Cities can play a pivotal role in creating an enabling environment through regulations and incentives, but the private sector needs to collaborate and explore the cross-sectoral synergies required to achieve a circular model. There are immense opportunities for public-private collaboration in achieving goals that might not otherwise be possible for cities to accomplish alone.

Cities are embedding circular thinking in their utility processes, placing the onus on the private sector to come up with new business models that are both economically viable and ecologically sustainable. This could potentially result in a situation whereby circular products and services become the new market standard.

The previous Commission policy on resources management was part of the priority for jobs and growth and economic competitiveness. The circular economy will be no less important for the new political priority of climate neutrality; it will become one of the indispensable elements for meeting the EU’s ambitions.

EU climate policy and the circular economy are, by and large, complementary and mutually reinforcing. The circular economy is more than just another ‘product standards’ policy.

Circular economy products for the foreseeable future will require both technology push and market pull policies. The principal challenge will be to create ‘lead markets’ for the circular economy in combination with low-carbon products. 

The EU faces multiple challenges (climate crisis, environmental disasters, a lack of competitiveness, falling behind in the digital race, etc.) that it will need to address if it is to ensure long-term sustainable prosperity for European citizens. At the same time, there are two ongoing transitions – the creation of a circular economy and the digital transformation – that could provide the means to address these challenges, if they are managed well.

As the EU and national policymakers are making significant efforts to promote a circular economy on the one hand and a digital economy on the other, Annika Hedberg and Stefan Šipka, together with Johan Bjerkem, argue that it is time to align the agendas as a means to achieve greater sustainability and competitiveness.

This publication:

• demonstrates what digitalisation means in the context of a circular economy;
• considers what a greater focus on sustainability would mean for the digital transition;
• examines the role of the EU policy framework, tools and initiatives in steering a (digital) transition towards a (digital) circular economy and makes recommendations for EU institutions for the next five year.

It suggests that the EU must:

• think systemically, define a vision and act;
• provide an adequate governance framework and economic incentives for a (digital) transition to a (digital) circular economy;
• encourage collaboration across European society and economy as well as globally, and empower its citizens to contribute to the transition.

This Discussion Paper builds on the findings of the EPC’s "Digital Roadmap for a Circular Economy" project of 2017-19 and paves the way for a more extensive final study, scheduled to be published in the late autumn of 2019.

The project has been supported by Aalto University and the Natural Resources Institute Finland (Luke) (members of Helsinki EU Office), Central Denmark region, Climate-KIC, the Estonian Ministry of the Environment, Estonian Environment Investment Centre, HP, Orgalim, the province of Limburg, UL, Fondazione Cariplo and Cariplo Factory.