The EIB Circular Economy Guide: Supporting the circular transition

About the European Investment Bank

The European Investment Bank is the world’s biggest multilateral lender. The only bank owned by and representing the interests of the EU countries, the EIB finances Europe’s economic growth. Over six decades the Bank has backed start-ups like Skype and massive schemes like the Øresund Bridge linking Sweden and Denmark. Headquartered in Luxembourg, the EIB Group includes the European Investment Fund, a specialist financer of small and medium-sized enterprises.

The EIB Circular Economy Guide

Supporting the circular transition

May 2020

Contents

1. Introduction

2. The circular economy

3. EU policy framework

4. EIB lending to the circular economy

5. EIB circular economy financing and advisory

6. Project eligibility and screening

Annex 1 Circular economy reference websites and documents

Annex 2 Circular economy strategies

Annex 3 EU policies on the circular economy and bioeconomy

Annex 4 Circular economy and climate change mitigation

Annex 5 Typical circular economy investments and generic guidance

For more information, visit our website on www.eib.org/circular-economy or contact us at [email protected].

Abbreviations

3D three-dimensional

CDP Cassa Depositi e Prestiti

CO2eq carbon dioxide equivalent

DSCR debt-service coverage ratio

EBIT earnings before interest and taxes

EC European Commission

EFSI European Fund for Strategic Investments

ECBF European Circular Bioeconomy Fund

EIB European Investment Bank

EU European Union

EUR euro

GDP gross domestic product

Gt giga-tonne

ICT information and communication technology

Mt mega-tonne

RDI research, development and innovation

SME small and medium-sized enterprises

UNEP United Nations Environment Programme

1. Introduction

The circular economy concept is gaining attention as the consumption and use of resources increases to serve a fast-growing population with rising standards of living. Circularity refers to the circular flow and efficient use and reuse of resources, materials and products. This new economic model represents sustainable green growth, moving from a consumption and disposal-based linear model to a system that extends the life of products and materials and minimises waste. The circular model has many environmental, climate, social and economic benefits.

The circular economy is backed strongly by the European Commission and other EU institutions, as well as by a growing number of cities and countries across the European Union. It is also attracting increasing attention from the business community and public and private investors. The circular economy goes beyond resource efficiency and recycling. It provides the framework to develop new business models aimed at increasing the value, use and life of materials, products and assets and designing out waste from production and consumption.

In light of the European Commission’s new Circular Economy Action Plan[1], the EIB, as the EU bank, is supporting the transition to a circular economy, particularly in the European Union, but also in other parts of the world. The EIB has a long track record of lending to projects focusing on recycling and the recovery of waste and by-products in various sectors. We aim to increase lending to innovative circular economy projects aimed at systematically designing out waste, extending the life of assets and closing material loops. The EIB also offers circular economy advisory services, and is active in networking, sharing of best practices, connecting stakeholders and facilitating access to finance for circular economy projects. In light of this, this guide aims to:

a. promote a common understanding of the circular economy as