Circular 88 Indicators
Jule Kue
Our world is only 7.2% circular. Material extraction and carbon emissions continue an upward trend. In terms of sustainability and circularity, the global engine of change is stuck in reverse; we are still heading in the wrong direction. Measuring progress, understanding the current state of play and steering towards the right direction are key when accelerating the circular economy.
However, with a variety of challenges ranging from limitation in indicator coverage to data availability and collection, the circular economy metrics field is still on its way to maturity. For indicators to be successful in supporting stakeholders guiding the transition, they must be consistent, meaningful, widely accepted, and easy to understand. PACE and Circle Economy have established the Circular Economy Indicators Coalition (CEIC) to drive harmonization and increased application of circular indicators.
In October 2020, the Circular Metrics for Business report was released and can be used as a tool to navigate the complex landscape of circularity metrics, by providing a step-by-step guide on which metrics to choose. Businesses can apply metrics to create awareness of the opportunities the circular economy brings to innovate their products among their shareholders, customers, suppliers, and employees.
World Resources Institute has established a world-class and globally-representative Secretariat to serve as the hub of an outstanding international research and communications network and support the work of the High Level Panel, the Expert Group and the Advisory Network.
The circular economy is a production and consumption model aiming at maximising the value of products, materials, and resources through different strategies along the whole life cycle of products. Some strategies contributing to the transition from a linear economy towards a circular economy are design-for-circularity, sharing, reuse, repair, repurposing, remanufacturing, and recycling.
Measuring the development of a circular economy is crucial for determining the efficacy of EU policies and initiatives as well as identifying best practises. The EU monitoring framework for the circular economy has been updated in May 2023 by the Commission to include new indicators and a new component on global sustainability and resilience.
In addition to the four current dimensions of the previous monitoring framework (production and consumption, waste management, secondary raw materials, and competitiveness and innovation), the new monitoring framework also contains a new component on global sustainability and resilience. New indicators, such as the material footprint, resource productivity, consumer footprint, greenhouse gas emissions from manufacturing operations, and material dependency, are part of the new monitoring framework.
The effects of Circular Economy strategies including increased use of Secondary Raw materials (SRMs), can be assessed by adopting different methods, including: Material Flow Analysis (MFA), Life Cycle Assessment (LCA), and Product Environmental Footprint (PEF).
Material Flow Analysis (MFA) is a method which allows a quantitative estimate of the stocks and flows of materials/components/products along their whole value chain within a system defined in space and time. It can help to size the effects of Circular Economy strategies on these stocks and flows.
Life Cycle Assessment (LCA) is a standardised methodology (ISO 14040) used to assess the environmental impacts of products and/or services throughout their life cycle, i.e. from the extraction of raw materials to the final disposal (including manufacturing, use phase and EoL treatments).
Hence, the recommended LCA methods by the EU to quantify the environmental impacts of products (goods or services) and organisations are the Product Environmental Footprint (PEF) and Organisation Environmental Footprint (EF) methods. Note that, for some products/organisations, Product/Organisation Environmental Footprint Category Rules (P/O-EFCRs) already exist.
Based on a Life Cycle approach, the Joint Research Centre developed and applied a method named Resource Efficiency Assessment of Products (REAPro) to support discussions related to circularity and material efficiency in the context of product policies.
Even though developed to support discussions in the context of product policies (especially steps 3 and 4, in the figure), REAPro can be adapted to other policies (e.g. waste policies, raw material policies) and industrial processes, e.g. it has already been applied to assess the environmental performances of open-loop and closed-loop recycling options for plastic waste flows in a Member State.
The EU aims to double its use of recycled material, in terms of its share in the total amount of material used by the economy, between 2020 and 2030, as set out in the circular economy action plan. Increasing the use of secondary materials reduces the extraction of primary raw materials and related environmental impacts. In 2022, recycled material accounted for 11.5% of material used, an increase of less than one percentage point since 2010. This rather slow progress, together with projections for increased material demand in the EU by 2030, signify that the EU is not on track to double the circular material use rate by 2030.
Non-metallic minerals account for more than 50% of total material consumption and their CMUR has decreased since 2010 alongside metals.The CMURs increased for biomass and fossil-based materials between 2010 and 2022. The CMURs for various material groups differ significantly with almost 24% for metal ores in 2022 and only slightly above 3% for fossil materials. This reflects the different nature of materials and how they are used. For instance, metals are technically easier and economically more attractive to recycle and feedback into the economy, while fossil fuels are mostly burned and cannot be recycled.
Circular economy strategies, by aiming to retain the value and extend the life of products, can reduce resource consumption and consequently reduce impacts on the environment and climate. Meeting the target of doubling the CMUR would mean an increase from 11.5% in 2022 to 23.2% by 2030. This requires the average CMUR annual compound growth rate to be 20 times higher in the remaining period to 2030 compared to that of the past ten years. This is rather unlikely, considering an increase of less than one percentage point in the CMUR during 2010-2022, including stagnation since 2017, and projections by the OECD predicting an increased future demand for materials in the EU by 2030. The latter is important as increasing recycling alone will not allow the EU to achieve the target. Increased recycling coupled with reduced material use is required. Reducing the use of heavier material groups like non-metallic minerals and metals has a greater potential for increasing the CMUR. However, since material extraction has different environmental impacts, measures should also focus on reducing the consumption of fossil energy materials and increasing the sustainability of biomass production in view of reducing environmental pressures.
Europe is progressively moving away from a model of production of consumption that is linear where materials from the Earth are taken, then transformed into products, and ultimately are thrown away as waste to a circular model where materials are kept in use longer and made into new products again after use. The European Commission's circular economy action plan offers the overall framework for initiatives to foster a circular model.
Understanding whether and how this is happening, the areas where progress lacks and identifying best practices are key to accelerating that transition. The 'Bellagio Process' is an international dialogue that agreed upon a set of principles on how to ensure that monitoring the transition to a circular economy captures all relevant aspects and involves all relevant parties. It serves to also guide national and European authorities in the development of monitoring frameworks and indicators.
The Bellagio Declaration contains seven principles and was endorsed, in December 2020, by the Heads of the Environment Protection Agency of Germany, France, Slovakia, Switzerland, the Netherlands, Austria, Italy and the EEA. The full document endorsed by these countries is accessible here.
The European Commission and Eurostat have established a framework to monitor progress towards a circular economy using available statistical data. The European Circular Economy Monitoring Framework focuses on aspects of the circular economy related to resource use and waste management. An update from May 2023 added elements to address the production side of the economy, and aspects like material footprint and consumption footprint. It also now includes a horizontal dimension on global sustainability and resilience linking circularity to climate neutrality and global material dependency.
In the past two decades, many countries and the European Union have been orienting their waste and materials management policies towards preventive and integrated approaches, with emphasis on the life-cycle and supply chains of materials and products. Policy initiatives aimed at establishing a circular economy (CE) have increased as an essential contribution to a sustainable, low carbon, resource efficient and competitive economy. These developments brought about strong demands for reliable information on a circular economy and raised questions as to the adequacy of the statistics and indicators currently available for effectively supporting national policies and international work. To address these questions, UNECE and OECD joined forces to provide common guidelines for measuring progress.
The type and scope of the information needed to support circular economy (CE) policies depend on how a CE is defined and on the purpose for which the information is needed (for example, policy development, policy monitoring and evaluation, awareness raising, communication, participation). They also depend on whether the information is to be used in international work or to support national policies and initiatives.
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