A sustainable industry for a circular and climate neutral economy:

By Henna Virkkunen, MEP (EPP Group), Member of the ITRE Committee

The Green Deal should not be seen as a threat but as an opportunity for the European industry to renew itself.

If done right, the industrial transformation will bring about significant competitive advantages to Europe, by boosting innovation, clean technologies and markets for sustainable raw materials while at the same time preserving our environment and increasing our well-being.

Those who see the Green Deal as a threat are usually worried about the costs of transition. However, we should also consider the cost of non-action.

Circularity is a key component of the industrial transformation, as it brings clear benefits to both the environment and the economy.

Currently the European Union is highly dependent on imported raw materials, we import some 40% of our primary resources. In case of certain critical materials, over 90% is imported.

Yet simultaneously the amount of waste annually generated in Europe keeps increasing. It is clear that reusing these materials would not only benefit the environment but could have a significant economic impact.

The first Circular Economy package of 2018, including actions such setting new recycling targets for various materials and measures against single use plastics, was a first step to the right direction.

Yet more robust measures are needed in order to truly close the loop and to reap the benefits of circularity.

First and foremost, cross-sectoral sustainable product policy is required to make circularity the norm. In addition, well-functioning waste collection and recycling systems are needed to support holistic value chain cooperation.

The expected new Circular Economy Action Plan is vital in stepping up the work to address all parts of the value chain.

The Commission has rightly identified to focus on resource-intensive sectors such as construction, plastics, electronics and textiles.

This is important especially from the consumer perspective, as for example the unsustainability of the textile industry is not largely recognised.

Not everyone knows that after food, housing and transport sectors, textile industry is the fourth largest cause of environmental pressure globally, or that currently over 70% of all textiles sold in the EU end up in landfill or incineration.

Recycling and reusing the often fossil-based or otherwise environmentally burdensome fibres and fabrics would undoubtedly have environmental as well as economic consequences.

As Commission President Ursula von der Leyen has stated, in order to succeed in the creation of a truly sustainable European single market, the transformative power of both climate and digital transition must be harnessed.

It is estimated that digitalisation has the potential to reduce global CO2 emissions by 20%. Digitalisation is a driving force behind a number of industrial transitions, and for transforming our most energy-intensive industries smarter use of resources is needed.

We must foster this mutually beneficial link between digitalisation and circularity, by promoting the use of AI and European data space for sectoral specific actions such as industrial manufacturing.

In order to find the most cost-efficient ways to both decrease emissions and to increase our productivity, the focus must be on encouraging research and innovation.

Horizon Europe will play a key role in achieving the Green Deal objectives. Another promising initiative is the Sustainable Europe Investment Plan, presented as part of the Green Deal, which is set to mobilise at least €1 trillion in sustainable investments over the next decade.

We must ensure that the focus of the funding will be on areas with the greatest innovation potential, regardless of the size of the organisation.

The best way to ensure we can deliver the most innovative solutions is to invest in education. The future of work will look considerably different from today’s.

Circular economy and digitalisation will fundamentally transform our business models, from design and production all the way to waste recovery.

Developing the right skills set will allow us not only to adapt to the change but also to benefit from it. For boosting our research and innovation performance, the Member States should address the whole spectrum of learning, from quality primary education to lifelong learning as opportunities for continuous skills updating.

The upcoming Skills Agenda will be a key building block in this respect.

For the sustainable transformation to succeed we must have a long-term vision, aiming at the 2050 climate neutrality goal. Private sector investments, especially in heavy resource-intense sectors, are made for decades to come.

We need to create a stable and predictable regulatory framework to support market-based mechanisms for the climate transition.

All Green Deal measures must be accompanied by science-based impact assessments, prepared in collaboration with industrial experts, to ensure lasting results.

The upcoming industrial transformation is undoubtedly unprecedented in scope and depth, yet there is no reason to believe Europe cannot succeed in it.

We have the required resources, technologies and knowhow; they just need to be harnessed in the most optimal, resource-efficient way.

However, Europe accounts only for some 10% global greenhouse gas emissions and cannot solve the climate crisis alone. Yet in today’s interconnected world where value chains are global, Europe’s circular transformation will have an international impact.

As the world’s biggest single market and free trade champion, we can encourage clean investments and circular solutions worldwide.