Environment: Italy at the top in circularity trends in the EU

In Italy, households are not the only source of saving. Almost a fifth of what we produce comes from recycling: our circular material use rate is second only to France. Italy ranks first in terms of circularity of production among the top five EU economies: resource productivity is worth on average 3.7 euro per kilo, compared to the EU average of 2.5 euro per kilo. In short, our economic and production system loves circularity, and so do small and medium-sized enterprises: 65% said they are implementing circular economy practices, more than double compared to 2021.

These are highly topical data because, exactly one month before the European elections, the circular economy is one of the issues at stake: the success of the Green Deal depends on circularity. And Italy has always played a leading role in Europe when it comes to circular economy. The data from the sixth report on the circular economy in Italy by the Circular Economy Network (CEN) and ENEA, were presented during the annual conference on the circular economy, which took place at the Roman Aquarium.

For the first time, this edition of the Report adopted European Commission indicators to measure the circularity performances of the five largest economies of the European Union (Italy, France, Germany, Spain and Poland): production and consumption, waste, secondary raw materials, competitiveness and innovation, ecological sustainability and resilience. Even with these "new" indicators, Italy's ranked first (45 points) in terms of circular economy, followed by Germany (38), France (30) Poland and Spain (26). Italy's leadership is mainly due to waste management.

We rank first for the waste recycling rate. Specifically, in 2021 we had a packaging waste recycling rate of 71.7%, 8% higher than the EU27 average (64%). In Italy municipal waste recycling grew by 3.4% between 2017 and 2022, reaching 49.2%. The EU average is 48.6%, Germany was the top recycler with 69.1%.

We also lead the way in WEEE recycling: in 2021 it was 87.1% (minus two percentage points compared to 2017), with an EU average of 81.3%. All this considering an average per capita production of municipal waste of 513 kg in 2022 in the EU; while in Italy we went from 504 kg/inhabitant in 2018 to 494 kg/inhabitant in 2022.

In 2022, resource productivity in Italy generated, for every kilo of resources consumed, 3.7 euro of GDP, +2.7% compared to 2018. The EU average in 2022 was 2.5 euro/kg. The figure for the other four main European countries is also lower than Italy’s.

As regards the circular material use rate, i.e. the ratio between the circular use of materials and the overall consumption of materials, Italy confirmed its position in 2022 with 18, 7%.

Investments in some circular economy activities in the EU27 amounted to 121.6 billion euro, 0.8% of the GDP, in 2021. Italy, with 12.4 billion euro (0.7% of GDP ), ranked third, behind Germany and France. However, compared to 2017, in this area it recorded a 14.5% increase.

Plus, a circular economy can have a positive impact on employment. In 2021, in the EU27, there were 4.3 million people employed in some circular economy activities, 2.1% of the total; in Italy 613,000, i.e. 2.4%, +4% compared to 2017; we ranked in second place after Germany, which employed 785,000 workers in these sectors (1.7% of the total).

The added value of the entire EU relating to some circular economy activities in 2021 was 299.5 billion euro, 2.1% of the total economy; in Italy it was 43.6 billion euro, 2.5% of the total (it was 2.1% in 2017). It also increased in Spain and Germany, while it decreased in France and Poland.

So, was everything okay? Not exactly. For instance, the consumption of materials in Italy in 2022 was 12.8 tonnes/inhabitant, lower than the European average (14.9 t/inhabitant) but growing (+8.5%) compared to the 11.8 t/inhabitant in 2018. Again in 2022, Italy's dependence on imports of materials (46.8%) was more than double the European average (22.4%), although decreasing (-3.8%) compared to 2018.

Finally, as regards patents relating to waste management and recycling, in 2020, 0.46 were filed for every million inhabitants, i.e. a total of 206 in the European Union. In Italy only 21 patents (0.36 per million inhabitants): -25% compared to 2016. Taken together, the circularity trend indicators, based on the dynamics of the last five years, indicate a certain difficulty for Italy in maintaining its leading position.

 “A circular economy is key to accelerate the climate transition and increase business competitiveness,” said Edo Ronchi, president of the Circular Economy Network. “Even more so for a country poor in raw materials and above all, in the current context, characterized by low growth and the stringent constraints of repaying public debt. Italy can and must do more to promote and improve the circularity of its economy, with measures upstream of products to combat waste and consumerism and increase resource use and efficiency in production; promote prolonged use, reuse, repair and shared use of products; increase the quantity and quality of  recycling and the use of secondary raw materials".

