Fortum welcomes EU commission package on a circular economy

03 December 2015, 13:47 EET

The Circular Economy package released on 2 December 2015 recognises that recovering electricity and heat for a highly efficient waste-to-energy system is an essential part of a circular economy.

On 2 December 2015, the European Commission released the Communication "Closing the loop - An EU action plan for the Circular Economy". The current package replaces the previous one, withdrawn by the EC in February 2015. The package includes several initiatives towards a Circular Economy (CE) and is accompanied by the package of legislative proposals for modification, including the Directive on Waste, Directives on Packaging and Packaging Waste, and the Directive on Landfill of Waste as well as several others. Today, on average, just 40% of the waste produced by EU households is recycled, but this figure fluctuates between 5% and 80% across Member States.

"The objective of a circular economy is to maintain the value of products, materials and resources in the economy for as long as possible, while minimising the generation of waste." Fortum aligns with the CE concept, e.g. by having an increased focus on renewable electricity (hydro, solar and wind) and combined heat and power production (biomass, pyrolysis oil and non-recyclable waste) sources, and by utilising via smart district heating (DH) networks such heat sources that would otherwise be lost (customers' excess and industrial waste heat). Fortum is constructing and operating modern, high-efficiency waste-to-energy plants in Sweden, Lithuania and Poland1). These plants recover energy from about 1.2 million tonnes of different waste, annually produce 0.6 TWh of electricity to the grid, and supply over 2 TWh of heat to local DH networks.

Waste management plays an essential role in a circular economy

Fortum welcomes the CE package because it recognises that recovering electricity and heat for a highly efficient waste-to-energy system is an essential part of a circular economy, i.e. “turning waste into a resource is an essential part of increasing resource efficiency and closing the loop of a circular economy”. The linear economy model is gradually phasing out and, at the same, we are giving our full support to improving the reuse, recycling and recovery of materials, products and energy. The Communication also includes several initiatives to boost the reuse and recycling of materials and products.

The waste hierarchy establishes a priority order – from prevention, preparation for reuse, recycling as well as energy and material recovery through to disposal, such as landfilling. Recovering energy is, in most cases, preferable to landfilling it, both environmentally and economically. The action plan also covers all types of waste, be it generated by households, business or industry. The Commission is proposing new targets by 2030: a 65% recycling target for municipal waste, a maximum 10% for the landfilling of municipal waste, and an average recycling target of 75% for all packaging waste. It further proposes legislative emphasis on the separate collection and sorting of waste as the key enabler and the gradual landfilling reduction as a highly positive signal boosting the circular economy.  The reporting of the recycling targets shall be based on input to the final recycling process.

Measures towards better-quality recycling

At present, secondary raw materials still account for a small proportion of the materials used in the EU. The Commission proposes development of EU-wide quality standards for secondary raw materials (in particular for plastics), and it is proposing improvements to the rules on 'end-of-waste'. We welcome the greater harmonisation and simplification to clarify those rules, as well as measures for waste prevention. Harmonisation of end-of-waste conditions for certain substances and objects after the recovery operations will bring needed clarity to when and on what conditions further re-usage is no longer possible, and thus, in many cases, adds to the prospects for energy recovery.

Harmonisation and simplification will also facilitate the cross-border circulation of secondary raw materials to ensure that they can be traded easily across the EU.  Fortum recognises these efforts towards better-quality, incentivise the prevention of waste, shift the focus from quantity to quality, and strengthen the environmental angle.

Future role of energy recovery from non-recyclable waste

The integral role of waste-to-energy in the waste hierarchy and as an essential part of a circular economy has been acknowledged and will be further addressed in the Energy Union's Communication on Waste-to-Energy, expected during 2016. It will focus on exploiting the potential of waste-to-energy by establishing synergies between resource efficiency, energy efficiency, the circular economy and climate change. The efficient utilisation of existing and new capacities will be feasible when it replaces the use of fossil fuels in electricity and heating, and when cross-border trade of non-recyclable waste destined for energy recovery is encouraged.

More information:
Esa Hyvärinen, Senior Vice President, Corporate Relations, tel. +358 10 453 2244
Harri-Pekka Korhonen, Head of Heat Policies and Regulation, tel. +358 10 452 9321
Monika Kuusela, Senior Manager, Heat Policies and Regulation, tel. +358 10 452 0874

1) These figures include also volumes from the associated company Fortum Värme.