New research on Circular Economy in Europe
- Sep 7, 2020 4:45 pm GMTSep 16, 2020 4:43 pm GMT
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Image Credit: Enel Foundation
Enel and The European House - Ambrosetti presented their latest study: “Circular Europe: How to successfully manage the transition from a linear to a circular world” during the 46th edition of the Forum held at Villa d’Este in Cernobbio (September 4-6th).
The research - conducted by Enel Foundation and The European House – Ambrosetti in cooperation with Enel and Enel X - defines an operational framework for the transition towards a Circular Economy model in Europe, assesses the level of development and the benefits of Circular Economy in the EU+UK, with a special focus on Italy, Romania and Spain. Moreover, the study formulates policy recommendations for the transition from a linear to a circular Europe.
The study methodology relies on 23 Key Performance Indicators, applied to a panel dataset of more than 10.000 observations to evaluate the state of the art and the benefits of circular economy across its four main pillars, sustainable inputs, end-of-life, extension of useful life and increase of the intensity of use.
Notwithstanding the recent European Green Deal and the related New Circular Economy Action Plan issued in March 2020 set new and more challenging objectives for Europe, the road towards full circularity is still long. Most European countries still lack a national strategic roadmap aimed at developing an economic system based on Circular Economy, and progress is not homogeneous across Europe.
Actions are needed to full exploit the game-changing potential of Circular Economy. The research suggests 10 areas of intervention with specific policies:
1. defining national strategies for a circular economic development;
2. redefining the governance of circular economy in order to support strategic and cross sectorial transition;
3. leveraging on legislation to promote the transition;
4. levelling the competitive playing field with non-circular solutions;
5. using finance to promote research and development on circularity;
6. addressing the lack of a clear definition and of comprehensive and homogenous metrics;
7. turning waste-oriented business models into circular ones;
8. adopting cross-cutting and coordination measures for all the sectors involved in the Circular Economy transition;
9. leveraging on circular economy to rethink cities and urban spaces;
10. promoting the culture and awareness on the benefits related to Circular Economy.
In this context, the European business community agrees that Circular Economy is key for the future of companies. In a survey conducted within the study among 300 European business leaders, 95% of respondents consider the shift from linear to circular models a strategic choice for their company.
Francesco Starace, CEO and General Manager of Enel and Chairman of Enel Foundation, comments: “Aiming at the development of a Circular Economy is an extraordinary opportunity to make Europe more competitive, modernizing its economy, revitalizing its industry and creating jobs through sustainable and lasting growth.” He concludes by adding that “In this context, the increasing penetration of renewable sources, together with the increased use of electricity as an energy carrier for end-user consumption, can boost the opportunities arising from Circular Economy and is the most efficient way to decarbonize the economy and the society we live in.”
Circularity is in fact associated with relevant economic benefits matching with environmental ones. The study shows how circular economy is linked to 300-380 billions of GDP and to up to 2,5 millions jobs in Europe in 2018. At the same time, the use of secondary materials for 4 metals (iron, aluminum, zinc, lead), brings a 73,5% average reduction of GHG per kg of material produced. Also, an increase of just one percentage point in renewable energy penetration would save up to 72,6 million tons of CO2eq each year in Europe.
Valerio De Molli, Managing Partner and CEO of The European House Ambrosetti, commented: “The innovative Circular Economy Scoreboard developed by Enel Foundation and The European House – Ambrosetti, together with Enel and Enel X, reveals a very diverse situation at the European level. Italy and Spain have a medium-high level of development: Italy excels in end-of-life, ranks well in the use of sustainable inputs and extension of the useful life of products, while it must strive to increase the intensity of use of products and services. Spain, on the other hand, has a good ranking for the use of sustainable inputs, end-of-life, and increase of the intensity of use, while it has a medium-low positioning in the extension of the useful life of products and services. Romania is instead facing a substantial growth path on all four pillars."