SEE THE SHOW NOTES AND LISTEN AT: How Policy Can Help Create a More Circular Economy

Katie Whalen [00:00:00] Getting in the loop. Episode Seven. How can policy help create a more circular economy with Leonidas Milios.

[00:00:11] Hi, I'm Katie Whalen and join me each week as I talk with experts around the globe about Circular Economy. You'll find out what's being done to make it a reality and if it can really solve the problems it promises. It's time for Getting in the Loop.

[00:00:28] Welcome back to the podcast. Thank you so much for tuning in. I hope that it's as sunny in your town as it is right now when I'm recording this. Okay. So I have a special treat for you guys. Basically, what I did was I took all of the presentations that I've ever made about Circular economy and I put it into 20 pages of slides for you. So if you ever give presentations about circular economy or we'll be needing to give them in the future, or if you're just curious to learn a little bit more about the basics and the concepts behind Circular economy head over to slidedeck.gettinginthelooppodcast.com. And I hope this saves you some time whether you're making your own presentations or just looking for some key resources for information on circular economy.

[00:01:19] Now onto today's episode. Today on the show, we have Leonidas Milios , who is a researcher at the International Institute for Industrial Environmental Economics at Lund University in Sweden, where he focuses on the management and policy aspects of resources, especially within the circular economy paradigm. Prior to joining Lund University, Leon worked as a consultant, undertaking various tasks for the European Commission and the European Environment Agency. Leon and I are colleagues at Lund and we both work on a project called Mistroris, which is resource efficient and effective solutions based on circular economy thinking. In this episode, we focus on policies for repair and reuse, meaning how can you extend the lifetimes of products and make them last longer? Through smart incentives from policy makers. While the focus is mainly on the EU, I still think that a lot of the listeners who are outside the EU can learn a lot from this episode. So enough from me, now onto today's show.

[00:02:25] So thank you so much for coming on the show today, Leon.

Leon Milios [00:02:29] Thank you for the invitation. Really glad to be here actually, and really looking forward to talk about all the interesting questions that you have asked.

Katie Whalen [00:02:38] Yeah, I'm looking forward to diving into it. To start us off, can you explain a little bit about CE and policies?

Leon Milios [00:02:47] Okay, yeah. That's a good way to start because there's been a like a really big hype recently about the Circular economy and what is the circular economy and how different actors can approach and actually implement circular economic activities in their operations. So it's it's pretty interesting, I think, to see what actually is circular economy, what does it mean and all that. I mean, it's not really a very complicated concept, but there has been some confusion recently and I could give like a brief account of what do I take from the current debate on the issue? Well, we have to start thinking about the classical economic activity, how the economy works, right. I mean, we have first the extraction of raw materials that are processed in order to make manufactured goods, and then the products that are manufactured are distributed across the market through retailers and put on the market for the consumers to buy. And at the end of of use, those products ultimately ended up as waste. Well, what the circular economy actually means is that. At the end of life of a product, it's not about being a waste, but rather being something that can be used again. And it's embedded material and energy can be reintroduced back to the economy and be used again, again. Of course, there's like many different types, many different ways, a product or some material embedded. The product can become feedstock for another new product and return to the economy from, for example, just reusing the product again as it is or by other activities. In the case, the product has its damage. For example, when we can. It can be repaired. It can be refurbished and can be manufactured, which is kind of like a more industrial way of bringing a product back to its functional use and ultimately a product that cannot be repaired or manufactured. It can be recycled off, of course, and its material can be recovered. And some important aspects of the circular economy, like what is the aim of it, is like to minimize waste, to reduce waste as much as possible towards zero waste. Although in actual zero waste situation is not like physically possible because of no constraints in the materials that ultimately disintegrate and cannot be used anymore. And ideally, the whole process, the whole all the operation, the economy would be powered by some sort of some kind of renewable energy and not like fossil energy. So these I kind of like the basics of what the circular economy is. I hope it was clear a little bit. But I can make it I can make it much more easier because in policy circles, people need to have a clear definition and they want to know what they're talking about. So things become much more easier. If you look at, for example, at the European Circular economy Action Plan, which Santos has recently been published by the European Commission. And then we can you can find like a very simple definition what kind of resonates with like the debates in policy circles. So whether we find there, we find that a circular economy refers to the end economy, where the products where the value of products, materials and resources is maintained in the economy for as long as possible. And the generation of waste is minimized. So practically this is kind of like a very simplified but very true to the point definition that actually policy actors and any. And I can really understand and act upon it.

