Increasing resource efficiency, preventing waste generation and using waste as a resource are at the heart of the circular economy and have a significant potential to reduce environmental pressure both within Europe and beyond its borders. At the same time the transition to a circular economy offers great potential for creating sustainable growth and jobs. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss. The transition to a circular economy can also help to address the growing concern over Europe’s dependency on imported resources and over securing access to critical raw materials, some of which play a fundamental role in the deployment of low-carbon, renewable energy technologies. 

The Waste Framework Directive, adopted in 2008, is the EU's legal framework for the treatment and management of waste in the EU. It introduces a priority order for waste management, called the waste hierarchy, and sets ambitious targets for recycling and recovery of waste. By 2025, member states are required to achieve a minimum recycling and recovery rate of 55% of municipal solid waste by weight with additional increases to 60% and 65% by 2030 and 2035 respectively. In addition to the overarching legal framework, the EU has many laws dealing with different types of waste. In 2023, following an in-depth analysis, the Commission has proposed a targeted amendment of the Waste Framework Directive,  with a focus on textile waste. The proposal aims to achieve a more circular and sustainable management of textile waste, in line with the vision of the EU Strategy for Sustainable and Circular Textiles. 

The European Commission adopted its first Circular Economy Action Plan (CEAP) in 2015. In 2020 a new Circular Economy Action Plan was released in support of the European Green Deal. The new action plan announces initiatives along the entire life cycle of products. It targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and the resources used are kept in the EU economy for as long as possible. It also introduces legislative and non-legislative measures targeting areas where action at the EU level brings real added value. The action plan highlights the role of Cohesion Policy funds in supporting the circular economy transition and ensuring that all regions benefit from the transition.

EU Cohesion Policy is key to making the circular economy a reality.  Targeting Cohesion Policy funding towards the circular economy will strengthen sustainable growth and competitiveness for all regions in Europe.

The 2021-2027 investment framework includes significant funding for circular economy and waste management. The scope for Cohesion Policy investment is broad, but priority is given to the higher levels of the waste hierarchy. For example, Cohesion Policy can support measures to prevent valuable materials from leaving EU value chains, measures to develop alternatives to raw materials, and measures to modernise or upgrade existing recycling and waste treatment infrastructure. Cohesion Policy investment can also target actions to raise awareness and promote sustainable consumption, as well as actions to improve the knowledge base on the circular economy and the monitoring of waste and material flows.

For the 2021-2027 programming period, a total investment of EUR 12.5 billion is planned in circular economy and waste management under Cohesion Policy, of which over EUR 8.6 billion is in EU funding (situation of November 2023). Taking this amount in relation to the total allocation of the funds programmed, this represents a 2,5% share.

In monetary terms, there are significant differences between Member States in their allocations to circular economy and waste management. This is partly explained by differences in the size of national allocations under Cohesion Policy and partly by the priorities set by Member States.  At the heart of Cohesion Policy is the idea that less developed Member States and regions receive more support in order to help them catch up and to reduce the economic, social and territorial disparities within the EU.

Italy has allocated the largest amount to circular economy and waste management under Cohesion Policy. In addition to Italy, several other countries have significant allocations from the funds contributing to circular economy and waste management objectives (e.g. Greece, Poland and France). Two countries have decided not to use Cohesion Policy funds to contribute to circular economy and waste management objectives.

The budgetary allocations for the types of investment that benefit circular economy and waste management are illustrated in this chart. There are eight types of investment related to the circular economy and waste management. Investments range from household waste management to the use of recycled materials and environmentally friendly production processes. 

The highest allocations are for the management of household waste and the promotion of environmentally friendly production processes and resource efficiency in small and medium-sized enterprises, while the lowest allocations are for the management of industrial residual and hazardous waste.

Depending on the specific development needs of EU countries and regions, the composition of investment contributing to circular economy and waste management objectives varies considerably between Member States. In many Member States, the highest allocations are for household waste management (e.g. Cyprus, Malta and Romania). In some other Member States, the support to environmentally-friendly production processes and resource efficiency in small and mid-size enterprises dominate investment in circular economy and waste management (e.g. Denmark, Slovenia and Austria). The graph below shows the share of each type of intervention in the total allocation for circular economy and waste management by Member State.

Cohesion Policy programmes use common indicators and specific national / regional indicators to measure the actions undertaken and the benefits of the investments. The indicators are divided into output and result indicators. Output indicators reflect the direct deliverables of the actions financed by the programmes, while result indicators measure the outcomes (direct benefits) of the interventions supported. In the period 2021-2027, output and result indicators are directly linked to the actions supported.

For circular economy and waste management, there are a total of three common output indicators and three common result indicators for the period 2021-2027. The output indicators reflect the additional capacity for waste recycling, investments in facilities for separate waste collection and the amount of waste prepared for re-use. The result indicators measure the annual tonnages of waste used as a raw material, waste collected separately, and waste recycled. The charts below show the overall evolution of the target values, decided values, and implemented values of the indicators as the programming period progresses. Output indicators are in the left column, result indicators in the right column.

How could investments in 2021-2027 be translated into concrete projects? Some ideas from the 2014-2020 funding period show what is possible:

The second phase of a project to establish a comprehensive and sustainable waste management system for Šibenik-Knin County, Croatia has been implemented with EU funding. Construction of the Bikarac waste management centre is the main element of the project. In the second phase, a mechanical biological treatment plant was built at the centre and two waste trans-shipment stations have been set up at Biskupija and Pirovac.

Total investment for the project is EUR 29 177 382, with the the EU’s European Regional Development Fund contributing EUR 14 682 427.

Link to the project.

The Centre of Competence (Clean & Circle) is a modern research facility where applied science will be used to help Bulgaria become a circular society with a low environmental footprint. The aim is for research results to be commercialised into new products and services. The focus is on water and wastewater use and reuse, renewable energy and waste management.

Total investment for the project is EUR 12 101 218, with the EU’s European Regional Development Fund contributing EUR 10 286 035.

Link to the project.

The overall mission of the project, led by Austria’s ABF-BOKU, is to ‘Give food waste a second chance’ by helping to redistribute the surplus. Focusing on urban areas in selected Central European countries, the project also aims to raise awareness, promote training, and develop educational programmes and tools on how to prevent food waste so that less of the valuable resource ends up as waste in landfill.

Total investment for the project is EUR 2 363 175, with the EU’s European Regional Development Fund contributing EUR 1 938 349.

Link to the project.

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