Why is the EU struggling to meet its circular economy goals?

In this Brief, we outline the EU’s municipal waste objectives and detail the main findings and recommendations of the report published the European Court of Auditors (ECA), which examines the action taken by the Commission and the member states to achieve the EU’s objectives for municipal waste…

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Intro

In this Brief, we outline the EU’s municipal waste objectives and detail the main findings and recommendations of the report published the European Court of Auditors (ECA), which examines the action taken by the Commission and the member states to achieve the EU’s objectives for municipal waste between 2014-2024. This includes whether the Commission’s legal initiatives and enforcement were fit for purpose; if the four sampled member states (Greece, Poland, Portugal, and Romania) have made good progress in achieving EU waste targets and objectives; and whether the 16 sampled projects in these member states were well implemented terms of time, cost and capacity.

Key takeaways

  • Municipal waste – waste from households, offices, shops and other sources - accounts for 27% of the total waste generated in the EU. Managing municipal waste is challenging due to its diverse composition, physical proximity to people, and environmental and health impacts.
  • EU waste policy aims to transition towards a circular economy. The EU strengthened legal requirements for municipal waste, such as targets for preparing for reuse and recycling for limiting landfill, but many member states struggle with financial constraints, planning weaknesses and implementing waste management plans, including building new infrastructure. 
  • The report found that: “the Commission strengthened targets and other legal requirements but was late in initiating infringement proceedings regarding missed waste targets.”

Conclusion

The ECA recommends that the Commission addresses challenges in the recycling market, makes better use of monitoring and enforcement tools and assesses the costs, benefits and feasibility of introducing and/or harmonizing landfill and incineration taxes across the EU.

The European Court of Auditors (ECA) recently published a report examining the action taken by the European Commission (EC) and member states to achieve the European Union’s objectives for municipal waste between 2014-2024. The report assessed if the Commission’s legal initiatives and enforcement were fit for purpose; if the four sampled member states (Greece, Poland, Portugal and Romania) have made good progress towards achieving EU waste targets and objectives; and whether the member state projects sampled (co-financed with EU funds) were well implemented in terms of time, cost and capacity. In this Brief, we outline the EU’s municipal waste objectives and detail the main findings and recommendations of the report.

What is the EU’s approach to municipal waste?

According to the report, municipal waste – waste from households, offices, shops and other sources - accounts for 27% of the total waste generated in the EU. Managing municipal waste can be challenging due to its diverse composition, physical proximity to people and environmental and health impacts.

The ECA states that effective municipal waste management requires well organised separate collection of various materials (for example, glass and paper or cardboard go into separate bins), appropriate infrastructure for sorting, treatment, incineration and/or landfill, and a viable market for the recycled output. It adds that active participation in waste separation by citizens and businesses is ‘crucial’ for obtaining high-quality recyclable materials.

Legal requirements for municipal waste

EU waste policy aims to transition towards a circular economy. The ECA says that the EU strengthened legal requirements for municipal waste, such as targets for preparing for reuse and recycling for limiting landfill.

These include increasing the content of national and/or regional waste management plans (such as including an assessment of existing waste collection schemes); introducing a condition to be fulfilled before receiving reimbursement from the Commission for expenditure incurred on projects that have been co-financed by cohesion policy funds, requiring member states to demonstrate they have updated waste management plans which comply with the Waste Framework Directive; and requiring the use of economic instruments to incentivise or disincentivise certain behaviour.

The ECA points out that recycling facilities are scarce in some member states, while in others, some existing facilities – in particular those dealing with plastics – are at risk of closure due to rising costs, a lack of demand in the EU for their output, and imports of cheaper recycled and virgin plastic from outside the EU. The auditors add that the Commission has announced a new Circular Economy Act to be adopted in 2026, with the aim of addressing market and demand issues.

It also notes that many member states struggle with financial constraints, planning weaknesses and implementing waste management plans, including building new infrastructure. Separate waste collection remains at very low levels and waste tariffs for citizens do not cover all waste management costs.

The ECA highlights that:

“The Commission strengthened targets and other legal requirements, but was late in initiating infringement proceedings regarding missed waste targets.”

The report reveals that while some member states have made significant progress towards meeting the targets, others have shown only moderate progress, and a few have made little to no progress. Waste generation is mostly still growing as gross domestic product increases, with the waste prevention measures member states are required to implement aiming to ultimately decouple the two.

Apparently, it is difficult to establish whether certain member states’ struggles in meeting the targets are due to the number and/or ambition of the targets, a lack of effective action by member states, or possibly a combination of both.

Recycling market challenges

The report’s first recommendation is that the Commission should take measures to make circular economy practices in the EU (such as the recycling of materials) more economically viable, including providing a business case for recyclers. In order to do this, the Commission should identify the demand- and supply-side challenges that affect the single market for circular products and secondary raw materials.

The ECA states the target implementation date for this should be Q4 2026.

Utilizing monitoring and enforcement tools

The ECA also recommends that the Commission should allocate sufficient resources with a view to (a): ‘start infringement proceedings in a timely manner, ensuring deterrence and encouraging progress’. While acknowledging the Commission’s power of discretion in deciding whether or when to start an infringement procedure, the ECA states that such decisions should be based on ‘substantive, content-based’ criteria.

The auditors suggest (b): carrying out visits to member states based on the conclusions of the early warning reports and/or the state of implementation of the waste management plans and waste prevention programmes, to encourage them to make further progress in complying with EU law. They add that (c): assessments should also be undertaken in line with deadlines set by EU law. The target implementation date for these is from Q1 2028 for the 2025 targets (a), and Q4 2026 for (b) and (c).

Harmonizing landfill and incineration taxes at EU level

The ECA’s final recommendation is for the Commission to assess the costs, benefits and feasibility of introducing and/or harmonizing appropriate landfill and incineration taxes across the EU. The target implementation date for this is Q4 2026.

The report concludes that:

“The Commission has strengthened the targets and other legal requirements for municipal waste management; however, many member states face challenges in their progress towards circularity, mainly due to financial constraints and weaknesses in planning and implementation.”

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