Katie Whalen [00:07:23] Exactly. So it's about maintaining maintaining the value over time. And one way to do that then is, of course, what you said, repair and remanufacturing. And I hear a lot in this, you know, the discussion about how to enable more repair and reform, more remanufacturing. So again, maintaining the value over time, one of the things that's often brought up in these discussions is, is policies. And sometimes I think of policies like magical unicorns. They're often brought up in the discussion. But I don't think we always know or even understand what they they mean. So could you just give us a brief understanding of what a policy even is?

Leon Milios [00:08:10] Yeah, that's a good, that's a good point, because it's always that we listen about, you know, we need policy for this, policy for that and for the Circular economy policies can change everything. But starting from a basic idea where the policies and we can say in a general level that the policies, policies are like a set of principles or like a course of action that is adopted by an organizational entity. And that could be either like a government or even like business, a civil society. So it seems a broader idea of what a policy is. But if we look around us actually policies practically everywhere. They're like numerous rules that control our everyday lives from what we eat, what we buy in the market, where how we leave, how do we move in the city and the environment around us. And the list goes on and on. So why this or this is why policy is so important and in our case. Particularly one type of policy. The public policy and what public policy is it can generally be defined as a system of laws and regulations and like a general course of actions towards a social outcome which is enacted by public authorities, either other governmental or state level, state level, let's say, or at the local more administrative level, it could be some municipal rules, for example. And of course, to achieve this, public authorities need to have like more strategically vision and to allocate appropriate funding for the implementation of this type of rules and policies and principles. Let's see.

Katie Whalen [00:09:54] So thinking back to where we started, where when we talk, where we're talking about repair and reuse, how is repair and reuse currently supported by policies in the EU?

Leon Milios [00:10:07] Yeah. I mean, we can we can say that there is like a very wide policy framework at the European level that covers and the whole life cycle offer of a product from the time that it's materials, constituent materials are extracted until the end of life at the waste management phase. However, what do we have observed is that there is like a really high concentration of regulatory instruments at the end of life of products well at the production stage or they use phase of a product. There's quite a lot fewer policy instruments there to to intervene. So until now at least, there was the policy framework was a little unbalanced in Europe, kind of waiting for a product to first two to reach its end of life and then tried to regulate its it's the best way to recover its material and energy. However, this kind of we are in a we're in a transition period now that a lot of things are happening. And maybe we can discuss a little bit later about that.

[00:11:31] But what we can see, especially when it comes to the reuse of products, the durability of products, let's say, and how they can be repaired. There is like one very, very promising policy instrument that has been that has not been used at its full potential until now. But this has started changing. And I'm talking about the echo design directive, which has which has the potential to set specific rules and specific technical requirements on products that are introduced in the European market on how they can be more repairable or to regulate their intended use life.

[00:12:24] And until now, there has been a few only rules, only on a few product groups implemented so far. And I could say, for example, we have some rules on the vacuum cleaners and some rules on lighting.

[00:12:42] And if I take the example of the vacuum cleaner, for example, let's see what do we see in the regulation in there included in the implementing regulation on eco designer vacuum cleaners? There are like two. I see two elements addressed. One is about the operational lifetime of the vacuum cleaner. That should be. Greater or equal to 500 hours of operation.

[00:13:12] And then we all know that the most of the vacuum cleaner, how this like hose that goes, you know, helps you go everywhere and take all the dust. So the hose, if any, of course, it shall be durable and be able to be usable without any stray. Got any damage. After 40000 inoculations under strain. So it's pretty specific rules we have here. And this kind of we can see here where how far the vehicle design regulation can go. But until now, it has been an almost entirely used to set energy efficiency standards. So that's why we see that there is a huge potential to use this piece of legislation for also material efficiency requirements and extending the life of products.

