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Demonstration of systemic solutions for the territorial deployment of the circular economy

Proposals funded under this topic will form part of the demonstration projects for the implementation of the European Commission’s Circular Cities and Regions Initiative (CCRI) and must be carried out in close cooperation and coordination with it. The CCRI is part of the new Circular Economy Action Plan and aims to support the implementation of circular economy solutions at local and regional scale. The CCRI will be implemented in the coming months: https://ec.europa.eu/research/environment/index.cfm?pg=circular.

Each proposal is expected to implement and demonstrate circular systemic solutions for the territorial deployment of the circular economy (including the circular bioeconomy) in one ‘circular territorial cluster’.

A ‘circular territorial cluster’ (hereinafter referred to as ‘cluster’) is a socio‑economic and environmental system composed of all relevant actors and dimensions to implement, demonstrate and facilitate the replication of at least one circular systemic solution (hereinafter referred to as ‘systemic solution’). In this context, a systemic solution is a cross-sectoral demonstration project for the territorial deployment of a circular and climate-neutral economy. Examples of relevant actors for a cluster are: public administrations and utilities; private sector services and industries, including small and medium enterprises (SMEs), scientific and innovator communities; financial intermediaries; civil society, including citizens and non-governmental organisations and philanthropy. National governments could also play an important role in providing support to the implementation of these systemic solutions. Each cluster should include a geographically cohesive territory (e.g. a group of neighbouring urban, peri-urban and rural areas, not necessarily limited by administrative or national borders) or territories, linked by a systemic solution. The composition and dimension of a cluster should be clearly defined and justified in the proposal.

Ideally each cluster should have a Circular Economy Action Plan (CEAP) in which the proposed systemic solution is embedded.

It is essential that the systemic solutions implemented demonstrate the role of the territorial circular economy to reconcile our economies and human activities with the planetary boundaries and to respond to citizens’ needs in the wake of systemic crisis such as climate change, pollution, waste generation, biodiversity loss and the adverse socio-economic and environmental impacts of the COVID-19 crisis. The systemic solutions implemented should increase resilience and provide concrete options for socio-economic recovery as well as generating sustainable and inclusive growth in their clusters. Sustainability, regeneration of ecosystems, inclusiveness and social justice should be at the core of each systemic solution. Particular attention should be given to avoid social, gender and intergenerational inequalities. Potential distributional effects of moving from a linear towards a circular economy should also be addressed in order to produce just and fair outcomes, to boost urban and regional economies and create jobs.

The systemic solutions implemented should address economic, social and environmental dimensions of the transition towards a circular economy and include science, technology and governance components. They should demonstrate circular governance models and support the active participation of all relevant actors in each cluster. These systemic solutions should prove the effectiveness and sustainability of circular business models. They should support a sustainable and effective symbiosis within and between economic sectors, foster cooperation along and/or across value chains and increase the integration between production, services and consumption.

It is essential that the systemic solutions implemented address the major challenge of effectively applying the circular economy concept beyond resource management and recovery in the waste and water sectors. It is essential that systemic solutions, and the economic sectors involved in them, are selected and based on a detailed analysis of the cluster’s socio-economic needs to be addressed, circular potential to be exploited, challenges to be tackled and, when feasible, smart specialisation priorities. The selection of economic sectors in each cluster should be clearly defined and justified in the proposals and, when relevant, it should take into account international dimensions with regards to value and supply chains. In addition, thought should be given to the importance of the new Circular Economy Action Plan key product value chains - batteries and vehicles, electronics and ICT, packaging, plastics, textiles, construction and buildings, food, water and nutrients - to the economy of Europe as well as delivering on Green Deal objectives.

The systemic solutions implemented should also help to create critical mass for public and private investments and public procurement pull for new solutions, and should contribute to overcoming market failures. They could test public-private partnership models, interregional cooperation mechanisms and multilevel funding synergies useful for de-risking business investments. They should improve consumers’ understanding and acceptance of circular and climate-neutral services and products. Proposals should also explore synergies with other funds, including Cohesion Policy funds, the Just Transition Fund and InvestEU, hereby showing pathways to market uptake.

The systemic solutions implemented could include criteria and elements of eco-design, industrial symbiosis and industrial ecology. They could promote the role of ecosystems services and nature-based solutions in the circular and climate-neutral economy. They should promote the use of natural capital accounting into business strategy and decision making.

The systemic solutions implemented should facilitate technology deployment, including digital technologies. Systemic solutions should also facilitate the industrial exploitation of the already demonstrated research results and, when relevant, contribute towards connecting SMEs to the value chains of larger companies.

Systemic solutions should ensure the sustainable circular use and valorisation of local resources. Special attention should be dedicated to more efficient and sustainable businesses, processes and value chains promoting zero-waste solutions and recycling quality, increasing products’ function recovery and reuse, using secondary raw materials (including critical raw materials) and valorising local bio-based feedstock.

It is essential that the systemic solutions implemented also involve one or more community‑based innovation schemes, such as local repairing schemes for products. These schemes are expected to promote circular social practices and address environmental, behavioural and cultural aspects of the territorial transition towards a circular economy. The systemic solutions implemented are expected to include specific training for local actors and education services for local communities.

