Where next for circular economy monitoring? An overview of European developments

The circular economy is widely recognised as a promising solution to provide economic benefits while limiting the environmental pressures resulting from production and consumption systems. However, evaluating its impact and measuring our progress in the transition are not easy tasks. A WRF23 event organised by the European Environment Agency provided an overview of developments in Europe and proposed innovative pathways to improve our effectiveness in understanding and measuring the fullness of the circular economy transition. 

The circular economy has steadily entered European policy circles and it is often presented as a key tool for increasing resource efficiency and reducing environmental pressures, while improving Europe’s competitiveness. Now circularity is called to move from promise to reality and demonstrate its tangible impact on environment, economy and society. For this, it’s paramount to build reliable monitoring frameworks able to provide empirical evidence for the impacts of the circular economy from the macro- to the meso- and micro-level.

The challenges in measuring circularity are due to a variety of factors, including the lack of standardized and reliable data, lack of harmonization, and the multiple dimensions (i.e. environmental, social, economic) and levels (i.e. micro, meso, macro) involved. Furthermore, the prevailing linear thinking means that existing metrics and measurement frameworks are often inadequate to cope with the complexity of circularity.

In order to measure the fullness of the circular economy transition, a holistic approach is required as no single indicator could ever do the job. Over the past years, several positive developments have been taking place in this area and currently there is a number of monitoring frameworks that have been developed and adopted, including the European Circular Economy Monitoring Framework. In 2021 the OECD collected around 500 indicators from 30 circular strategies within the OECD Inventory of Circular Economy Indicators.

While these frameworks represent useful tools to understand phenomena at the macro-level, particularly for the accounting of material flows associated with resource supply and waste, it is widely recognised that several elements of the circular economy remain not well covered. An innovative approach and multi-stakeholder collaboration are required to further progress towards fully measuring the circular transition and understanding its wide-ranging impacts.

The Bellagio Declaration

The Bellagio Declaration represents a milestone in the area of circular economy monitoring. Started as a collaboration between ISPRA and the European Environment Agency, and published in March 2021, it is a set of principles on how to ensure that a monitoring of the transition to a circular economy captures all relevant aspects and involves all relevant parties.

The Declaration defines 7 principles:

1. Monitor the Circular Economy Transition
Capture the full extent of changes, including environmental, economic and social dimensions.
2. Define Indicator Groups
- Material and waste flow indicators
- Environmental footprint indicators
- Economic and social impact indicators
- Policy, process, and behaviour indicators
3. Follow indicator selection criteria (RACER)
Indicators included in a transparent monitoring framework for the CE transition should be: relevant, accepted, credible, easy to monitor and robust.
4. Exploit a wide range of data and information sources
Consisting of, e.g., official statistics from the European Statistical System or National Statistical Offices, policy information, and new data sources.
5. Ensure multilevel monitoring
Addressing both public and private sector stakeholders, and different governance levels from global to local scale.
6. Allow for measuring progress towards targets
Monitoring implementation should help assess progress to relevant policy targets and objectives.
7. Ensure visibility and clarity
Inform policymakers, stakeholders and citizens through user-friendly methods of communication.
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The Bellagio Principles provide a high-level methodology, which can be leveraged and applied to develop comprehensive monitoring frameworks at different levels and dimensions. If consistently applied, the principles could ensure a first level of harmonization across different frameworks.

THE EU’s 2023 Circular Economy Monitoring Framework (CEMF)

In January 2018, the European Commission adopted the first EU Circular Economy monitoring framework, which proposed ten indicators, grouped into four dimensions of circular economy: 1) production and consumption, 2) waste management, 3) secondary raw materials, 4) competitiveness and innovation. In the 2020 Circular Economy Action Plan, the EC called for a revision of the framework to better account for the impacts associated with production and consumption in relation to wider objectives as climate neutrality and zero pollution.

A timeline of relevant developments in the EU

2015
2018
2019
2020
2021
2023

First Circular Economy Action Plan

The European Commission adopts its first Circular Economy Action Plan

First EU Circular Economy Monitoring Framework

The European Commission adopts the EU Monitoring Framework for the circular economy, composed of a set of key indicators to track progress in the EU and in member states

European Green Deal

The European Commission adopts the European Green Deal as a ‘roadmap for making the EU’s economy sustainable’.

New Circular Economy Action Plan

The European Commission adopts a new circular economy action plan, as one of the main building blocks of the European Green Deal.

Bellagio Declaration

The Bellagio Declaration is published, aiming to serve as a guide to national and European authorities in the development of monitoring frameworks and indicators.

Revised EU Circular Economy Monitoring Framework

The European Commission adopts a revised EU Circular Economy Monitoring Framework.

The new monitoring framework, published in 2023, comprises 11 indicators, grouped into 5 dimensions. A new dimension has been added compared to the four included in the 2018 version: Global sustainability and resilience. The Global sustainability area aims to measure the extent to which the circular economy enables production and consumption systems to stay within planetary boundaries, while the resilience part makes the direct link to the security of supply of raw materials, particularly for critical raw materials.