Katie Whalen [00:14:12] Oh, wow. So if I'm hearing you correctly, until recently, a lot of attention has been focused on like the end of life. So waste management, so making sure, you know, bottles or electronic products are collected for recycling at or proper disposal at end of life. And now we have some focus on the upper part of sort of like the life cycle so up like the design of products. But most of most of that has been then in terms of energy efficiency. And only now have they begun to set requirements in terms of the lifetime and durability and material efficiency.

Leon Milios [00:14:59] Exactly. And also here I can mention what I what I said before about this European Union Circular economy action plan, which is actually the strategic document that directs the the way the new policies should be introduced around the Circular economy Matthew, resource efficiency. And they do actually make a special mention on the potential of their core design directive and how it can be used to develop requirements, for example, their repair abilities, your upgrade ability of products, extending the product life and and so on. And. Also, we can see also some specific mention for for some more consumption based instruments in the sense on the public on the public side of consumption. It is mentioned that the instrument of green public procurement can emphasize more on the circular economy aspect and have like a revised criteria when some purchasing decisions are need to be taken. And also. And on the private side of things, the action plan promotes and actually proud prioritizes the use of eco labels and information about increases your ability of products. And so we see that in the action plan there is is clear a clear path where we need to go on this and this type of instruments. However, steel. I think we are on the way things are starting happening now as we speak, action.

Katie Whalen [00:16:52] And just to clarify. So who is who is responsible for following the the policies that are dictated in the eco design directive?

Leon Milios [00:17:01] Yes, I mean, this for- Its further category there's specific implementing regulation that actually covers- not covers, it's mandatory for all products that are entering the European market.

[00:17:25] So a manufacturer, either it's from a European country or from somewhere else elsewhere, like either Asia, America, Africa doesn't it doesn't distinguish. But every manufacturer that actually intends to introduce their products in the European market, they need to follow these rules. Otherwise, they will not get the same permission, let's say, to be in the market here.

Katie Whalen [00:17:58] Okay. Yeah. We have listeners from all over the all over the world. So I think it's it's it's not just well, it's not just pertinent to people who are listening in the EU, but to those who are, you know, working with companies that are placing products on the market in the EU and dealing. Dealing with. Exactly.

[00:18:19] I had a question about reuse and repair in terms of I know we've talked in terms of the EU. So is there any individual company right country paving the way? Because I know the EU is sort of the overarching governing body and then there is other individual countries that do make their own rules and legislation as well.

Leon Milios [00:18:44]  Yeah. And this is a this is a very true, I have to say, because there is a lot of things happening at the EU level, however, because it's like, let's say a supranational entity. There is there needs to be a lot of discussion and agreements and consensus throughout like the processes. However, there are a few European countries that are actually in the form forefront of policy, specifically for your durability and repair ability. And one of them is actually France, which has led a really forward looking policy framework. And I could mention here in law they have this at will act on consumption and prevention of planned product obsolescence. Back in 2014, actually, even before the European Action Plan for Circular economy comes to existence where this law has many provisions there. And one very important one is about actually making it illegal for products to end their life prematurely. And then you would ask, okay, so how are they going to monitor that? However, the encouraging news are that French authorities have been kind of studying the different type of products and the different how, say, say reports of suspected planned obsolescence. And they have reached out to the companies and they are trying to find out and to compare their products and with their intended life and their actual life. So there are many things happening. Some anecdotal information is that they have been in deep discussion with Apple about their products. But I don't know how this is going. Any French listener, maybe they can give us some insight.

[00:21:07] And yeah, I'm among other things, is about the obligation of really retailers to inform the customers about the time horizon that spare parts will be will be available for a product so that when they get them, customers buy a product.

[00:21:24] They know already from the start that, okay. This part that we have a spare parts available for X number of years and then they can make their informed decision, let's say. Also, there is also provisions about extending the guarantee of products up to two years and more. And speaking about forward looking countries, another one is Sweden, which is a kind of a little celebrated within Europe and globally for being in a very forward. And the pioneer in environmental policy.

