Re-fuse Efficiency in a Circular Economy

Jonas Bystrm, senior sector specialist, water & waste management division, European Investment Bank (EIB) suggests ways to promote a circular ecomomy, including the introduction of new terminology.

Jonas Byström, senior sector specialist, water & waste management division, European Investment Bank (EIB) suggests ways to promote a circular ecomomy, including the introduction of new terminology.


With a growing global population and increasing consumption, it is becoming more and more evident that we live beyond the means of the earth's finite resources and environmental carrying capacity. This is manifested not only by the often alarming effects of a disturbed environment and stressed climate, but also by the last decade’s rising resource prices that followed a century of falling prices. Together, these factors provide a strong case for steering away from the current linear take-make-use-dispose society towards a more circular economy, where, the utility and value of materials are maximised, their wastage throughout the value chain is minimised, and any waste generated is considered an asset rather than a liability.

In the waste sector, the development towards a circular economy presents both challenges and opportunities. Waste managers should consider how best to adapt to and benefit from this new reality and contribute to its further realisation. A key challenge is to find ways to more firmly establish the view that our post-consumption discards are resources, whose management should fully reflect their inherent resource and energy value, also considering that this value will continue to increase in parallel to resource depletion.

From waste to re-fuse

It has been argued that the first step towards integrated waste management is to stop calling it waste. On a similar note, it is sometimes stated that in a fully circular economy there is no waste, since all linear flows have been closed in circular material loops. Acknowledging this, the time seems right to substitute the negatively charged term waste with a new term that better reflects the resource value inherent in post-consumption discards.

Since such discards could be viewed as resources after use, the term re-fuse is an option, also considering its allusion to a post consumption stage (“re“), to incorporation and integration (“fuse”), and to the circular economy mantra re-think. The adoption of a new term, such as re-fuse, which is used throughout this text for the sake of argument, would signal the transition from yesterday’s waste management, aimed at minimising environmental and health impacts and diverting waste from landfills, to tomorrow’s re-fuse exploitation in an increasingly circular economy.

Re-fuse efficiency

Increased re-fuse efficiency is an important aspect of a circular economy. During the last decades, EU directives and targets have contributed to reducing re-fuse generation, diverting re-fuse from landfills, and increasing re-fuse recycling and recovery. While many EU member states have achieved high recycling rates, others are struggling to reach double digit numbers, something which the Commission will consider in their revision of the Circular Economy Package presented by the last Commission in July 2014, and withdrawn by the new Commission in February 2015.

The original package included among others proposals to raise recycling targets for municipal solid waste to 70% and for packaging waste to 80% by 2030. The revised proposal will reportedly have a wider focus than the old, and comprise smarter and more effective targets, some of which could also be country specific. The Commission has launched a public consultation on the subject that is open until 20th August 2015, and the revised proposal is expected to be presented by year-end.

Irrespective of how future EU targets are set and formulated, there will always be a certain level of uncertainty in planning the capacity of residual re-fuse treatment facilities based on yet to be attained future diversion targets. There is thus a clear rationale first to aim at maximising re-fuse diversion, and, when and where necessary for target compliance, establish residual re-fuse treatment capacity.

The road to re-fuse efficiency

To increase re-fuse efficiency, further efforts must be made to increase both the quantity and the quality of recyclables extracted from re-fuse. This will reduce the dependency on imported raw materials in EU, and increase the resilience to diminishing supplies and increasing prices, with new jobs and economic growth as added benefits.

On the recyclables supply side, separate collection infrastructure and related treatment facilities must be expanded and improved, and public awareness increased, in particular in countries where recycling rates are low today. Here, financial institutions like EIB have a responsibility to adapt their lending products and procedures to the financing needs of often small and less capital intensive re-fuse recycling and recovery projects comprising e.g. separate collection infrastructure, material recovery facilities, and composting and anaerobic digestion facilities.

Framework loans, which enable the financing of groups of smaller projects of a particular type or in specific region, and intermediated lending, are appropriate for such types of projects. Through the European Fund for Strategic Investments (EFSI) under the Investment Plan for Europe, and through other dedicated instruments, EIB is also able to finance circular economy projects with a higher risk profile than under normal EIB operations.

Targets and other push-like measures aside, it is being recognised that further recycling developments will also require pull-like mechanisms and measures that support the development of markets and boost demand for secondary raw materials extracted from re-fuse. Optional measures discussed include, for example, further focus on eco-design and green procurement, streamlining eco-label systems as means to build consumer awareness, and better exploiting various economic incentives such as differentiated VAT schemes or extended producer responsibility fee rebates on products or packaging that contain a certain share of secondary raw materials. Voluntary industry schemes for minimum recycled content in certain products or packaging, such as under the UK Dairy Roadmap, would also contribute to an increased demand for secondary raw materials.

Looking further up in the value chain, product design and production planning should strive to improve material, water and energy efficiency, and increase the life and the potential for repair, dismantling and recycling of products.

The opportunities in re-fuse efficiency

Whereas the transition to a re-fuse efficient circular economy era is justified by the necessity to adapt to an increasingly resource constrained reality, it should not be seen as a necessary burden, but as a logical development with the potential to create employment and economic growth in EU. Such a transition would be facilitated by a closer dialogue and co-operation among policy makers, industry and the re-fuse sector, where re-fuse managers could take a more proactive and pivotal role than is the case today. Actively promoting such a re-fuse efficient green growth seems like a sensible aspirational path for the re-fuse management sector in our developing circular economy.

Email: bystroem@eib.org


Disclaimer: The views expressed are those of the author and do not necessarily reflect the position of the EIB.

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