European Union: EU Roles Out Resources Efficiency Plans To Combat An Unsustainable Economy

Last Updated: 17 October 2011
Article by Paul Sheridan and Olivia Quaid

On 20 September 2011 the European Commission launched publications relating to resource efficiency and the sustainable use of natural resources in the EU. The head line driver is a prediction that if the EU alone carries on resources consumption at the current rates, the EU itself will require the equivalent of 2 planets to sustain itself.

The key document is a Roadmap to a Resource Efficient Europe (COM(2011) 571/3) (the "Resource Efficiency Roadmap"). This builds on existing strategies such as the Low Carbon Roadmap. Whether some or all of the proposals will become law will remain to be seen but it is worth noting the milestones for 2020 because these are only a little over 8 years away.

For those in, or financing those in, public procurement, consumer goods, real estate and waste management sectors (including energy from waste) these proposals are likely to be of importance particularly in assessment of investment in medium to long term plans or projects.

What is also very clear is the European Commission's backing of life-cycling costing and accounting for environment externalities. These are very poorly understood by mainstream businesses and related professionals. Consideration may need to be given to skills in this area including teaching provided at our universities.

Targeted areas and milestones

The Resource Efficiency Roadmap identifies the areas to be targeted for transformation. It sets out a number of milestones followed by the mechanisms intended to secure their achievement. These mechanisms include legislation, market-based instruments, refocusing of funding instruments and the promotion of sustainable production and consumption. So, for instance, there is a call to change the focus of taxation away from labour towards resources and pollution, and to provide new incentives for resource-efficient products. There is also a recommendation to adapt prices to reflect the real costs of resource use. The Roadmap seeks the establishment, by 2013, of targets and indicators providing predictability and transparency in resource efficiency, through a participative process involving policy makers, NGOs, business and consumers. A greater role is envisaged for eco-design, eco-labelling, and the greening of procurement by public bodies. Significant emphasis is placed on energy efficiency in the public sector.

The overarching milestone is that by 2050 "All resources are sustainably managed, from raw materials to energy, water, air, land and soil. Climate change milestones have been reached, while biodiversity and the ecosystem services it underpins have been protected, valued and substantially restored."

We focus below on selected themes of the Roadmap. The proposals identified are not exhaustive.

Indicators

Milestone: "By 2020 stakeholders will be mobilised to ensure that policy, financing, investment, research and innovation are coherent... Ambitious resource efficiency targets are robust, timely indicators will guide public and private decision-makers.".

Due to uncertainty about the indicators to be used to guide better policy or investment decisions two levels of indicators are mooted prior to stakeholder engagement: (1) A provisional lead indicator - "Resource Productivity" - to measure improving economic performance while reducing pressure on natural resources; (2) A series of complementary indicators on key natural resources such as water, land, materials and carbon, to take account of the EU's global consumption of these resources.

Resource productivity is measured by the ratio of GDP to Domestic Material Consumption (expressed in Euro/tonne). A higher ratio indicates better performance, with growth consuming relatively fewer resources. The European Commission, with Member States, proposes to reach broad agreement by 2013 on how to measure progress. The European Commission also intends to propose a new lead indicator on natural capital and environmental impacts of resource use and to continue the development of the system of environmental accounts, further integrating environmental externalities into national accounting and developing a composite index on environmental pressures.

Lifecycle resource efficiency

Milestone: "By 2020, market and policy incentives that reward business investments in efficiency are in place ..All companies, and their investors, can measure and benchmark their lifecycle resource efficiency. Economic growth and wellbeing is decoupled from resource inputs and come primarily from increases in the value of products and associated services".

The European Commission intends to strengthen requirements on Green Public Procurement (GPP) for products with significant environmental impacts; assess where GPP could be linked to EU funded projects; promote joint procurement; establish a common approach to assess, display and benchmark the environmental performance of products, services and companies over the life-cycle ('environmental footprint'); address the environmental footprint of products and boost the material resource efficiency of products (e.g.  reusability / recoverability/ recyclability, recycled content, durability), and expand the scope of the Ecodesign directive to non-energy related products.

Member States are requested to assess measures to extend producer responsibility to the full life-cycle of the products they make and optimise the resource efficiency of packaging.

Waste as a resource

The European Commission highlights that each year the EU disposes of 2.7 billion tonnes of waste, 98 million tonnes of which is hazardous. On average only 40% of the EU's solid waste is re-used or recycled. Higher priority is to be given to re-use and recycling. A combination of policies is proposed including product design integrating a life-cycle approach, an appropriate regulatory framework, incentives for waste prevention and recycling, and public investments in modern facilities for waste treatment and recycling.

Milestone: "By 2020, waste is managed as a resource. Waste generated per capita is in absolute decline. Recycling and re-use of waste are economically attractive options for public and private actors due to widespread separate collection and the development of functional markets for secondary raw materials. More materials, including materials having a significant impact on the environment and critical raw materials, are recycled. Waste legislation is fully implemented. .Energy recovery is limited to non recyclable materials, landfilling is virtually eliminated and high quality recycling is ensured".

The European Commission aims to stimulate the secondary materials market and demand for recycled materials through economic incentives and developing end-of-waste criteria; review existing targets, with residual waste close to zero (in 2014); assess the introduction of minimum recycled material rates, durability and reusability criteria and extensions of producer responsibility for key products (in 2012); assess where legislation could be aligned to improve coherence (in 2013/2014); facilitate the exchange of best practice on collection and treatment of waste among Member States and develop measures to combat more effectively breaches of EU waste rules (in 2013/2014).

All of this has been flagged in one way or another by the EU and Member States in previous communications but we imagine that the proposed restriction on energy recovery from waste will be a surprise to many and will be closely watched.

Buildings

Milestone: "By 2020 the renovation and construction of buildings and infrastructure will be made to high resource efficiency levels. The Life-cycle approach will be widely applied; all new buildings will be nearly zero-energy and highly material efficient, and policies for renovating the existing building stock will be in place so that it is cost-efficiently refurbished at a rate of 2% per year. 70% of non-hazardous construction and demolition waste will be recycled."

The proposals include widening the Eurocodes to design criteria related to sustainability and the development of incentives to reward resource efficient buildings and to promote the sustainable use of wood in construction.

Commentary

The majority of proposals have a familiar tone to those working in this area and there are many instruments already in place or being implemented which are moving in the direction of sustainability, life-cycle costing and the internalisation of external costs into the price of the product/service relate to work already under way.

For those mapping out business development and investment plans for the medium to long term or for those investing in assets of longevity, the roadmap is essential reading. Changes to fiscal impacts, public procurement, business and asset reporting, increased scrutiny on resource use, accounting and adjustments of incentives could have many direct and indirect impacts.

Information

Please click here to view The Resource Efficiency Roadmap

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 12/10/2011.

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