Circular Economy

Basic concepts

What the circular economy is

The circular economy is a development model where the value of the products, materials and resources is kept in the economy for the longest possible time.

Instead of being scrapped after being used, the materials are reincorporated in the production cycle as secondary raw materials.

Ecodesign, reuse and recycling play a key role in this new economic model, that seeks to minimise waste generation.

Driving a circular economy fosters, among other aspects, the creation of new jobs in the following areas:

Production of energy from renewable sources
Energy efficiency
Waste and waste management
Air quality
Restoring goods and services
Increasing recycling
Reuse and use of new materials that they are easily recyclable or reusable

The Circular Economy in the Basque Country

The Basque Country currently generates 5.5 million tons of waste a year. The vast majority of that waste is industrial and has a recycling and recovery rate of 48%. The economic value of materials sent to landfill exceeds EUR 44 million a year.

In order to harness those resources, the Basque Government’s Ministry of the Environment, Territorial Planning and Housing, though Ihobe, annually convenes a series of grant programmes to implement circular economy demonstration projects that drive:

New value recycling solutions for secondary materials ("upcycling")
Manufacturing products using secondary materials
Repairing and remanufacturing parts or components, products or equipment

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Life Giswaste project

The agri-food sector of the Basque Country generates 4 million tons of organic by-products and waste every year. Its management as final waste is a difficult and costly task. However, its recovery and reuse is viable given its high content in nutrients.

The European GISWASTE, implemented as part of the LIFE programme and led by the AZTI Tecnalia research centre, in conjunction with LKS, Geograma, and with the support of Ihobe, has developed a methodology and its relevant IT tool combining multicriteria decision-making procedures and geographic information systems (GIS), that facilitate decision making in the management of agri-food by-products.

GISWASTE proposes alternatives to recover and reuse dairy, meat and/or plant by-products, by means of the production of biogas or animal feed. By combining geographical information and multi-criteria decision methodologies, GISWASTE provides viability reports regarding recovery and reuse by means of two options:

Construction of a biogas production plant
Construction of an animal feed production plant

Basque Country's "Circular Thinking" Initiative

As part of the Circular Economy Strategy of the Basque Country, the Basque Government’s Ministry for the Environment has set up the “Circular Thinking” initiative to foster the circular economy among the socio-economic stakeholders of the Basque Country, and particularly with industry (SMEs and large corporations).

Apart from fostering and streamlining the implementation of circular economy processes by companies, this initiative seeks to facilitate the identification of the actions and case studies carried out by companies to act as examples for other organisations, by means of using the “Circular Thinking. The Basque Country towards the Circular Economy” brand.

News

All news

22/07/2022

Circular Economy, Ecodesign

Vitoria-Gasteiz to host exhibition on circular products manufactured in the Basque Country from 24 September to 2 October

From 24 September to 2 October, the Europa Congress Palace in Vitoria-Gasteiz will host the “Zirkularrak-Circulares” exhibition on circular products manufactured in the Basque Country. The exhibition brings together a wide range of products that have been made using eco-design methodologies with a life-cycle approach and that have therefore substantially reduced their environmental impact and become an example for the entire European industrial sector. The exhibition is free of charge and there will...

Circular Economy, Ecodesign

The Basque Circular Summit 2022 will focus on the circular economy model and its impact on industrial competitiveness

03/06/2022

Circular Economy, Local Sustainability

Widespread uptake of the EU Ecolabel and EMAS (EU Eco-Management and Audit Scheme) among Basque organisations

23/05/2022

Circular Economy

Ihobe and the Basque Ecodesign Centre present a guide to implementing sustainable finance regulations

11/05/2022

Circular Economy, Ecodesign

Ihobe driving circular businesses in the Basque Country in partnership with SITRA, the global leader in the circular economy

31/03/2022

Circular Economy in the Basque Country

The circular economy proposes an evolution of the current economic model, based on extraction, production, use and waste generation, by offering countries, companies and consumers an alternative to grow and compete by reducing dependence on the use of raw materials and increasing wellbeing. In other words, to do “more with less”.

Basque industry annually generates 3.5 million tons of waste, 43% of which is untapped and ends up in landfill. Iron & steel, metal casting and paper are the sectors where the greatest amount is generated.
Recovery of products and components has generated in the projects conducted in the Basque Country so far greater value added than the recovery of materials, which confirms the hierarchy of the priority lines of work from an opportunity perspective (ecodesign, remanufacturing and upcycling of metals and plastics).

However, the costs of raw materials in Basque industry account for 61%, compared to 2% for energy costs, a similar percentage to that of Germany. Furthermore, Basque industry's dependence on imported raw materials is 77% and it is, therefore, necessary to strengthen the current private-public partnership focused on product ecodesign to better harness the potential solutions to close the cycles of key materials. If circular innovative solutions are undertaken, an achievable average potential saving of 6% of that consumption of raw materials is estimated, which would mean savings of €2 billion in Basque industry..

