As a leading global economy, the European Union must play a major role in mitigating climate change and showing the path to the rest of the world. Europe must rapidly shift towards a decarbonised, sustainable and circular economy also to secure its industrial competitive advantage. In these times of institutional change, EU policy-makers will have renewed opportunity to safeguard our children’s future.
According to a study by Roland Berger (2019), the environmental and energy sectors cover one third of global greenhouse gas emissions (GHG), equivalent to nearly 20Gt CO2. The study shows that more than half of it could be potentially avoided if solutions that are today technologically mature were to be deployed on a large scale. This however would require stronger regulatory support and adequate public policies.
1/ Accelerating the energy transition
As highlighted by the UN intergovernmental Panel on Climate Change, carbon pricing is an effective instrument in the fight against climate change.
Putting an adequate price tag on pollution and reducing the costs of depollution would massively lower overall GHG emissions.
Setting the right price on pollution
In addition to the existing EU Emissions Trading Scheme (EU ETS), the European Union should act in a way to encourage and assist Member States in implementing a carbon price floor. According to the High Commission on Carbon Prices, the level needed to drive significant change is estimated at $40-80/t by 2020 and $50-100/t by 2030.
Furthermore, the creation of a border carbon tax for products manufactured outside the EU and without any CO2 emission limitation could also be considered to preserve the competitiveness of the EU economy and provide incentive towards decarbonisation in the rest of the world.
Revenues collected through these mechanisms should be allocated to remediation activities, such as energy efficiency projects, but also carbon capture, storage and utilisation, combined with bioenergy.
Energy efficiency first
Combining carbon pricing together with energy efficiency measures is the most effective way to decarbonise our European economy. Implementing the “Energy Efficiency First” principle, which consists in prioritising energy savings activities over energy production projects, would be a powerful way to meet climate goals at the least cost possible, while guaranteeing energy security. According to a model scenario of the International Energy Agency 76% of GHG emissions reductions required in the EU can be achieved through energy efficiency measures.
Favour decentralised energy
Europe should furthermore prioritise local energy production loops as a substitute to imported hydrocarbons.
District heating and cooling networks (particularly efficient when coupled with cogeneration) allow both for energy storage and the use of renewable energy sources, including local biomass, lost heat and non-recyclable waste.
2/ Completing the switch to a circular economy
Increasing demand for water, energy or raw materials; dependence on third countries for supply; positive impact on CO2 emissions; and creation of new business opportunities: Europe more than ever needs to complete its transition!
Turning Europe’s waste into valuable and competitive resources
If the production of Solid Recovered Fuel out of non-recyclable, non-hazardous waste as an alternative to fossil fuel clearly needs public policy support, so does the production of secondary raw materials!
Securing supply of secondary raw materials implies to invest in better collection systems and highly efficient sorting facilities.
Quality recycling requires quality input materials, so products need to be designed for recycling.
Where Extended Producer Responsibility (EPR) schemes have been set up, an eco-modulation of fees can encourage better eco-design and recyclability. Two aspects should be considered to increase the demand side of the market: boosting the competitiveness of recycled materials and fostering the inclusion of recycled content in products. In this regard, the recently adopted Single-Use Plastics Directive sets a welcomed precedent.
Green Public Procurement also has great potential in terms of creating more demand for recycled materials. As for competitiveness, the price gap between virgin and recycled materials should be reduced via combined fiscal and economic instruments.
Optimising water use and reuse
Circular economy principles can also be applied to the water sector. Freshwater is a scarce resource therefore reusing water can help lower the pressure on resources. Today, agriculture accounts for almost 70% of annual water withdrawals globally, followed by the industry with 20% and citizens with 10%. Growing population combined with climate change are rapidly accelerating the disruption of the hydrologic cycle and thus creating important issues of water scarcity. Europe must become smarter with the way it uses its water resources and shift towards a circular water management model by reusing and recycling treated wastewater. Water is too precious to be used only once.
Reusing treated wastewater for beneficial purposes other than the initial use, such as irrigation, cooling systems, boilers, process water, cleaning or aquifer recharge could help address water scarcity. For this reason,
Veolia is strongly in favour of a regulatory framework that encourages water reuse and water recycling through quality requirements
and common criteria that protect the environment and public health across the EU. The proposal for a regulation on water reuse for agricultural irrigation sends a positive first signal.
In parallel to an optimal water use, adequate measures should be taken to treat heavy pollutants at source in the first place. Tackling pollution in the water cycle also requires the EU to further investigate how to reduce pollution coming from hospitals, industrial facilities and large cities tapping into more efficient wastewater treatment technologies.
Concerning sewage sludge and organic materials, all recycling and reuse options should be encouraged including recovery into fertiliser, compost and biomass as long as it meets strict health and environment standards.
3/ Dedicating innovation and data management to the right purpose
Thanks to the exponential volume of data, artificial intelligence (AI) can develop prediction as well as prescription tools. Implementing technologies powered by AI increases performance. Veolia, the first company to monitor and optimise water, energy and waste flows in real-time, is today a major Internet of Things (IoT) operator with more than 10 million connected devices.
Digitalisation driving sustainability
The use of data collected throughout the water network allows for the detection of leaks or the prediction of consumption or infrastructure maintenance. For sanitation, the monitoring of effluent quality from upstream to downstream of the treatment plant enables to optimise its operation. Moreover, connected interfaces allow our technicians working on the ground to react quicker to alerts.
In waste management, Veolia uses AI technology to help increase the efficiency and reduce the costs of waste sorting. A smart waste sorting robot has a recognition capability and can sort multiple fractions simultaneously in one spot, reducing complex pre-processing.
Not only is AI modernising manufacturing but it also unlocks the potential of the circular economy.
Also, the development of AI must be as inclusive as possible so no one is left behind. Human-centred AI does not overlook employees. Veolia is dedicated to upgrade e-skills among its employees. As the first publicly traded company to switch to cloud- based internet services, we trained more than 300 people with a special focus on those from the ditched data centres.
Building smart and resilient cities
Cities should identify a set of underlying principles to ensure adequate public accountability and transparency as they adopt new technologies. While cities will become smarter in water, energy, public transport or waste management, by the same token, they will also become more resilient to global challenges including climate change, urbanisation or air pollution, with solutions to fight heat-islands in cities. Today, digital solutions exist to keep track of performance indicators in real-time and from anywhere but this requires organisational change.
Smart networks combining electricity, gas, wastewater, drinking water and telecom networks will provide cumulative benefits for greater security and flexibility to manage fluctuating demands and to better integrate new decentralised means of production. Overall, new technologies can help optimise the efficiency of city operations and services to its citizens and make local administrations more interactive and responsive. Europe has a key role to play in funding R&I, promoting public-private partnerships and breaking down barriers to develop and scale up smart cities across the continent.
Veolia group is the global leader in optimised resource management. With nearly 171,000 employees worldwide, the Group designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries. In 2018, the group supplied 95 million people with drinking water and 63 million people with wastewater service, produced nearly 56 million megawatt hours of energy and converted 49 million metric tons of waste into new materials and energy.
Veolia’s purpose is to contribute to human progress to achieve a better and more sustainable future for all.