member states which have been notified to the Commission is essential.
But here our plea is really to have EU-wide harmonized criteria for end-of-waste. I'm just going to quote plastics, textiles, and paper. Thank you.
Hilde Sijbring
Thank you for the relevant questions. First of all, on the question about procurement. Public procurement policies offer an opportunity in the EU to really demonstrate leadership. So alongside price considerations, societal impact and circular potential should be decisive criteria when awarding contracts. And this is credible offtake, so that creates the conditions for entrepreneurs to obtain financing.
About the comment first chapter of EU business, I would like to add that circularity should not be a separate agenda. It is actually an enabling condition for Europe's other transitions, for the energy transition, for the digital transition, for housing, for defense, because all those transitions depend on critical raw materials. And circular strategies reduce material use, so reduce dependencies, recover these materials, and will strengthen resilience. And as stated before, these will only scale when circular business models make economic sense for entrepreneurs and become financeable. To Mr. Nordqvist, thank you for the acknowledgment regarding the role of the banking sector.
And resource scarcity is indeed a financial risk. So on a macro level, our members are already looking at how geopolitical changes affect the bank. And on a company level, resource scarcity leads to price volatility, supply uncertainty and increased operational risk. So this directly impacts the business case of the clients that we finance. But companies are already anticipating.
So they are already having higher buffers, they are diversification in their supply. But for making the full transition, again, it needs to make economic sense for these entrepreneurs and therefore the CE Act, the Circular Economy Act, should play this decisive role in creating those right market conditions. Also a question about a single tool, for example within public financing. In a paper that we wrote earlier this year, we are stating that replicating instruments such as the Hydrogen Bank for circular infrastructure into a Circular Materials Bank would create offtake guarantees for recycled inputs in sectors such as construction. So such a tool would really help.
But I do would like to stress that isolated measures will only do part of the job. So we need a comprehensive package to ensure that these businesses make economic sense. So public support should reduce early-stage risk because that's what startups and scale-ups are encountering. So they help these companies into a more mature phase where the financial sector can actually take over. But when there is no level playing field, these business cases remain too weak and we can't finance them.
So I would just like to state with the one message I would like you to remember when going home: circular business cases will only scale when the business case is viable and therefore financeable. Thank you.
Marie CASTELLI
Thank you very much. I'm going to try to address a bunch of questions, starting with the one on how to scale. You've just mentioned the importance of having a viable business model. With the circular economy, a viable business model often means good pricing. Customers only go for reused devices or products integrating recycled content if the price is competitive with new.
And that's really critical. So this is really the center of what's concerning us. And when it comes to refurbishing tech devices, there are a set of regulations that need to evolve in order to help refurbishers reach the right price and quality points in order to be able to compete with new, because that's really the core of the issue, the competition with new devices. One of them obviously is the EPR scheme. As I stated in my first presentation, one of the key challenges is the access to supply for refurbishers.
There's an unbalance between demand and the offer basically on the market, making access to supply too expensive for refurbishers. So that's really hard for them to compete with new when the used product they purchase are too expensive.
So very basic economic rules, we have to grow the offer for the prices of the supplies to go down. And in order to do so, we need to improve the EPR schemes so that there are better collection schemes that do direct everything that is reusable to the refurbishers capable of refurbishing those products. It's only by scaling the supply that you're going to make it possible for them to scale their businesses because they are going to be more competitive towards new. One interesting fact is the star product in our field is Apple products, iPhones basically. Why are iPhones the one really succeeding when it comes to refurbished?
It's because they have a high residual value. And this is really what we need, and customers are willing to pay a high price for them. But that's not going to happen on every product. And as I said, in order to reach scale, we need to lower the price of operation for the refurbishers, hence access to supply. Another key element of course is VAT.
We mentioned it quite fast, but VAT is a critical tool in order to improve the affordability of all the circular products. And the circular VAT will really help grow the gap between everything coming from circular economy and everything coming from linear economy. So that can be a quite powerful tool. A powerful tool for two reasons: for lowering the price of products or for improving the margins of those having too thin margins to be bankable. So we really do consider VAT as a tool for improving pricing, but also for allowing business models to grow.
