The Circular Economy: Practical steps to enhance the EU package

The Circular Economy: Practical steps to enhance the EU package

This briefing highlights the shortcomings of the 2015 Circular Economy package, and looks at how the environmental and socially equitable reform of fiscal systems across the EU can support the transition to a circular economy.

On 2 December 2015, the European Commission presented a revised Circular Economy package (COM/2015/614) with the stated aim of supporting the transition to a stronger and more circular economy where resources are used in a more sustainable way.

The proposed actions, welcomed by the European Council in June 2016, aim at “closing the loop” of product lifecycles through greater recycling and reuse, making better use of raw materials, products and waste, and therefore shifting away from the more conventional – but unsustainable – linear economy.

Commission First Vice-President Frans Timmermans announced the 2015 Circular Economy package with the promise that it would be more ambitious than the proposal previously put forward in 2014. However, campaigners have been generally critical of the new package, warning that its weaker targets and focus on waste management, rather than prevention (product design and manufacturing), could push the EU off-track in the race towards a sustainable future.

Green Budget Europe calls on the EU and Member States to ensure:

  • A higher share of environmental taxes in order to achieve at least the 10% of total revenues envisaged in the Europe 2020 strategy – see inventory in Annex 1;
  • A tax shift away from labour and on to resources and pollution at the national level;
  • Reduced rates or exemptions on VAT for recycled products as well as reuse and repair activities;
  • The mapping and phase-out of direct subsidies and tax breaks to products and services which hinder reuse, recycling and innovation, and
  • The inclusion legally binding targets for reuse, recycling, sharing, food waste, marine litter and resource efficiency. More ambitious indicators within the framework of the European Semester are also needed.

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