Circular economy: A win-win for EU-India cooperation and trade
In a globalised supply chain, moving towards a circular economy requires international cooperation. Piotr Barczak looks into the five ways that the EU and India can work together to improve the quality of products on the market, reduce the carbon footprint of supply chains and curb pollution.
Large economies, such as the EU and India, have a key role to play in the global transition towards a circular economy and a lot to gain from stronger business cooperation and aligned legislation. The beginning of June will mark the first large International Circular Economy Forum in New Delhi, where panelists from India and the EU will exchange on the most pressing needs and potential benefits of working together towards a circular economy.
The case to go circular
With a rising per capita income, India is witnessing increased manufacturing and it is changing its consumption patterns. This comes with environmental impacts that must be efficiently managed and mitigated. With only 2% of the world's landmass but almost 18% of world population, it is paramount for India to take on harmful linear material flows and shift towards a circular model, which will provide many economic and ecological benefits.
In 2018, the annual consumption growth in rural India stood at 9.7% while the urban consumption grew by 8.6%. Rural Indian households are now spending more on consumer goods like durables, health and personal care, food and beverages and services, than a few years ago. To meet sustainable goals, businesses must now strive to unleash the possibilities of a circular approach rather than conducting business-as-usual.
The EU, for its part, has a large environmental impact due to its high consumption levels and related large waste generation. The EU's material footprint, calculated as the total consumption of fossil fuels, biomass, metals and non-metallic minerals, including embodied in imports, is currently 14.5 tonnes per capita. This figure is well over the global average, and about double what is considered sustainable. Imports from outside the EU account for 20% of it. With respect to environmental impacts from resource use, the EU uses between 70% and 97% of the 'safe operating space' available for the whole world.
Years of experience in separate collection and recycling of waste have resulted in relatively well-established waste management systems across Europe. However, these are rarely addressing the waste generation levels that are still on the rise. Recent developments of major EU strategies such as the European Green Deal, the Circular Economy Action Plan and the Sustainable Products Initiative aim at changing these negative patterns and ensure that the EU's waste problems are addressed upstream, including the very beginning of supply chains such as extraction of resources and production outside the EU.
In an increasingly globalised economy, both India and the EU need to address the interconnected challenges of climate change, biodiversity loss and pollution. Sustainable modernisation of both economies through the deployment of key urban systems can help reduce greenhouse gas emissions and mitigate climate breakdown. A transition from current take-make-waste economies through the use of renewable energy, enhancing material recovery and designing out waste can promote a more sustainable development.
As governments of EU and India plan to make their economies more circular, it is important to align ambitions and move together in the same direction. Setting regulatory requirements and economic instruments that enable circular economy solutions in key sectors will unlock benefits and values convergence into measurable political, economic and environmental frameworks. This can also help both economies to decarbonise industry and meet their climate commitments.
A transition must take place at the national and local level, but also in international supply chains and in the trade of goods consumed in India and Europe. The EU ambitions to make sustainable products a norm must be recognised by all producers, including those in India, if they want to continue selling on the European market. Relevant regulatory approaches, market-based instruments, business models, and material flows studies may help to make this happen. In this regard, it will be useful to analyse the potential for a more sustainable trade between Europe and India in line with the EU Green Deal. Notably, studies could look into the development of circular and resilient trade practices, sustainable procurement and, possibly, free-trade agreements, and how this would impact production and consumption patterns in both India and the EU.
Five opportunities to boost circularity
Both economies can benefit from new business and investment opportunities that would emerge from an enhanced cooperation between the two sides. The EEB, together with its Indian partners, have identified few areas of focus:
In view of the Global Plastics Treaty that is being negotiated within the United Nations, more emphasis is needed on upstream solutions to curb plastic pollution. These may include reduction, reuse and improved material circulation, supported by economic models and legislative measures that increase producers' responsibility with modulated fees, enhanced collections systems such as Deposit Return Schemes (DRS), and more support for reusables and refillables, including in e-commerce.
Production patterns in electronics and textiles can be shaped by EU Green Deal provisions to ensure good quality products and their uptake on the EU market. In this context, competitiveness is to be gained quality-wise, not price-wise. Exporters that do not respect product requirements set by the Green Deal and the Sustainable Products Initiative will be excluded from the EU market.
EU waste management best practices, from separate collection to decentralised composting and extended producer responsibility, could be applied in India, taking into account local specificities and challenges, such as the social inclusion of informal waste pickers.
India has the opportunity to build on the success of the Right to Repair campaign in the EU and adapt it to its national context, both in terms of repair-based skills and business models, that are already widespread among informal waste pickers, and broader advocacy towards eco-design of goods.
India can preserve its low waste generation rates, while improving wellbeing and addressing pollution. Economic development aligned with a circular economy must not result into an increase of waste generation.
A circular future starts now
All these topics will be discussed at the International Circular Economy Forum (ICEF) on 2-3 June 2022 in New Delhi. The event will represent an opportunity to identify, showcase, and celebrate circular initiatives in India across different focus sectors. The forum features a futuristic approach for stakeholders to build and scale up a circular economy by providing a platform to share insights, network and learn from other circular economy experts and practitioners.