[00:22:07] And while we saw in the case of France that there was more and more direct approach, a little more top down administrative regulation in. In Sweden there. Well, here we are more in favor of economic incentives and economic instruments and how to change the behavior of individuals and economic actors by introducing economic incentives. So in Sweden, there, there's been a tax reduction of VAT tax reduction on repairs and specifically from their higher level of VMT, which is currently at 25 percent in Sweden to the mid level at 12 percent only for repairs on bicycle shoes, leather goods, clothes, household Lehman's. And currently there is also consideration about expanding this. This reduction in other product groups as well. However, there needs to be some preparation and some impact assessments on that before we continue forward. And also talking about incentives, there's also this opportunity of when people do some renovations at their home, on their home and they have to change something or repair a household appliance fridge, for example. Then they have the opportunity to declare this together with their tax declaration at the end of the year and get some tax deduction there, which is also very good economic incentive as well.

Katie Whalen [00:23:51] Oh, really? So I can declare that.

Leon Milios [00:23:53] Yeah. If you had some recent renovations at home, don't forget to declare it.

Katie Whalen [00:23:57] Yeah. There is so much that we can. I think there is so much that just we as consumers don't even know as well. So that's maybe something in the future that needs to be mean. It needs to be just discussed and communicated. And I know that some of our colleagues like Jessica has been looking at what does this actually mean for the consumer? You know what? What is the right to repair? What kind of benefits and possibilities do we have? So I hope that that will be become more transparent in the coming coming years.

Leon Milios [00:24:38] Yes. And also, as we see, there's like so many different ways to to approach the issue of repair. With a policy, different policy instruments and there's also a possibility of, you know, learning between the different countries and how this the different instruments can be adapted and adopted in different countries. And finally, maybe at the European level as well.

Katie Whalen [00:25:09] And that brings me to what I was going to ask you next, Leon, which was about the different types of policy revisions that you see being discussed at the EU level to encourage repair and reuse.

Leon Milios [00:25:24] Yeah. I think I've mentioned this many times already that there's like a lot of things happening now, and it's true that there has been some proposals for revising rules, saying the eco design directive and practically making bringing, let's say, the right to repair closer to to the people, closer to reality.

[00:25:52] So we can see that there is some a few proposals from for a specific product categories, for example, TV screens, fridges, servers, washing machines and this washers on requirements for repair. And that's very important. And what do we mean about the requirements for repair? So there. Their proposals include provisions for nondestructive disassembly, which means that the manufacturers must ensure that some places can be easily disassembled and key components can be replaced with the readily available tools, not something specific or sophisticated.

[00:26:38] Also, the regulation makes mention about the availability of spare parts that the manufacturers actually are required to provide spare parts when key components fail. However, most of the spare parts will be available only to the professional repair. So maybe you and I as a as a, you know, average user, we cannot go and get the spare parts from the manufacturer. However, we can always turn to a professional repair. Also, something very important is about the access to repair information and manual. So manufacturers actually will be required to make repair manuals available. Then again, to the professional repairs, which kind of makes it a little it puts an extra step in the way of repairing because people will not be able to do it at home. But maybe people would not do it at home anyway. So why not go to a professional repair? And finally, something about the delivery time of spare parts that the manufacturers are required to deliver spare parts within 15 working days for all concerned. So if we put all these things together, we see that there is like really actually enabling framework for a pair that makes it much, much more. Likely and easier to repair products than it is now, for example. However, still, people cannot do it themselves.

[00:28:14] But sometimes maybe it's better to go to the professionals, because when their product is too complicated for some and some electronic product, like a laptop or a mobile phone, I guess professional help is is required. Anyway.

Katie Whalen [00:28:33] Yeah, I've been wanting to bring iFixit. Kyle, I think that Kyle, he's the founder of iFixit. So he's really into the right to repair and being able to repair products yourself. And I've been wanting to bring him and talk to him on the podcast for a while. But I also do see that the the side that you mentioned here that sometimes products are too technically complicated or people don't have the knowledge and the expertise to do it. So I think there is some sort of happy medium that you can find.

