Methodology Three policy levers to develop the Circular Economy

In Luxembourg, the government has developed tools in three policy areas to encourage the Circular Economy: regulations, finance and knowledge. Wherever possible, all three levers will be used together to provide the best possible outcomes.

Trust and collaboration among everyone involved will be the key to making the Circular Economy thrive. A company cannot launch a circular business based on a Product-as-a-Service model if suppliers do not provide suitable raw materials, along with information about their composition. Equally, an idea will not succeed if it fails to attract customers, is disadvantaged by the regulatory framework (such as the types of financing available, legal constraints and the tax system), or if start-up funding is lacking. The government is committed to putting all these pieces together.

The regulatory framework

This is a combination of laws, regulations and standards that will gradually be phased in, for two purposes: to introduce mandatory action or constraints, and to provide guidance and guarantees. Examples would include:

  • Introducing Circular Economy business models and criteria for all public procurement contracts.
  • Creating CE labels and certifications for circular products and services.
  • Setting standards for reuse and repair, so that goods remain in a life cycle and retain their value.

The financial framework

A set of financial instruments will provide incentives, either positive or negative, to influence the behaviour of companies and citizens alike. They will also be used to correct market distortions and help to mitigate risks (for example, through insurance policies). Examples of these could include:

  • Government subsidies to support the development of Circular Economy businesses, projects and infrastructure.
  • Accounting approaches that help the growth of Product-as-a-Service (PaaS) business models, which are more 'circular' as they consume fewer resources than traditional sale and ownership models.
  • Incentives that encourage the repair, reuse and recycling of products.

The knowledge framework

This will mean developing a range of actions and tools for providing knowledge about the Circular Economy. The list would feature strategy documents, guidelines, consultancy, awareness-raising, training and basic education. Much of this knowledge is becoming easier to manage and share through the use of digital platforms. Learning has never been so easy to access. Examples would include:

  • Training courses for companies and start-ups to learn about the applications and business opportunities of the Circular Economy.
  • Providing clear information and labels about the circularity of products and services, both for businesses in the supply chain and consumers.
  • Making tools and guidance available for product designers, so that goods are sure to fit seamlessly into the Circular Economy before they leave the drawing board.
  • Integrating Circular Economy principles in basic education and training curricula in schools.
  • Supporting research, development and innovation (RDI) projects and activities to fill knowledge gaps.

Best results are achieved if the three levers are combined in order to reach a specific circularity goal in hands-on implementation projets, as illustrated in the scheme to the right.

A pilote will implement the circular economy project through a co-creation process in a specific sector, with the support of the National Coordination Unit

The objectives and indicators are defined in the projet and monitored by the Coordination Unit. The methodology is described in more detail in the Circular Economy Strategy document.

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