14 December 2016

Christmas: the season of novelty gifts, cracker toys and reams of packaging all destined for landfill? Not if the EU's Circular Economy package of measures, being developed during 2017, succeeds in its ambitions.

What is the Circular Economy?

The Circular Economy aims to keep resources in use for as long as possible, in a bid to achieve sustainable growth. Supporters say it will boost the EU’s competitiveness by protecting businesses against volatile resource prices, helping to create new business opportunities and innovative, efficient ways of producing and consuming. It will also help to create jobs, save energy and avoid the irreversible damage caused by using natural resources at a much higher rate than they can be renewed.

The EU Commission’s Circular Economy Package has recently revised legislative proposals on waste, setting clearer targets for the reduction of waste and providing ambitious steps to target waste management and recycling.

What will these changes mean?

The Circular Economy Package sets high level targets for Member States, but the precise mechanisms for achieving the demanding targets are yet to be seen. Defra is keen to promote the positive 'carrots' and calculates that UK businesses may be able to benefit by up to £23 billion per year, through making low cost (or no cost) improvements to using resources efficiently. However, if the ambitious targets are to be met, we can also anticipate one or two 'sticks'. Measures might include producer responsibility regimes where those putting items on the market must factor in the end-of-life disposal costs, compulsory measures on product design, further measures on labelling, or even fiscal measures on resource use.

Given the link between resource use and cost, early movers are likely to benefit from efficiency savings and positive brand messaging. Many businesses are already thinking about improving product design, to make objects more durable and easier to repair and recycle, and reviewing production processes in order to reduce the resources used and to limit the generation of waste. Reducing energy, water and raw material use is an essential first step but there are wider opportunities too: we are working with clients who are recycling waste streams into innovative products and using the regulatory regimes to develop new markets.

However, as with all regulatory regimes, there are winners and losers. As well as regulatory enforcement and sanctions for non-compliance, we can expect issues of brand protection for those named and shamed, and potential supply chain disputes as the use of resources is disrupted by the Circular Economy in action.

Burges Salmon’s environmental law specialists will continue to advise clients on developments in the Circular Economy throughout 2017.

If you would like to discuss any of the aspects covered in this article, please contact Michael Barlow or another member of our environmental disputes specialist team.

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Michael Barlow

Michael Barlow Partner

  • Head of Environment
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