Each systemic solution should identify, analyse and when relevant, quantify the economic, social and environmental benefits and challenges related to its implementation and demonstration in its respective cluster. It should include the monitoring and evaluation of the cluster’s transition towards a circular economy, identify its strengths and weaknesses as well as their causes. It should analyse regulatory obstacles and drivers and provide clear and precise policy recommendations to improve circular economy related EU and national/local regulation (including, when relevant, inputs on standardisation and certification). It should analyse the effectiveness of the available financial schemes for territorial circular solutions and propose concrete options for their improvement. Environmental externalities should be addressed and life cycle assessment (LCA) should be included in each systemic solution. Benchmark cost and environmental footprint of each systemic solution should be compared with equivalent linear solutions. The information and data collected and the knowledge gathered by the projects under this topic must be shared with the CCRI. CCRI will ensure a wider dissemination among policy-makers and stakeholders not involved in these proposals.

It is crucial that the systemic solutions implemented and their business models have a high replicability and scalability potential. This is fundamental to facilitate the replication of circular solutions in other areas.

It is essential that proposals dedicate resources to engage in cooperation with other circular territorial clusters funded under this topic and to transfer relevant information and good practices to policy-makers and stakeholders not involved in the proposals. Actions should contribute to the open access to information on circular systemic solutions across Europe. Setting up twinning exercises between the clusters could be an efficient way to facilitate the exchange of experiences and expand to new activities along and across value chains. The cooperation and coordination between projects and clusters under this topic and their dissemination activities must be carried out in close cooperation and coordination with the CCRI.

It is essential that proposals ensure complementarity and cooperation with existing relevant European projects and initiatives on the circular economy and the circular bioeconomy, with special reference to the local and regional scale, and avoid overlapping and repetitions.

The technology readiness level (TRL) of each circular solution should be within the 6-7 range at the end of the project. Each proposal should clearly state the starting and end TRL of the key technology, processes and value chains targeted in the project.

The Commission considers that proposals requesting a contribution from the EU of between EUR 10 to 20 million would allow the specific challenge to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Boosting circularity is part of the policy response to address systemic crisis such as climate change, pollution, waste generation, and biodiversity loss. Circular economy can play an important role in the EU’s recovery from the adverse socio-economic and environment impacts of the COVID-19 crisis, by providing systemic solutions for sustainable growth and economic recovery. As indicated in the European Green Deal Communication, with increasing global consumption and growing pressure on resources there is an urgent need to decouple economic growth from resource use and to ensure a swift transition to climate-neutral and circular solutions. Europe also needs to increase its resilience in the face of uncertainty in the supply of critical raw materials and to increase the security of its value chains such as for example the new Circular Economy Action Plan key product value chains: batteries and vehicles, electronics and ICT, packaging, plastics, textiles, construction and buildings, food, water and nutrients[[https://ec.europa.eu/environment/circular-economy/pdf/new_circular_economy_action_plan.pdf]]. A circular economy which is sustainable, regenerative, inclusive and just can help our economies to function within the boundaries of our planet by restoring natural systems, reducing GHG emissions and minimising loss of natural capital and biodiversity. It can also connect environmental policies with social justice through just transition ensuring environmental sustainability, jobs and social inclusion. Where relevant, attention should also be paid to occupational health and safety aspects and potential challenges of the transition towards a circular economy.

It is essential that the transition to a sustainable, resource-efficient and circular economic model also delivers on social objectives and contributes to sustainable human development.

The circular economy concept should be a central component in local and regional economies, which have a suitable scale for closing resource loops, creating sustainable circular ecosystems and designing participatory community-based innovation schemes. An increasing number of cities, regions, industries and businesses are engaged in testing and improving circularity in their territories, economic sectors, value chains and services. Nevertheless, the concrete implementation of systemic solutions for the territorial deployment of the circular economy still needs to be demonstrated and replicated effectively in other areas. In particular, a major challenge is how to effectively apply the circular economy concept beyond traditional resource recovery in waste and water sectors. The EU added value can be obtained through the demonstration of territorial systemic circular solutions in one territory and their replication in other areas in Europe. This process of demonstration and replication of circular systemic solutions will multiply the local contribution to achieving the policy targets of the European Green Deal, the Circular Economy Action Plan[[https://ec.europa.eu/environment/circular-economy/]], the Bioeconomy Strategy[[https://ec.europa.eu/research/bioeconomy/index.cfm?pg=policy&lib=strategy]] and the European Industrial Strategy[[https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/european-industrial-strategy_en]].

Proposals are expected to contribute to the implementation of the CCRI by providing policy-makers, public and private investors and local communities with concrete and demonstrated examples of circular systemic solutions at local and regional scale with the following impacts:

  • decoupling of economic and human activities from the consumption of finite resources and GHG emissions, ensuring the transition towards circular and climate-neutral economy;
  • improved sustainability and circularity of clusters’ economic sectors, natural ecosystems, management and valorisation of local resources;
  • emergence of circular business opportunities and a structured pipeline of investment projects;
  • increased circular and climate-neutral practices among citizens and their participation in systemic solutions;
  • creation of jobs in the short to medium term;
  • more effective development of circular solutions through knowledge transfer between the territorial clusters funded under this topic and other territories across EU member states and associated countries ;
  • more effective widespread uptake and easier replication, scalability and visibility of circular systemic solutions and hence multiplication of the economic, social and environmental benefits to achieve the policy targets of the European Green Deal, Circular Economy Action Plan, EU Bioeconomy Strategy and the European Industrial Strategy at local, regional, national, European and international levels.