The framework includes some new indicators, such as:

  • Material footprint: measuring the overall use of materials and reflecting the amount of materials embedded in overall consumption, including imported goods;
  • Consumption footprint: comparing consumption to the planetary boundaries for 16 impact categories based on a life-cycle assessment and according to the 5 main areas of consumption (food, mobility, housing, household goods and appliances);
  • GHG emissions from production activities, measuring the GHG emissions produced by production sectors (therefore excluding emissions from households) and reflecting the contribution of the circular economy to climate neutrality;
  • Material dependency, measuring the share of imported materials on overall material use, describing how much the EU depends on imports of materials and reflects the contribution of the circular economy to security of supply of materials and energy and to the EU’s open strategic autonomy.

Where are we currently standing with circular economy monitoring?

The publication of the Bellagio principles and the revised EU CEMF represent promising developments for building adequate and comprehensive circular economy monitoring frameworks. The CEMF’s attempt to make a direct link between circular economy and climate neutrality and planetary boundaries is a much-needed step to start verifying the promises of the circular economy when it comes to systemic environmental pressures. At the same time, however, it is also recognised that some aspects are still missing or not fully accounted for in the CEMF, such as business models, industrial symbiosis, education, jobs, consumer patterns, biodiversity, and investments.

At a more fundamental level, further standardisation the field of circular economy is required to develop common definitions and frameworks. This need is currently being tackled by the ISO TC 323 Circular Economy, under which 6 standards are being developed, and one more on secondary materials developed under TC 207. Additionally, there is a recognised need to ensure appropriate synergies among ongoing relevant monitoring initiatives at local (e.g. city of Amsterdam), regional (e.g. Flanders), national (e.g. France, Netherlands), EU and international (e.g. Joint UNECE/OECD Guidelines for Measuring Circular Economy) level.

While so many initiatives are a sign of progress in the field, they also run the risk of creating several disconnected frameworks, each with a separate understanding and measurement of circularity. This is why harmonisation in how circularity is defined and measured is urgently required. At the same time, however, due to the lack of reliable data, an experimental approach is needed to ensure that we can identify and leverage a wide range of data sources for developing circular economy indicators.

The EEA’s Circularity Metrics Lab: exploring novel data sources

The EEA’s Circularity Metrics Lab (CML) uses a range of sources such as European datasets, national statistics, surveys, and novel dataflows to provide insights on progress towards the development of the circular economy. It is intended to complement other monitoring frameworks by providing additional evidence on circularity.

The circularity metrics are grouped in four categories: 1) Enabling Frameworks, 2) Business, 3) Consumption, 4) Materials and Waste. The metrics include ‘Indicators’, which are well-established and EU-wide datasets, and ‘Signals’, which though informative, are less complete and may include scientific studies, surveys, and country-level datasets. Some examples of signals include: number of product certifications to European eco label, household expenditure on repair and maintenance, circular economy lending and financing, share of citizens who have chosen alternates to new products.

The CML is a great example of innovation in this space, as it aims at filling current knowledge gaps through an experimental approach and techniques to exploit novel data sources, such as web-scraping. While the reliability and applicability of some of the metrics are still to be assessed, this approach emphasizes how complementary methods may enrich our understanding and measurement of circularity.

Looking ahead: experiment, harmonise and clearly communicate

Due to challenges related to data availability and systems’ complexity, several aspects of the circular transition are not yet properly measured and monitored. Going ahead, some of the promising areas to be further explored include data opportunities from digitalisation, better use of qualitative indicators, and target metrics that can clearly show the impact of circular economy measures, rather than just state indicators.

As the circular economy is called to deliver on its promises, the need for trustworthy data sources and harmonized indicators is more urgent than ever. These are in fact essential components to provide useful policy insights and report on all dimensions, including the social effects of a circular economy and the international effects of circular transitions. If circularity is to provide for tangible and long-lasting socio-economic value within planetary boundaries, we need to measure it across all levels and to clearly communicate the state and impacts of the circular transition at different scales and to different stakeholders.

About the WRF23 Loudspeaker Event 'Where Next for Circular Economy Monitoring?'

The online event 'Where Next for Circular Economy Monitoring?' was organised by the European Environment Agency as a Loudspeaker Event of the World Resources Forum 2023 on October 25, 2023. The event was organised by Peder Jensen (EEA) and Shane Colgan (EEA).
Speakers:
- European Environment Agency, Peder Jensen, Shane Colgan
- European Commission (DG Environment), Paola Migliorini
- United Nations Economic Commission for Europe, Michael Nagy
- Planbureau voor de Leefomgeving, Aldert Hanemaaijer

Emanuele Di Francesco

Communications and Events Manager, World Resources Forum

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