Leon Milios [00:29:04] And I also find very interesting that for specific product groups, for example, a computer servers, there are like some additional requirements that they're very, very relevant. For example, requiring from manufacturers to provide firmware updates for a number of years because it has been observed that this type of software updates have been a problem actually for extending for life. So now with their proposal of the regulation to provide for more updates, I think it's for eight years at least makes it much, much, much likely that a server can extend its life and also data deletion tools, because this is also important concerning the privacy of the information included in the server.

Katie Whalen [00:29:58] Yeah, I can, I can imagine.

[00:30:00] That's important because these these specific terms have been many times mentioned as critical barriers for product life extension of the server and computer equipment in general.

Katie Whalen [00:30:15] Yeah. Maybe to follow up on that, could you just give us some examples from from your research and also from what you're seeing more generally in terms of how we can help promote an increased amount of reuse and also sort of accelerate this transition to a circular economy?

Leon Milios [00:30:32] Yeah. Yeah. I mean, this is very good question and I have a very recent example to tell you and it's also very much connected to what we talked already about the I.T. equipment.

[00:30:46] We had some contact with the Swedes, with a few Swedish municipalities and tried to to discover how and what are their requirements when they want to purchase I.T. equipment and how they can adapt their requirements so they can prioritize reused equipment, second life equipment.

[00:31:12] So we found out that it was very important that when a new procurement process starts, it's important to make a proper market investigation and initiate a dialog with suppliers to see actually what is available there, because there has been instances where like although there is quite the sufficient supply of reused equipment in the market. Public authorities, they don't even know their existence. So that was like a first the first place to start see what options are available. So this will allow then the design of a proper procurement criteria that may include criteria related to these products, for example, a guarantees service and other issues that can prolong the lifespan. Another very interesting issue that came up is also for the public or for just to consider actually the use of the of the product itself. Why do what type of use do I need to do for this product? And now we can imagine, for example, that a new high tech equipment is not really necessary to run in a public library, to search articles or, for example, in an elementary secondary school to run some simple education programs. So in those cases, it would make absolutely much better sense to actually procure a second hand equipment because the requirements are not the user requirements are lower and the cost is considerably lower compared to new equipment. So we see the multiple benefits there coming in the picture and making it making it kind of like the obvious choice. However, this has not even occurred to many municipalities anywhere that so so many different options can have a lead to the big highest benefits, economic and sustainability benefits in general. Well, and as a final thing, it's about not only purchasing new like secondhand equipment, but how about their own computers, their old computers that they haven't used, the municipalities? What do they do with them? I mean, there was many different options. If there were like a think in good enough condition that could be sold somewhere like second hand or they could be redirected straight for recycling. So what municipalities can do is actually to try to contact specific, you know, re manufacturers and refurbish search of I.T. so they can take their equipment there and not some other middleman or broker that their final destination of the equipment is not certain.

Katie Whalen [00:34:16] Yeah. So really thinking what is out there? And what do I actually need? And can the two sort of be compatible? Yeah, that's what I'm hearing you say. And then also thinking, what what am I going to do with the previous the previous equipment? Yes. And maybe maybe this is now getting a little bit too technical here. But we've talked about that there can be economic benefits to this. What is the environmental benefits to to this? Maybe in the case of, you know, using laptops and extending the lifetime of laptops?

Leon Milios [00:34:56] Yeah. I mean, it really has quite many environmental benefits in the sense of saving a lot of energy and resources of manufacturing new laptops, and especially when we talk about this electronic equipment, complicated equipment. There is also a lot of that included inside, a lot of precious and critical metals and minerals which are not readily available. And they're also a big challenge to recycle as well, because usually it's it's difficult to extract some rare minerals from the laptop. So.

[00:35:42] It really can have like a big environmental benefit when we reduce a computer. There has been some studies about that tech taking life cycle assessment perspective. I think maybe you can share a link later with our listeners.