And that's a new philosophy when considering VAT as a demand tool we believe can be very powerful. And the last thing, and I mentioned it already, is the functioning of the single market. The single market has been built for new products only. And that's normal because circular economy wasn't such a thing when the rules have been built. But at the moment, there's a lot of legal safety issues for those dealing with products in the circular economy because of conformity, compliance demonstration issues that are slowing their growth.
So revising the way the single market works, hence revising NLF, that's the one in the Product Act, is also critical in order to help reuse scale at EU level. And of course, one of the questions was, is scaling affordability? But yes, it is. On the digital EU one-stop shop, it's very relevant to us. What we believe is that there are a lot of third-country sellers that do not pay EPR because it's too complex and it's too blurry and it's hard for PROs to chase them kind of.
If there were to be a European one-stop shop to which online platforms such as us could be connected, we could be capable of making sure everyone is compliant with EPR, creating a level playing field, but also growing the money collected by EPR, which would create the conditions for financing diversification, preserving recycling on one hand, but also financing reuse the way it needs to be financed on the other one.
Speaker 51
On how we succeeded to scale, thank you for this question. Well, the answer is it's because we are a marketplace. It's really hard to scale as an industry in refurbishment. The solution we found as a company is being a marketplace, investing most of our money in attracting the consumer to refurbished and relying on SMEs in order to answer the offer we are creating. And that's really the balance, you know, that works in this second-hand economy that needs to be preserved because all of those company are too small to operate alone, but thanks to the marketplace model they can be gathered in order to attract consumer and that's really powerful.
On the inclusive governance of EPR, well, EPR is governed by the producers. It's the producers, the polluters-pays principle that is applicable, but that creates a situation of kind of a conflict of interest as those managing the EPR system are those paying for it and those whose interest is the maintenance of the linear economy. We need to have all the actors of the EPR systems and of the waste hierarchy involved in the governance of EPR systems, recyclers, reuse actors, in order for decisions around how EPR works and how money is spent to be collegial between all the stakeholders. And that's it for me. Thank you.
Pierfrancesco Maran
Thanks to our speakers. Now we leave the floor to the Commission. We have Eric Mamer, Director-General for Environment. So many ideas, many proposals and many expectations for your work with the Commission.
Eric MAMER
Thank you so much, dear Chair, dear Pierfrancesco, honorable members, ladies and gentlemen. I would like to start by thanking you for organizing today's discussion on waste and the Circular Economy Act. The ENVI Committee will indeed have a key role to play on this file and therefore I am glad that we are engaging in our conversation early. And this is my first opportunity to discuss the circular economy with you and with the Circular Economy Act due later this year. I look forward to engaging closely with Parliament, together of course with Executive Vice-President Šefčovič and Ribera, as well as Commissioner Roswall, as well of course as my colleagues from DG GROW, as we take this important file forward.
Let me start by saying that the title of your event says it all. Indeed, the Circular Economy Act should be about less waste and more value. Less waste because waste is the symbol of economic inefficiency and of course also an environmental problem. More value because the circular economy is or should be an opportunity to business or for businesses and consumers alike. So where do we stand?
Why do we consider that more action is needed on the circular economy? Importantly, we are not starting from scratch. And indeed I believe that the first panel discussed this extensively. Let me focus on a few of the existing elements. You know these well, so I will be short.
It all starts with the design of products and the Ecodesign for Sustainable Products Regulation aims to ensure that product design is optimized for the circular economy.
Let me focus on a few of the existing elements. You know these well, so I will be short. It all starts with the design of products, and the Ecodesign for Sustainable Products Regulation aims to ensure that product design is optimized for the circular economy. That means optimized for reuse, repairability, and recyclability. The Commission is now implementing the first work program.
Similar product requirements are also included in specific regulations such as batteries or packaging. We have, of course, a waste management framework that aims at minimizing waste and thereby increasing the quantity of secondary materials available for the circular economy. It also defines the polluter pays principle as the basis of extended producer responsibility schemes, both as a framework under the Waste Framework Directive and in specific instruments ranging from packaging to electric and electronic equipment, batteries, and now even textiles. For example, the Batteries Regulation contains recycled content targets for four battery raw materials: lithium, cobalt, lead, and nickel. And the End-of-Life Vehicles Regulation will set targets for recycled plastic content in the production of cars and empowerments for the Commission to set targets for steel and aluminium.
