EU opens door of financing for SMEs shifting to the circular economy - Main contents

Karmenu Vella, European Commissioner for Environment, Fisheries and Maritime Affairs, on the new Circular Economy Package funding opportunities.

Moving to an economy that reuses more and wastes less is essential. Europe is skill rich but resource poor. We need to use our world class skills to make our economy more 'circular' - by reusing our resources. We need to make 'waste' a valued resource. Those best placed to make this shift are our small and medium enterprises. But to do that they need help and they need certainties.

That is why I am happy to see the European Commission and the European Investment Bank in partnership to provide that help and to give that certainty.

On 10 December we signed an amendment to the InnovFin Delegation Agreement that will enable higher-risk, yet innovative sustainable business models and plans to access credit through InnovFin - an EU finance support programme under Horizon 2020.

Europe needs to maintain the value of products and materials in the economy through reuse and recycling and reducing waste. The funding we agreed to can relieve the pressure on our resources and environment. It can create jobs and social cohesion. And it can spur innovation.

Moving to a circular economy can break patterns. We can reinvent our business model, and build a new generation of European enterprises, making and exporting clean products and services around the globe. This the thinking behind the circular economy package adopted by the Commission in early December.

This partnership with the European Investment Bank is all about making real changes on the ground. The EU’s financial sector will help business so that they can make the breakthroughs that moving us towards a circular economy future.

This will help companies take they innovative risks needed to make real design breakthroughs. If we want a switch to more durable, repairable, and more resource-efficient products, then they need to be designed to keep their value for longer. Re-use, repair and re-manufacturing are more beneficial than recycling, and better design is the key to enabling that change.

This funding was previously only available to innovative industrial and technology enterprises. It has now been extended to mid-size enterprises. This was promised in the Circular Economy package, and we are extremely glad to be delivering it so soon.

The report on 'Access to finance for circular economy' prepared by the Bank's InnovFin Advisory Services has delivered excellent groundwork to advance financing for the circular economy.

The Commission will help SMEs benefit from the business opportunities of increased resource efficiency with the creation of the European Resource Efficiency Excellence Centre.

We will fully use the Horizon 2020 Work Programme for 2016-2017, which includes a major initiative on 'Industry 2020 in the circular economy' with funding of over €650 million.

This comes in addition to numerous existing Horizon 2020 topics and ongoing projects that support the circular economy. Together with the EIB, and the European Investment Advisory Hub, we will encourage applications for funding and support the development of projects relevant to the circular economy.

The proposals are a powerful enabling framework, but we will also need substantial private sector funding directed towards the circular economy. The European Fund for Strategic Investment (the 'Juncker Plan') is one tool to support this. The Commission would like to also guide future investment, steering it more towards green choices, with progressive divestment from unsustainable activities.

In the coming months, our services will look more closely into setting up a platform bringing together the EIB, the Commission and national banks to increase awareness on circular economy financing.

This is only part of the circle that makes up our strategic approach but it is a central one. Our consumers, our citizens, not to mention our climate, will all benefit from a circular economy.

That is why it is vital that we provide the investment base that business needs to innovate our way to a more sustainable future.