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Circling the Economy but missing the target

Circling the Economy but missing the target, Asia packaging, environmental packaging legislation, packaging waste management, Japan packaging
In June the Brussels bureaucrats issued their grand vision and adopted its Communication "Towards a circular economy: a zero waste programme for Europe" to establish a common and coherent EU framework to promote the circular economy with the objective being ‘zero-waste”. Underwhelmed by the proposals, Stuart Hoggard explores what the Circular Economy will mean.

According to the recent European Commission Communique (Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2008/98/EC on waste, 94/62/EC on packaging and packaging waste et al), the European Commissioners in their wisdom, state the rationale for a Circular Economy – viz:- 

Turning Europe into a more circular economy means:

  • Boosting recycling and preventing the loss of valuable materials;
  • Creating jobs and economic growth;
  • Showing how new business models, eco-design and industrial symbiosis can move us towards zero-waste;
  • Reducing greenhouse emissions and environmental impacts.

The proposal itself states:

In 2011, total waste production in the EU amounted to approximately 2.5 billion tons. By way of example, only a limited share (40%) of the municipal waste generated in the Union was recycled, with the rest being landfilled (37%) or incinerated (23%) of which around 500 million tons could have been otherwise recycled or reused. The Union thus misses out on significant opportunities to improve resource efficiency and create a more circular economy leading to economic growth and jobs which in turn would reduce greenhouse gas emissions and its dependency on imported raw materials.

Unfortunately, the key term in the above extracts is a ‘more’ Circular Economy suggesting that the Commissioners aren’t planning to go the whole hog but inch their way towards this elusive Circular panacea.

Elsewhere the proposal states:

“This Directive amends six different waste Directives and affects an important number of legally binding obligations, including a comprehensive amendment of the targets contained in the Waste Framework Directive, the Landfill Directive, and the Packaging Directive and a simplification of the WEEE, ELV and Batteries Directives. This is a complex review of waste legislation that will potentially affect a number of pieces of national legislation.

The revised targets for waste management contained in the amended Directives are inter-connected, and as such should be carefully transposed into national legislation and later on incorporated into the national waste management systems.

The provisions of the amended Directives will affect a wide range of private and public stakeholders in the Member States and will have an important impact on planned investments and future infrastructures in the waste management systems.

Possibly hidebound by previous objectives of cleaning up the garbage, the new proposals themselves seem singularly ‘linear’ in their thinking - as if mesmerised by the mantra, “Must Reduce Landfill”.

This blinkered approach ignores the essential fundamentals of the Circular Economy – “it’s the Economy – stupid”.

So let me attempt to shed some enlightenment:

Where did the Circular Economy come from?

It began as an academic paper in 1966 with the delightfully 1960’s title: The Economics of the Coming Spaceship Earth by economist, educator, peace activist, poet, religious mystic, devoted Quaker, systems scientist, and interdisciplinary philosopher, the late Kenneth E. Boulding .

According to Wikipedia it was revived:

“In January 2012, a report was released entitled Towards the Circular Economy: Economic and business rationale for an accelerated transition. The report, commissioned by the Ellen MacArthur Foundation and developed by McKinsey & Company, was the first of its kind to consider the economic and business opportunity for the transition to a restorative, circular model. Using product case studies and economy-wide analysis, the report details the potential for significant benefits across the EU."

The EU website also suggests that the 2012 report, ‘the first of its kind’, is the ground breaking basis for the current EU proposals – unfortunately, as we will see, this is misleading.

What is the Circular Economy?  

The Circular Economy is an economic theory that re-thinks the way an entire economy works. It is both a Law and a Philosophy, a way of thinking.  At its most basic, it proposes that across the whole industrial and consumer world “the waste from one process becomes the feedstock for another”.