The ESPR offers the possibility to set further content targets for priority products. Despite all this, of course, however, the consensus is clear. The circular economy is still far from delivering on its potential. The facts speak for themselves. Let me give you a few examples.
First, although the EU's circular economy business sector is very active, the investment gap compared to identified needs exceeds 82 billion euros annually. The main reasons lie in the fragmentation of the single market in the area of waste management and end-of-waste. Businesses currently face 27 different approaches to determining when materials cease to be waste, what qualifies as a by-product, and how extended producer responsibility schemes are designed and implemented. This fragmentation creates unnecessary administrative burden, increases compliance costs, hinders companies from operating across multiple Member States, and prevents secondary raw materials from circulating freely within the single market. This results in lost business opportunities and lower environmental protection.
Second, we face a chicken-and-egg issue. Secondary raw material feedstocks are often more expensive than primary raw materials, for example when these are fossil fuel-based. Moreover, too many recycled materials are still landfilled or incinerated. And demand for EU recycled and reused products remains unpredictable and insufficient in key sectors. This in turn leads to lower investments in facilities able to provide these secondary feedstocks, which in turn means that they are less competitive.
And finally, in a world where exports of critical raw materials are instrumentalized for geopolitical reasons, the EU only collects less than 38% of the electric and electronic waste that is so rich in these CRMs and recycles less than 30% of it.
The Circular Economy Act will aim to address these issues. And in particular, it will focus on three specific objectives. First, simplifying the regulatory framework and removing barriers to the functioning of the single market in the area of the circular economy. Second, strengthening secondary raw material markets and in particular improve access to feedstocks. And third, reducing the dependency of the EU's economy on imports of critical raw materials.
Meeting these objectives will also have a positive effect on the environment, thanks to greenhouse gas emissions reductions and by making sure more products and materials are reused and recycled, so reducing the generation of waste. To deliver on such ambitious objectives, we need to take ambitious action. Of course, we are ahead of the Circular Economy Act, so as you can imagine, I cannot here explain everything that we aim to include in our proposal, but allow me to mention some of our planned actions. On extended producer responsibility schemes. Some features of extended producer responsibility schemes are identified as one of the so-called terrible ten barriers to the single market.
Barriers that need to be addressed. We need simplification, digitalization, and harmonization. And importantly, we also need transparency for companies and good governance for effective EPR systems. To further ease the life of companies and ensure material value retention, we will provide certainty and make it easier to move secondary raw materials across borders of Member States. This, of course, concerns the end-of-waste criteria.
We will work to improve access to feedstock. Our aim is to include demand and supply-side measures to improve the access to secondary raw materials. These measures are currently being discussed and refined. And finally, we are working on a revision of the WEEE, the waste of electric and electronic equipment, to boost CRM recovery. We are looking at how to address barriers related to collection, recovery, and recycling.
Now let me be clear, and I think this was emphasized by some of the previous speakers in the panels, the Act will deliver real tangible change on the ground to make circularity easier in the EU. But indeed, circularity cuts across waste policy, product policy, the bioeconomy which was mentioned, industrial policy, trade, agriculture policy, taxation, investment, skills, digitalization, and consumer behavior, among other policies. So the Commission will also consider how these can further contribute to enhance circularity. And last but not least, we will continue to deliver on the implementation of existing legislation that supports circularity goals. Dear Chair, honorable members, I look forward to continuing to engage with you on this important initiative.
I trust that we can continue our good cooperation to ensure a Circular Economy Act that will deliver real effects on the ground for businesses, citizens, and the environment. Thank you.
Pierfrancesco Maran
So many thanks to all of our speakers. Many thanks to the colleagues that have participated to the debate and of course to the Commission. The ENVI Committee want to be protagonist in the circular economy act. So now we expect from the proposal of the Commission and of course in the next month we will go on talking about this topic that is one of the pillar we can contribute to build the future of our economy and of our green policies. Thank you everybody.
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