As part of the Luxembourg Presidency of the Council of the European Union (EU), the European Commission and the European Investment Bank (EIB) organised a conference in Luxembourg on 10 December 2015, entitled 'Financing the Circular Economy'.
The purpose of this meeting was to involve the European financial sector in the Circular Economy, which is essential for EU Member States if they wish to combat commodity shortages and resulting price fluctuations and the destruction of the natural environment. Following words of welcome from Prime Minister, Xavier Bettel, and from the President of the European Investment Bank, Werner Hoyer, the European Commissioner heading the Environment, Maritime Affairs and Fisheries, Karmenu Vella, presented the 'Circular Economy' package adopted by the European Commission the previous week, on 2 December 2015.
For Prime Minister Xavier Bettel, the Circular Economy represents more than 'a potential model for Luxembourg and Europe, but constitutes an economic imperative.'
The President of the EIB, Werner Hoyer, emphasised in his speech that the transition towards a Circular Economy meant decoupling economic growth and social well-being from the consumption of resources and that this would be, without a shadow of a doubt, one of the most daunting tasks that humanity will have to accomplish in the future. For him, the Circular Economy also means an effective and important solution in the fight against climate change.
Werner Hoyer also pointed out that the Circular Economy could create up to 100,000 new jobs over the next five years and 2 million jobs by 2030, therefore representing a real opportunity for growth.
On the subject of the EIB's contribution, the bank's President Hoyer stressed that it had co-financed Circular Economy projects to the tune of 15 billion euros over the past 10 years, mainly in Europe. He also added that the EIB had been working hard to get innovative projects off the ground within the framework of the European Fund for Strategic Investments (EFSI), aiming to free up 315 million euros of investment for the EU economy over the next three years.
Werner Hoyer then mentioned risk-sharing instruments such as InnovFin. InnovFin is an initiative from the EIB group and the European Commission made up of a series of integrated financial instruments and advisory services to encourage investments in the R&D of companies, whatever their size. Within this context, the EIB and the Commission signed an amendment to the InnovFin delegation agreement at the conference, with a view to enabling riskier initiatives and economic models to gain access to credit through InnovFin, which was previously available only to cutting-edge industrial and technological companies. The consultancy Services aspect of the InnovFin, a financial advisory service of the EIB, will also enable medium-size enterprises to develop their investment projects in the Circular Economy, so as to take advantage of financial products made available to them through InnovFin.
The European Commission's 'Circular Economy' package
Karmenu Vella, the European Commissioner for the Environment, Maritime Affairs and Fisheries, then presented the 'Circular Economy' package adopted by the European Commission on 2 December 2015. According to him, the Circular Economy is a means for building and boosting Europe's competitive edge, creating new business opportunities and employment that otherwise might be relocated elsewhere.
The Commissioner noted that the new Commission package will cover the entire life cycle of the products. The action plan also foresees measures aimed at preventing wastage, he said. For example, the Eco-Design directive will be reviewed, with the aim of making products longer-lasting and easy to repair. The new package will also tackle the issue of obsolescence and contribute towards better consumer information thanks to a new EU ecological label.
Regarding consumers, the package foresees stepping up the criteria of public eco-friendly markets, with a view to encouraging public authorities to think 'Circular'.
As to the proposal on waste, it will give Europe an ambitious, clear and stable framework, stated Karmenu Vella. It will enable public and private players across Europe to develop long-term investment strategies, centred on preventing wastefulness, encouraging product recycling and the recycling of waste, among other things.
But for this to be translated into action, innovation at European level will have to be stepped up and investors attracted, said the Commissioner, who also announced a 'set of support measures' involving Horizon 2020, EIB, EFSI (European Funds for Strategic Investments) and structural funds. An initiative to the tune of 650 million euros has also been launched as part of Horizon 2020 on 'Industry 2020 in the Circular Economy', he said, adding that other European funds under regional policy and cohesion policy programmes will be mobilised.