Government’s analysis, assessment and research activities
Study: Circular economy considerations must be at the heart of product policy development

Achieving a circular economy requires coherent guidance that addresses problem areas and takes into account the overall picture. Products must be more environmentally friendly, more repairable and longer-lasting than at present. In order to achieve this objective, we need national and international guidance, especially at the European Union level. The research project examined policy instruments in four key areas of product policy. There is a great deal of work for legislators in all four areas, according to the report published on 15 June.

The joint research project, carried out by the Finnish Environment Institute, the University of Eastern Finland and Vrije Unversiteit Brussel, produced information on how the objectives of a sustainable circular economy could be integrated into product policy guidance. The research project supports Finland’s goal of being a frontrunner in the field of circular economy and was carried out in close cooperation with the steering group and leading European experts.

Developing new and existing instruments to support the circular economy

Important challenges for policy instruments include the vast number of products on the market, rapid changes in several product areas and the fact that the instruments are targeted at areas of great significance for companies. The interviews conducted during the project revealed that companies often do not adapt their activities to the circular economy at their own initiative, even if it would benefit them. Companies often need more information about the environmental impacts of their products and the requirements imposed on them. With this in mind, we need policy instruments for disseminating information, creating a circular economy market and promoting innovative product design.

The main existing policy instruments, such as extended producer responsibility and ecodesign, should be developed to better take into account products sold online and should be expanded to cover new product groups – and Finnish research and companies should be involved in this development work. Consumers need clearer and more reliable information on the environmental impacts of products, so it is important to make sure that environmental claims are based on common ground rules. At the same time, we should encourage a shift from the ownership of products to the use of services. One way to do this could be by testing the potential of service-based models in public procurement.

In order for policy guidance to be effective, it must often be enacted at the EU level and it must be applied uniformly across all Member States. It is essential to maintain a clear overall picture of the situation: a balanced range of policy instruments should be based on comprehensive assessments of the actual impacts of the instruments and should take their coherence into account from a variety of perspectives.

Attention should be paid to policy coherence and ex post analyses of policy impacts

The study found that, despite the massive attention paid to the circular economy in recent years, analyses of the impacts of policy instruments are surprisingly limited. To this effect, the researchers call for systematic ex post analyses of the impacts of circular product policies in order to maintain a science-based approach to policymaking. The researchers also identified a clear need to pay close attention to policy coherence in all of the studied areas. Further, the environmental considerations of circular policies should not be limited to the material efficiency considerations; they should also extend to impacts on the climate, biodiversity and the environment. The circular economy is only a means to an end; environmental and other sustainability considerations must remain at the heart of product policy.

Inquiries:

Petrus Kautto, Director, Strategic Programme for Sustainable Circular Economy, Finnish Environment Institute SYKE, tel. +358 295 251 272, [email protected]

The Government’s joint analysis, assessment and research activities (VN TEAS) produce data used to support decision-making, everyday operations and knowledge-based management. They are guided by the Government’s annual plan for analysis, assessment and research. The content of the reports published in the publication series of the Government’s analysis, assessment and research activities is the responsibility of the producers of the data in question and does not necessarily represent the view of the Government.