Quantifying the benefits of circular economy actions on the decarbonisation of the EU economy
The circular economy has gained momentum in the political arena in the last few years. The European Commission has made the transition to a circular economy one of the key policy priorities in the EU, as it can bring a variety of benefits, including increased competitiveness of European businesses, less vulnerability for price shocks or supply disruptions of imported materials, potential employment benefits and a lower environmental impact. The European Commission emphasized in its Circular Economy Action Plan the importance of the shift to a circular economy as a tool to reduce greenhouse gas (GHG) emissions. Although the climate change mitigation potential of the circular economy is widely recognized, the number of studies that have analysed and quantified the GHG impacts of circular economy actions is limited. This study led by Trinomics and conducted in collaboration with Ricardo and TNO, has been the first step towards the development of a comprehensive methodological framework for the assessment of the GHG emissions impacts of circular economy actions.
The project has delivered the following key outputs:
- The number of existing studies on the GHG impacts of circular economy actions is limited;
- Those studies that did quantify GHG impacts of circular economy actions differed significantly in terms of their scope, methodologies applied and ambition levels assumed, which complicates cross-study comparisons;
- In case, meta-analysis of the results from existing studies is pursued, the following differences between studies need to be taken into account:
- The research question of the study (e.g. assessment of policy impact, vs impact of particular activities)
- Granularity level at which impacts are reported (at circular action, sector or economy-wide level)
- The baseline trends assumed
- The ambition level of circular economy uptake that is assumed
- The format in which GHG impacts are reported (e.g. cumulative changes, absolute differences in a terget year compared to baseline, etc.)
- Circular economy actions can make a significant impact on climate change mitigation if ambitious disruptive innovations (e.g. large-scale car sharing) are pursued. Sectors that seem to have the highest GHG abatement potential through circular economy actions are: the built environment, the automotive sector, the food sector, the waste sector and the materials (most notably plastics, metals and cement) sectors.
- There is no silver bullet in terms of methodologies for the assessment of circular economy GHG impacts. Which option is the best choice depends strongly on the type of question that is to be answered and on the data availability for particular circular actions. Macro-economic modelling approaches, LCA and material flow analyses are all viable methodological options.
- Today, limited availability of up-to-date data is an important limiting factor for accurately calculating the GHG impacts of circular economy actions.