Liberal Voices on Circularity
On its course “from strategy to delivery”, the European Commission is presenting its new “Fit for 55” climate package this week Wednesday, July 14, 2021. The target is to cut CO2 emissions by 55% by 2030. The goal is ambitious, the time short – EU member states will have to go into a challenging fine-tuning process with industries and businesses as they translate new laws into measures.
Thankfully, the EU business and industrial landscape does not need to shy away from view in terms of innovative potential and new technologies for effective CO2 reduction. The same goes for the other huge pillar of the EU’s road to sustainability: the transition towards a circular economy. Both CO2 cuts and the circular economy are going to boost the EU green transition during the following years and decades. But they need strong businesses to thrive, and businesses, in turn, require a legal framework, the market access and the freedom for manoeuvre that actually enables them to set new standards – standards for an EU model of sustainability that should, ideally, not stop at the EU borders but would be competitive at the global level as well.
A Way to Pave for Innovation
Despite the huge potential for progress, there is an ongoing lack of understanding and advocacy regarding the needs of sustainable businesses in general, but especially the needs of businesses that contribute to the circular economy. For Liberals, there is huge potential here to fill this gap. The European Dialogue of the Friedrich Naumann Foundation for Freedom has thus taken on a new initiative to bring stakeholders together for dialogue: Just in time for the Commissions new “Fit for 55” package, the European Dialogue has launched a series of three “Sustainability Weeks” on the very topic, one of them just completed with a digital event each on July 6 and July 8, and two more topical weeks to follow in September and October, 2021.
As part of the EU Green Deal, the systematic transition towards a circular economy is one of the main building blocks of sustainable growth. In this context, the substantial reduction of waste generation is an important target. It requires both producers and consumers to intensify efforts in waste prevention, reduction, and recycling, encourages innovation in product design, and challenges traditional patterns of consumption. The Sustainability Weeks explore possibilities, needs and controversies of the current transition by setting spotlights on three major areas of sustainable development: “Consumption & Production”, “Food”, and “Urban Living and Mobility”. To explore these topics in depth, each Sustainability Week features a public roundtable discussion and a World Café-style interactive digital networking event for professionals. The goal is to create two platforms: The roundtables address a wider public, foster knowledge building and generally explore the potential of cleaner technologies, sustainable business models and consumption habits from a liberal perspective, while the networking sessions cater specifically to the needs of stakeholders, decision makers and specialists working in the field by providing them with an open space for exchange of information, discussion and digital networking.
Making Room for Sustainable Businesses
Sustainability Week 1 tackled the tension field between consumers’ preferences, sustainable businesses’ strategies to cater to those preferences, and the challenge of turning waste into a resource. During our digital public panel discussion “IMPULSE: The Future of Consumption” on July 6, moderated by Susanne Hartig (anchor21), Julia Blees, Senior Policy Officer at the European Recycling Industries’ Confederation (EuRIC) and Stefanie Sieberer Policy Advisor for Sustainable Europe at Eurochambres discussed with liberal politicians Frida Nilsson (Centerpartiet, Municipality of Lidköping, Sweden), and Martijn van Dalen (VVD, City of Utrecht, The Netherlands) on the possibilities for successful cooperation between local and regional governments, businesses, and the local public for a successful common effort in recycling. Crucial points raised included the role of local governments in the facilitation of circularity and in making a proactive effort to attract and hold sustainable businesses, the role of education as well as the importance of trust-building with regard to the common endeavour; both between businesses and local governments as well as between businesses and the local public.
As key necessities for a better performance of sustainable businesses, the panellists pointed out the growing potential in eco-design and technological innovation, the need to harmonize sustainability standards and strategies among EU member states as well as the necessity to dismantle administrative and legal obstacles for businesses and industries. They also addressed the tension field between regulation and incentives for sustainable businesses: although recycling targets or quotas (such as quotas for recycled content in production processes) motivate ambition in frontline businesses, they rarely fulfil “one size fits all” criteria, and need to be adjusted to different industries. Similarly, quotas need to consider the actual demand of a given raw material on the local or regional market, from which they are often decoupled.
When compared with other regions around the world, EU recycling industries are currently at a disadvantage with regard to cost efficiency. Although the logic of the circular economy requires materials to be circulated as locally as possible, the recycling industry remains a global one, and discrepancies between local and international demands for recycled products can only be balanced out at the global level. The current role of the EU in the global context is thus to be a goal setter, while focus must be placed on innovation to ensure that EU sustainable businesses remain in competition. The key here is to understand consumers’ needs, set incentives for local demand and to support businesses that can meet the demand, and industries to deliver innovative technologies. Except for the goal of setting initial incentives for demand, regulation is to be placed with caution as it places a significant burden on businesses, especially SMEs.
Many of the points summed up above were echoed and deepened during our digital networking session for stakeholders, “DEEP DIVE: The Future of Consumption” on July 8. During the session, participants entered a more sector-specific discussion on the topics of sustainable batteries, plastic packaging, and textile recycling, supported by moderators Dan-Aria Sucuri, Vice President of the European Liberal Youth (LYMEC), Moritz Hundhausen, Head of the European Environment and Raw Materials Policy Unit at DIHK (Association of the German Chambers of Industry and Commerce, Brussels office), and Alice Homuth, Consultant at Löning - Human Rights & Responsible Business. Participants discussed the specific requirements for sustainable production within their sectors, once more pointing out that legal frameworks should not only impose restrictions but also open up new opportunities, and that varying standards for production within the EU and beyond urgently need to be unified.
As the results of Sustainability Week 1 show clearly, the challenges of the circular economy address a wide range of core values that Liberals need to stand up for in the ongoing transition. The tension field between regulation and incentives remains a key issue. However, from the liberal perspective, three conditions are crucial: 1) the EU needs to make sure that businesses are properly integrated into the transition process; 2) the circular economy needs to be fitted organically into the global economic trade system, complementing its sophisticated network of supply chains; 3) the definition and setup of future circularity needs to ensure that its structures are open and flexible as to allow for dynamic adaptability and, most importantly, innovation. As long as these criteria are met, the EU could be well on its way to set an example for a future circular economy model that is both integrative and profitable, and indeed “fit” for the future.
The discussion will be extended and deepened in the upcoming Sustainability Weeks on “Food” and “Urban Living and Mobility”, where we bring two further topical areas of circularity onto the table. Stay tuned for our event announcements at: https://www.freiheit.org/european-union/sustainability-week-1-consumption-production
Dr. Nele Fabian is European Affairs Manager at the Regional Office of the European Dialogue, Friedrich Naumann Foundation for Freedom, based in Brussels.