Creating a digital roadmap for a circular economy

5 JULY 2019

Executive summary
Europe is currently in the midst of two transitions: the creation of a more circular economy and the digital revolution. These two major developments have the power to transform our economy and society. Major efforts are currently being taken by the European Union (EU) and national policymakers to promote both transitions – however, these efforts are rarely aligned.
This Discussion Paper shows that it is high time to manage them together. In so doing, the ultimate goal should be to ensure that they contribute to long-term sustainable economic, social and environmental prosperity, in alignment with the United Nation’s Sustainable Development Agenda and Paris Agreement. They should share the objectives of mitigating climate change, addressing environmental challenges like resource depletion and pollution, increasing competitiveness and innovation, contributing to industrial modernisation and security, and supporting social cohesion.
Data and digitally-enabled solutions like digital platforms, smart devices, artificial intelligence, the Internet of Things and blockchain are already contributing to the circular economy. They are used inter alia to improve the use of natural resources, design, production, consumption, reuse, repair, remanufacturing, recycling and the overall waste management.

It is important to recognise that digitalisation will not automatically lead to greater sustainability. In fact, there is a risk that if it is not guided well, it will result in unwanted rebound effects, such as an overdrive of a linear ‘take-make-dispose’ economy, and increase in greenhouse gas emissions. However, if adequately steered, data and digitally-enabled solutions could certainly boost the transition to a circular economy. They could help enhance connectivity and the sharing of information; make products, processes and services more circular; and empower citizens and consumers to contribute to the transition by increasing their awareness and enabling them to make sustainable choices and co-create knowledge.
The EU has the foundation to be ambitious: Europe is already an innovation hub using data and digitally-enabled solutions for greater sustainability. However, as many of these solutions are still small-scale or emerging, it is important to continue to build on this potential. With this in mind, why not set an EU-wide goal to become a global leader in using data and digitally-enabled solutions, for a more sustainable, circular economy?
To get this transition right, the EU must:
1) think systemically, define a vision and act. Maximising the synergies between digitalisation
and circular economy, and preventing negative externalities will require i) a digital review of the circular economy transition and ii) a sustainability review of the digital transition.
2) provide an adequate governance framework and economic incentives for a (digital) transition to a (digital) circular economy. It is important to recognise that this expands far beyond the traditional digital and environmental agendas; measures will need to be aligned with climate action and the wider sustainability agenda, and be supported by single market tools, industrial agenda, research and development, and social and consumer policy.
3) encourage collaboration across European society and economy as well as globally, and empower its citizens to contribute to the transition. This implies using existing European and global platforms to raise awareness of the linkages and exchanges, especially on improving information sharing across the value chains.