As an aside: If you are looking for a good laugh, I heartily recommend the Wikipedia entry on the Circular Economy as an example of impressive sounding pseudo-tehno-babble about the “study of feedback rich (non-linear) systems, particularly living systems…. cradle to cradle, biomimicry, industrial ecology”, and the blue economy, modularity, versatility and adaptiveness” – (oh, and my favourite) – “material flows are of two types, biological nutrients, designed to reenter the biosphere safely, and technical nutrients, which are designed to circulate at high quality without entering the biosphere.”

Put that way, I prefer Kenneth Boulding’s original ‘spaceship earth’ approach; beam me up Scotty, we’re in trouble!

So is it about Waste management?

Apparently, if you look at the EU proposals,  in reality the Circular Economy deals more with ‘front of pipe’ (materials and production) than it does ‘end of pipe waste management. In fact the Circular Economy doesn’t even recognise the word ‘waste’. What we call ‘waste’ the Circular Economy views as ‘resources’ – so some basic vocabulary adjustments needed there.

How does it differ from the way the Western world does things now?

Currently most western countries’ economies are linear in nature.

In the Linear Economy:-
1. You extract some resource from the ground
2. Put it through some manufacturing operation consume energy in the process
3. It becomes a ‘thing’, a product of some sort
4. This thing or product is then consumed (or used whatever the thing is)
5. It reaches the end of its useful life
6. It is then discarded as ‘waste’ where, energy is consumed in the collection and disposal process
a. Is tossed in land-fill
b. Incinerated
c. Left at the roadside to rot

In the Circular Economy:-
1. You extract some resource from the ground
2. Put it through some manufacturing process
3. It is then designed to be recovered, taken apart, and re-used and then manufactured to become a ‘thing’
4. This ‘thing’ is then consumed (or used whatever the product is)
5. It reaches the end of its useful life
6. It is recovered, disassembled and
a. Some parts usefully go directly back into the manufacturing process (re-use),
b. Others go into other manufacturing processes and are ground or melted down and returned to their original material state which can then be sent back through the process to be cast, moulded or blown to become another ‘thing’
c. Is used as feedstock for a completely different process; fuel for an incinerator to produce energy, back-fill for road-building or construction works

What are the benefits?

While the end result will be an obvious reduction of material going to landfill, that is just one part of the equation.

Other benefits include:

  1. Reduction in quantity of virgin raw material extracted at source
  2. Reduction in transport costs for the raw material from wherever it is extracted to wherever it is to be processed
  3. Reduction in cost of raw materials – since they have already been extracted and transported to wherever they are to be used – actually this is the main overwhelming reason. Realistically, is all about money, cost reduction and very little to do with the environment. 

But if it comes from a 2012 report to the EU, has anyone actually attempted to test or prove the theory?

Just the 2nd and 3rd largest economies in the world – they’ve had Circular Economy legislation in place or decades:

Japan passed its CE Law in 2002. Called The Sound Material Cycle Law it was introduced after seven years of modifications and amendments to pre-existing legislation and exhaustive practical real-life trials.

Circling the Economy but missing the target, Asia packaging, environmental packaging legislation, packaging waste management, Japan packagingChina passed its CE law in 2008, obligingly called the Circular Economy Law.

Six years before the EU Commission report the then-President of China, Wen Jiabao, said in his 2006 announcement of the national Five-Year Plan: “We must transform the National Economy from a resource consumption economy into a resource conserving economy by means of Circular Economic principals”

That’s why the Chinese have an Excessive Packaging Law.

It’s also why they began restricting scrap plastic imports in what has become known as the Green Fence to ‘purify’ the scrap and control what is imported to ensure that it has real value. 

So it is not just about keeping waste out of landfill?

No, that’s a bureaucratic EU mantra, don’t be brainwashed

Why have we not heard about this before?

If you’ve been reading my editorials on and its sister publication Packaging Business Insight Asia, you should be up to speed – I’ve been reporting on aspects of the practical implementation the Circular Economy in Asia fairly regularly, long before the 2012 Ellen MacArthur Foundation / McKinsey report.

So the Asians are streets ahead of us?


What can the Circular Economy do for us?

Tell you next month


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