Katie Whalen [00:36:06] Yes, definitely. I'll put some in the show notes on our website.

Leon Milios [00:36:12] Okay. So we talked so far about the current policy landscape and what is being discussed, and it's closing closer and closer to implementation of the European and national level.

[00:36:24] And if I could combine that with my actual case that the research here at the university, I could start making a more holistic approach to what actually policy instruments are required for increasing product life and inter-operability within a circular economy context. So what would a policy mix then look like for repair and reuse? I have put together five points that I consider to be quite critical, especially for reusing and repair products. First of all, it's very important to have a specific eco design rules and actually that mandate manufacturers to make their products more durable, easier to reset to disassembly and repair.

[00:37:25] Secondly, a mandate for manufacturers actually to provide spare parts and repair information for an extended period of time and not for just a couple of years after their product is launched and then go find spare parts. So this is also very important. Thirdly, I would definitely propose the Swedish approach here to use as some type of economic instrument. For example, they reduced a tax rate for repair services. And why not for repair- No, a second hand parts as well.

[00:38:03] Fourthly, it's very important actually to involve product users and consumers in general by providing them information about potential environmental impacts and savings of of using secondhand products and repairing their products. So that's also very important. And finally, what I would like to stress is some, let's say, local bottom up support for repair activities, for example, do it yourself and repair efforts that not only engage the people in the local community, but it can also improve and reduce them. The environmental impacts of individual consumption. So, yeah, I mean, if I- Okay, maybe I need to recap very, very fast to the five points.

[00:39:11] Eco design rules for durability, availability of spare parts and repair equip information, reduced tax for repair services and secondhand products, information to consumers about environmental impacts and environmental benefits of reusing. And finally, support local activities like repair repairs and do it yourself. Repair activities.

Katie Whalen [00:39:42] Brilliant. That's a very clear way to to wrap it up. Thanks so much, Leon.

Leon Milios [00:39:48] Thank you very much. Are we done?

Katie Whalen [00:39:50] Well, I have one more question for you. And that's the question I asked all of the interview guests. It's about the In the Loop game and I think you actually came up with this idea to ask this question for all of the interview guests. We're just brainstorming over lunch one day. So I have to thank you for this.

Leon Milios [00:40:10] And I was very amazed because when we played the game, there was all these different events, and extremely clever ones, some of them I haven't thought about, but, yeah.

Katie Whalen [00:40:23] Yeah. Thanks, Leon. So, yeah. So, you know, it's coming because you helped create this question. But essentially, if you could create an event for the game, what would you focus your event on?

Leon Milios [00:40:39] Yes. And I think my proposal here would be straight to the point of our discussion today. I would propose an EU wide full repair mandate and stressing EU wide, because as we mentioned before, it doesn't matter referring manufacture in the EU or outside of the EU. The rules are the same. If you want to compete in the market so a full repair mandate for the game would include an extended extended product warranty for it from some years, a guaranteed provision of spare parts. And, of course, the full disclosure of preparing guidance, repair information. So. That would be an interesting event to see and how the players in the game would react and what would they decide to do and how this will change the events in the game that it would be interesting to see.

Katie Whalen [00:41:38] Yeah, well, I love your events, Leon. It reflects reality and those are my favorite kinds of events in the game. Thank you so much for coming on the show and giving us sort of this crash course and what policies are and how can we help extend product lifetimes in the circular economy using policies. I'm gonna link the things that we discussed, you know, so these different papers and reports in the show notes on our website at gettinginthelooppodcast.com so listeners can go  check that out and learn more about what we discussed in the episode today. But, yeah, it was a pleasure talking to you.

Leon Milios [00:42:17] Yeah. Thank you very much again for the invitation. It was very nice talking to you and I hope our listeners will also enjoy this episode and be a little more inspired and demand their right to repair.

Katie Whalen [00:42:33] Thank you for listening. I hope you enjoyed this episode or show notes and links. Go to our website at gettinginthelooppodcast.com, and while you're there, subscribe to our mailing list to have new episodes delivered to your inbox every Monday. See you next week.