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Hundreds of Millions for Circular Economy Projects in Poland

ECOLOGYHundreds of Millions for Circular Economy Projects in Poland

In the new financial perspective, several hundred million PLN will be allocated to support business and local government projects in the field of the circular economy. An example of this is the competitions launched in June by PARP for the micro, small, and medium-sized enterprises sector for projects related to the circular economy. EU legislation is also focused on circularity, as it is one of the key conditions for achieving climate neutrality. Experts at the Polish Circular Forum 2024 emphasized that the need for investing in a closed-loop economy is being recognized by an increasing number of industries and companies, seeing it not just as a requirement of EU climate policy but also as a way to build a competitive advantage.

The circular economy is one in which there are, by definition, no waste products. Every material is treated as a resource for reuse, thereby reducing waste and utilizing resources efficiently. This, in turn, leads to a reduction in greenhouse gas emissions.

“The transformation of enterprises towards a circular economy involves investment outlays. It requires actions related to technology adaptation, research and development activities, and direct changes in the enterprise, such as organization, management methods, or human resources. Therefore, investments must also be made in areas related to digitization, which supports the circular economy. This shows that the entire process that needs to be carried out in a company is very extensive and often involves significant financial resources,” says Agnieszka Zdanowicz, Vice President of the Management Board of the Circular Economy and Recycling Cluster – National Key Cluster.

Investments in modern waste processing technologies and the development of recycling infrastructure are key elements for the effective implementation of the circular economy. On June 25, PARP will start accepting applications under the KPO action “Investments in the implementation of environmental technologies and innovations, including those related to the circular economy.” The support will cover SME projects aimed at developing and implementing environmental technologies, including those related to the circular economy. Entrepreneurs can receive grants of up to 3.5 million PLN.

According to the expert, in the new EU financial perspective until 2027, enterprises can obtain significant funds for this purpose.

“They can finance activities that, on the one hand, have greening components, and on the other hand, change business models, support eco-design processes, purchase new technologies, but also support energy efficiency, transition to green energy, and all aspects that support company development, management, and resource savings. There are many possibilities, including European Funds for Modern Economy, ecological credit, both grant and repayable funds for SMEs distributed at the national level by the Polish Agency for Enterprise Development, but also at the European Commission level, available through EU programs. It’s worth looking into this,” says Agnieszka Zdanowicz.

In mid-June, PARP announced the start of the second stage of the “Circular Economy in SMEs” action funded by the European Funds for Eastern Poland 2021–2027. The call focuses on the implementation of advanced circular economy transformation business models developed in the first stage of the action. Micro, small, and medium-sized entrepreneurs conducting business in Eastern Poland can apply for support (up to 3.5 million PLN). In July, PARP will launch another call for the first stage of this action, where companies focus on developing a circular transformation business model. The funding can amount to nearly 82,000 PLN. In the previous call, applications were received from over 600 companies, out of which 326 entities were selected. This shows the high interest of entrepreneurs in circular projects. Importantly, this popularity goes beyond the waste sector, as applications were submitted by bakeries, laundries, food cooperatives, small service points, as well as construction and packaging companies.

“One of the key elements of the circular economy is eco-design. The regulation in this matter has been in force in the EU for several years but in a very limited form, covering a few products related to energy efficiency, such as radiators and refrigerators. However, the European Commission has taken a step further and announced in April this year a regulation on eco-design aimed at reducing the negative environmental impact of products,” says Katarzyna Błachowicz, Vice President of the Management Board of the Circular Economy and Recycling Cluster – National Key Cluster.

The new version of the regulation, which is to come into force in July this year, stipulates that the environmental impact of a product throughout its life cycle will have to be considered already at the design stage. The regulations will introduce minimum standards for the durability of a given product, its reparability, energy efficiency, and recyclability. These requirements will be introduced as a priority for products that have a significant impact on the environment, such as iron, steel, furniture, tires, textiles, and chemicals.

“From the digital product passport, consumers will learn that such eco-design is applied. This is a novelty in the market that will cover a very wide range of products. We will have information about what the product is made of, how it can be managed, and how it should be recycled. A QR code will inform us about this. We will have direct knowledge of how this product affects the environment,” explains Katarzyna Błachowicz. “Interestingly, data shows that the previous eco-design regulation reduced energy consumption by up to 10%, which is quite a significant scale. Not to mention that consumers have saved several million euros thanks to this.”

Despite the fact that both financing and legislation have been directed towards implementing the circular economy for nearly 10 years, there are still many challenges in this area.

“We need to increase the rate of raw material recovery and the use of modern recycling technologies, such as chemical recycling. In Poland, we additionally need systemic changes and improvement of the waste management system because energy recovery or directing waste to landfills is nothing more than wasting valuable raw material that we could manage. Furthermore, we also need to improve selective collection because without it we cannot later process this raw material,” lists Anna Kozera-Szałkowska, Managing Director of the PlasticsEurope Polska Foundation. “In the end, we also have more general challenges related to the global and European economic situation. Europe is increasingly dependent on imported raw materials, and we must be aware that they do not always meet stringent European standards. Without supporting the competitiveness of the European and Polish economy, we will be in a very difficult situation.”

Closing the loop has been the direction the European plastics industry has been heading for years. The PlasticsEurope Polska Foundation report “Plastics in a Circular Economy – Situation Analysis in Europe” shows that the industry is becoming increasingly circular – circular plastics account for 13.5% of all plastics used to produce plastic products and parts in Europe. Thus, the European industry is halfway to achieving the intermediate goal set in the “The Plastics Transition” roadmap, which aims to use circular raw materials in new products at a level of 25% by 2030. The report also shows that in 2022, for the first time in Europe, more plastic waste was recycled (a total of 26.9%) than sent to landfills.

“Poland, in terms of circularity, does not differ much from the European average. The recycling rate is slightly lower: 21.2% of plastics were recycled, and the content of circular plastics in newly produced products was about 10%. In Poland, unfortunately, a lot of plastics still go to landfills, this is over 43%. Unfortunately, we also have the negative phenomenon of directing selectively collected waste to landfills – in Poland, this is about 26%, while the European average is 11%. As a reminder, from 2030, regulations will no longer allow directing selectively collected waste to landfills,” says Anna Kozera-Szałkowska.

The development of circularity in the industry both in Poland and in Europe is still accompanied by challenges. One of them is the growing amounts of plastic waste incinerated for energy recovery (an increase of 15% in the EU and 24% in Poland since 2018), while a significant portion of this waste could be recycled. Meanwhile, the recycling industry has been struggling with a lack of raw material for years, and without urgent measures to increase the availability of circular raw materials, it will not be possible to maintain the current pace of progress and achieve European goals related to closing the loop. Europe’s share in global plastic production is steadily declining – from 22% in 2006 to 14% in 2022. As a result, it is increasingly dependent on imports, which weakens its ability to invest in the circularity of the plastic system.

Issues related to ambitious circularity and zero-emission goals, including in the plastics industry, as well as the challenges associated with them, were the focus of the latest edition of the Polish Circular Forum 2024, which took place last week in Warsaw. This time, the focus was on practical, already functioning solutions, as well as what the industry needs to develop their potential in Poland. The forum is a meeting of business representatives throughout the value chain – from raw material producers to recyclers – as well as public administration, industry organizations, and non-governmental organizations. The event is organized by the Circular Economy and Recycling Cluster – National Key Cluster and the PlasticsEurope Polska Foundation, which brings together plastic producers.

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