Hugo-Maria Schally: "We need all levels of government and of civil society to move towards circular economy

07 July 2017

After working for the UNDP, the Austrian Ministry for Foreign Affairs and the Organisation for Security and Cooperation in Europe in Vienna, he joined the European Commission in 1998 and has been since Head of Unit in several directorates general.

Hugo-Maria Schally: "We need all levels of government and of civil society to move towards circular economy"

After working for the UNDP, the Austrian Ministry for Foreign Affairs and the Organisation for Security and Cooperation in Europe in Vienna, he joined the European Commission in 1998 and has been since Head of Unit in several directorates general. He is now Head of Unit for Sustainable Production Products and Consumption in the Directorate General for the Environment of the European Commission. Mr Schally has been entrusted with the coordination and monitoring of the implementation of the EU circular economy action plan

Why does Europe need to make a transition towards a Circular Economy?

When you look at a certain number of studies the evidence is out there: the linear economy that we have now will not allow Europe to remain competitive, will not allow to generate the jobs, the growth and the prosperity we need, and at the same time maintain a high level of environmental protection and go towards an efficient use of the resources.

The circular economy is a highly complex issue. Companies, processes, technology, political will are involved. That is a lot of variables I don't doubt EU capacities but how can you cope with this complexity to make the transition go further? Don't you feel personally a little dizzy with the magnitude of this issue?

When I talk about the circular economy and describe the wide range of areas and the issues that we need to address I get very worried because there is a lot to be done. But that makes also clear that we need all the stakeholders, all levels of government, civil society to move forward and make this transition a reality. There is not one single solution, one silver bullet, for this transition.

The EU has set some specific targets for 2030 like recycling 65% of municipal waste and 75% of packaging waste. Do you think this is feasible in 13 years?

For a good number of member states these targets have already been met or are in close reach. For other states, they seem difficult to attain. But when you look at the experience of the countries that have decided to go for them you can see that first they have created the political will and they have been able to bring together a coalition of actors. When you have this, things can go really quickly.

There's also a binding landfill target to reduce to a maximum of 10% of municipal waste that goes to landfills by 2030. Why not zero waste?

We have to recognize that in the foreseeable future there are residuals that we don't want to use further and that we cannot reduce by incineration. So, since the ambition is to create clean material cycles, we must find a way to get rid of certain materials and substances. They can be landfilled once they have been stabilized so that what's in there cannot leak into the environment anymore.

In general, the EU wants to discourage landfilling. What instruments are going to be used for this purpose?

We will leave it to the member states to adopt the best instruments they have at their disposal. I think taxes and charges are certainly instruments that can be used. When you look around member states in Europe you see different experiences and I believe it's not for us to describe it in more detail.

Now almost every member state has its own method of calculation for recycling rates What advances are we having in this field?

In its proposal, the Commission has included a new harmonized calculation method which will put all the member states on the same footing. It will mean, if adopted and implemented, that for some member states that are now above the targets they will be below the targets. For some that are now very far from the targets they move closer. I think it is a matter of equity within Europe to have the same calculation method so that it will be easier to compare the performances of all member states.

Concrete measures to promote re-use and stimulate industrial symbiosis - turning one industry's by-product into another industry's raw material. This seems as one of the most challenging issues to me (and at the same time I think it's the real advanced circular economy). I see it very difficult the vast amount of companies that we have in different sectors in Europe unless there an organized structure.

The main point is to set an enabling policy framework. We don't want to get involved in managing the market or determining a specific way for industry and business to proceed. I think we need to create the right incentives and we need to address negative incentives to foster management and sorting of waste, creating quality standards, defining when waste ceases to be waste, or how to deal with pricing. It's not our job to organize structures. That should remain a market-driven process.

Do you think databases and a big data processing system involving IoT are the right tools, from the technical point of view, to tackle this issue?

It depends on what data are you talking about. If by that you mean availability of data about the chemical composition of products, and how those data could be transmitted throughout the value chain in an easy and unbureaucratic way, using digital technologies, that could be a very useful thing. If you think about matching companies on a central organized market I don't think that's the way to go.

Another key level for the circular economy is ecodesign. What is the EU doing to promote advances in this field?

Eco-design can be understood in two ways. In one way as related to the ecodesign directive and the other way in the wider area of ecodesign. The ecodesign directive is a very powerful instrument that, together with energy labelling, has a huge impact on products that are put on the market in Europe. That is, for the time being, limited to energy relevant products. There are also other tools that can be used. One of them, for instance, is extended producer responsibility schemes which can be very powerful too. Regarding design, an important element will be the different costs for products according to their recyclability.

Another relevant issue is food-waste. Around 88 million tonnes of food are wasted annually in the EU, with associated costs estimated at 143 billion euros. How should this subject be addressed?

The EU member states have taken a commitment in the context of the sustainable development goals to reduce food waste. Therefore, what we are looking at is how to enable member states to monitor their progress in that direction and how to identify best practices in this area. But also, there are the legal obligations that could be positively or negatively influencing this. One of the aspects that is being investigated is modifying the best consumed dates to facilitate the continuous use of products for human consumption. That would be a very important element.

From the point of view of the EU, what is the role of cities, of municipalities, in the transition towards a Circular Economy?

Cities and metropolitan areas play a significant role. It is where circular economy meets the citizen. It is where waste collection is done. It is where wastewater is being processed and energy is being consumed. But there is also another important element at the local level which is public procurement from municipalities, metropolitan areas and regions. Circular economy is only going to work if efforts are made at all levels of government and society at the same time.

Do you think that the label "green economy" helps in any way to the development of the transition towards circular economy?

Well, in fact I wouldn't see any different between the two. When you look at it maybe you can see the difference that green economy is related to the macroeconomic level and circular economy belongs to the microeconomic level.

According to some estimations I read, the cost of creating a fully efficient reuse and recycling system in the EU could amount to up to €108 billion. This seems hard to sell unless we talk about increasing global competitiveness, foster sustainable economic growth and generate new jobs. The question is how sure are we that the balance will be positive?

When we look at models, we have, on the one hand, the projection on what this transitions towards circular economy will bring in economic benefits, additional greenhouse emissions savings, decrease of costs or raw materials, and job creation. But of course, on the other hand, we have the cost of establishing sorting and collection systems. One must put it all into a general economic picture. Right now, Europe as a resource poor region, increasingly imports final products and exports used materials without reusing them or putting them into the economic cycle again. Circular Economy must be a part of a European industrial policy that should be able to create new manufacturing capacities, and local jobs in repair, recycling and remanufacturing. If you can keep value in the system, then you actually stimulate production which means jobs.

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