A survey on SMEs and the circular economy

An important focus this year is upon small and medium-sized enterprises, the backbone of the Italian production system. With a survey carried out between December 2023 and January 2024 in collaboration with the CNA, presented at the CEN Conference, 800 small entrepreneurs were asked (49% in services, the remaining half in industry, of which 35,5% in manufacturing and 14.1% in construction) their views and what actions do they take concerning green policies. 65% of the respondents said they implement circular economy actions: more than twice compared to 2021.

Furthermore, 10% of companies intend to embrace circular economy strategies in the near future. The interventions carried out most often concern the use of recycled materials (68.2%), the reduction of packaging (64%), interventions to enhance product durability and reparability (53.2%). 70.4% of companies believe that moving towards a more circular economy could increase environmental sustainability and efficiency (35.6%), reduce production costs (61%) and boost innovation (34.2%). For 61% of the companies the benefits of circular economy measures include cost reduction. The survey confirms that small businesses can play a leading role in the transition towards a circular economy. But public policies need to be more oriented towards circular choices.

Critical raw materials: copper and rare earths, the only option is recycling

In 2023 the European Commission identified 34 “critical raw materials” crucial to our economy. 17 were classified as strategic: copper is one of these. And it is estimated that its demand could double by 2050. The problem is that Europe has only 3% of global reserves, while the greatest concentration is found in Chile (31%), Peru (11%), Democratic Republic of Congo (9%). Hence the use of "secondary copper": copper can be recycled infinitely and is already recycled in significant quantities which need to be further increased. The same goes for other raw materials “rare earths”, some of which, used in permanent magnets, are also strategic for renewables, electric mobility and electronics.

Globally, approximately 85% of light rare earths and all heavy rare earths used come from China. Also in this case, the demand for rare earths could increase significantly, even tenfold by 2050. The world reserves of rare earths are concentrated, once again, in China (44 Mt), Vietnam (22 Mt), Brazil (21 Mt ) and Russia (12 Mt). The main supplier - around 80% - of refined materials to Europe? Always China. The same applies to copper: it is possible to recover rare earths from the recycling of end-of-life materials, a less polluting practice than the primary one which also allows access to sources with higher concentrations of rare earths than those found in nature. It is not a trivial issue: the economic activities that use rare earths are responsible for 11.4% of the turnover of the entire Italian manufacturing industry. Therefore, becoming independent from imports through the circular economy is more than a hope, a necessity.

Many themes were at the center of the national conference on the circular economy which took place on 10 May, divided into two sessions, attended by hundreds of people, including those present in the room and those who participated via the web. The morning began with the video message from the Minister of the Environment and Energy Security, Gilberto Pichetto Fratin, followed by the presentation of the 2024 Report by Edo Ronchi. The in-depth study on ecodesign was coordinated by Claudia Brunori, Head of the ENEA Department of Sustainability, Circularity and Adaptation to Climate Change of Production and Territorial Systems. Two thematic panels were held, one dedicated to the investigation into small and medium-sized enterprises by Marco Baldi, head of the CNA Studies and Research; the other on the scenarios opening up after the approval of the packaging regulation. In the afternoon, the interventions of some protagonists of the Italian circular economy.

 “The indicators on the circularity of our country confirm Italy's excellent performance on various aspects, including the recycling percentages and circular use rate of materials. However, the significant increase in resource consumption highlights the need for a paradigm shift in the economic model and lifestyles, to focus on the great potential of the circular economy in terms of more efficient use and management of resources in production chains, in cities and in the territories", said Claudia Brunori, Head of the ENEA Department of Sustainability, Circularity and Adaptation to Climate Change of Production and Territorial Systems. “To have successful and long-lasting results it is necessary to revolutionize the way in which products are designed and manufactured, integrating circularity criteria into production processes. We need to design and produce objects that are more durable and easier to reuse and recycle, but also to update and repair. For a 'complete' ecological transition, consumers must also be informed and made as aware as possible, providing them with tools to understand the impact of their lifestyles on the environment".

The VI National Conference on the circular economy was organized by the Circular Economy Network in collaboration with ENEA under the patronage of the Ministry of the Environment and Energy Security, the Ministry of Enterprises and Made in Italy and the Representation in Italy of the European Commission.