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Circular economy could benefit EU by £1.28tr

Europe could benefit by £1.28tr by 2030 if it adopts circular economy (CE) principles, according to research from the Ellen MacArthur Foundation (EMF).

The EMF study Growth Within, conducted with McKinsey Center for Business and Environment, found that Europe is on course to generate half this amount (£0.64tr) following its current linear development path.

Primary resource consumption could drop by 32% by 2030 and 53% by 2050 if CE doctrines were implemented, the report claims. These figures were reached by measuring car and construction materials, real estate land, synthetic fertiliser, pesticides, agricultural water use, fuels and non-renewable electricity.

Other advantages the report found from adopting CE principles included:

  • average disposable income for EU households would increase by €3,000 (£2,130), 11% higher than the current development path
  • 11% GDP increase by 2030 versus today, compared with 4% in the current development path
  • Cost of time lost to traffic congestion would decrease by 16% by 2030 and close to 60% by 2050
  • Carbon dioxide emissions would drop by 48% by 2030 or 84% by 2050

McKinsey director Martin Stuchtey said: “The findings are the result of a nine-month study, drawing on the expertise of academia, government and industry. The insights of the report have been derived through over 150 interviews and three in-depth sector analyses.

“We found that businesses that work on the basis of circular principles are among the fastest growing in the economy.”

Ellen MacArthur

Dame Ellen MacArthur (left) said: “The economy is undergoing profound transformation as the technology revolution reaches scale. This report has shown that, by applying CE principles, we can catalyse this change, achieve a real system shift, and open a new era of growth and development, decoupled from resource constraints.”

MacArthur and Stuchtey presented their findings at the European Commission’s special conference in Brussels on 25 June which is feeding into its revised CE package on 25 June.

Sustainability fund Stiftungsfonds für Umweltökonomie und Nachhaltigkeit also contributed to the report.

EMF has also released a complementary toolkit for policymakers, offering step-by-step methodology to help transition towards a CE.

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