Setting Targets for the Circular Economy

Over the past decade, the EU has introduced extensive environmental policy instruments for a circular economy. The ambition is to reduce the environmental impact of resource use through regulations and incentives for increased resource efficiency, but the desired reduction in resource use has not been achieved yet. One explanation could be the policy's one-sided focus on resource efficiency. Resource efficiency usually leads to lower costs, which provide space for increased consumption, which in turn stimulates increased production, resulting in overall increased resource use. One possible way forward could be to set caps on resource use in accordance with planetary boundaries. Similar instruments already exist for the climate, such as the European Trading Scheme (ETS). What is the way forward to develop and implement similar instruments for resources, considering political and market conditions?

In this project, RISE, Lund University, and Cirkelar, together with Ragn-Sells and Volvo Cars, investigate how instruments for a circular economy can be designed so that resource use remains within planetary boundaries. We do this by focusing partly on policy targets aimed at the industry in general and partly on industry-specific instruments in a case study of the Swedish automotive industry.

The automotive industry's large resource use and upcoming environmental requirements within the sector imply that the project's focus on targets for resource use and how they can affect the automotive industry has great potential to influence resource management and total resource use. The project results can provide useful insights for the Swedish industry to better understand potential future requirements, and specifically which legal requirements can actually help reduce resource use and provide competitive advantages.