Circular Economy: Main features and Key Determinants of the EU Secondary Markets for Materials

Social acceptance is growing about the need for moving from a linear to a more circular use of resources. This allows for lowering raw material consumption and waste generation, while reducing the EU resource and energy dependence from abroad, which has become economically and geo-strategically important. The EU circular economy could further expand by fostering waste prevention and preparing for re-use. Despite recent improvements in waste management capacity, the EU circularity could also benefit from enlarging secondary markets by feeding back more secondary raw materials into the economy. However, materials’ specific features and/or economic and technological constraints might limit recycling capacities. Therefore, understanding the economic drivers of recycling is key for defining effective and efficient policy measures. These range from regulation (e.g. specific technological or performance standards including waste collection/sorting methods and eco-design) to market-based instruments, whether price-(e.g. taxes and charges, subsidies and public facilities) or quantity-based (e.g. cap-and-trade), or both. The optimal policy mix design may nevertheless vary according to a range of economic, social, cultural, political and institutional factors. Specific policy interventions promoting recycling encompass a possible review of the EU waste hierarchy, a broader eco-design and a harmonised waste legislation, data definition and collection.