Over 150 industrial companies of the Basque Country are already applying circular practices or models (ecodesign, servitization, remanufacturing, life cycle assessment, environmental declarations, etc.). The main industries that are adopting new "circular strategies”, are in the automotive, transport equipment, electronic and electrical equipment, machine-tool, metal, chemical, furniture and building sectors and environmental services subsector, even though the need to drive the culture of working with other value chain has been detected in companies.

The circular economy experiences implemented by Basque companies have led to tangible and immediate results. Therefore, 60% of the companies already working on those approaches point out that it is essential to introduce those criteria in their business or product in order to, among others, make their processes more productive, cut energy consumption, save materials, grow sales, stand out on international markets, open up new markets, improve their image and increase their internal capabilities.

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Measuring the circular economy

The Basque Country, in accordance with the guidelines set by Europe, has defined a monitoring board to be able to evaluate its progress towards a more circular economy – thanks to the measurement of a limited set of significant key indicators that help us to study the main elements of the circular economy. This panel will allow us to evaluate the effectiveness of actions at the European and national levels, to identify best practices and differences in performance in specific areas, and to detect the need to take new measures.

The study framework covers areas such as food waste, safety of raw material supply, repair and reuse, waste generation, waste management, trade of secondary raw materials, and the use of recycled materials in products.

The indicators are based on existing data from Eurostat and other official data sources; all indicators included in the monitoring framework comply with the RACER criteria (Relevance, Acceptability, Credibility, Easiness, Robustness). This monitoring panel is characterized by its comparability with Member States of the European Union, periodic updating, and the existence of time series.

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Clean technologies

Basque Clean Technology List

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The Basque Clean Technology List of the Autonomous Community of the Basque Country is a list of industrial equipment aligned with the energy, environment and competitiveness of the Basque Country. The acquisition of these technologies entails the application of a tax deduction of 30% of the investment cost of the equipment.

That equipment has been selected by a technical committee to be included on the aforementioned list given its better environmental performance and its low implementation in the industrial fabric of the Basque Country.

The technologies to be included in the Basque Clean Technology List are selected by means of active prospecting by the department of the Basque Government in charge of the environment, with input from the department in charge of industry.

Once the technologies have been selected using an ad hoc methodology, they are assessed by the Technical Committee, made up of representatives of the following entities:

The Environmental Office.
Ihobe, Environmental Management Agency
Business Development Agency of the Basque Government, SPRI
Basque Energy Board - EVE
Tax Coordination Authority

After the assessment, the Committee produces a draft List to come into force in the following year. This proposal is published in the Official Gazette of the Basque Country by means of an Order of the Basque Government’s Minister of the Environment and Territorial Policy.

The Basque Clean Technology List 2016 includes 92 technologies incorporated in equipment and aimed at the environmentally priority industrial sectors in the Autonomous Community of the Basque Country.

Environmental benefits

The equipment on the Clean Technology List of the Basque Country:

Contributes to improving the environmental and energy results
Increases the efficiency of the industrial processes in the Basque Country, particularly of the SMEs.
Enables smart use and management of raw material.
Drives reuse, recycling and recovery.
Has a positive global environmental impact.
Has a degree of implementation underway, but not fully consolidated on the proposed sector, with positive value being attached to the number of potential facilities to which the technology may be transferred is high.
Records better environmental values than those established by current environmental legislation.
First and foremost involves preventive technologies compared to end of process ones.
Has a positive global environmental impact for the different environmental aspects (air, water, waste, land, energy and noise) and significantly better than other available technologies.

Notificación de adquisición de equipos incluidos en el Listado Vasco de Tecnologías Limpias

Tax benefits

Tecnologias limpias. Beneficios fiscales

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Companies whose registered office is in the Basque Country may deduct from the Corporation Tax payable 30% of the amount of the investment in any of the full sets of equipment defined in the Order of the relevant Ministry of the Basque Government approving the Basque Clean Technology List.

This tax benefit is established in Article 65 of the Corporation Tax Provincial Legislation of the three provinces of the Basque Country and is part of the so-called "deductions with application limits" The following legislation is current in force:

The tax incentives for the Basque Clean Technology List is in keeping with what is established in Commission Regulation (EU)No 1407/2013 of 18 December 2013, on the Application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid.

The temporary and quantitative maximum limits to be deducted by a company, permitted by current legislation, are as follows:

Commission Regulation (EU) No 1407/2013 on de minimis aid: The total amount of de minimis aid granted by a Member State to a single company shall not exceed €200,000 during any period of three tax years.
Provincial legislation: The deduction for investment in the Basque Clean Technology List is part of the so-called “deductions with application limits”.

These deductions can only be applied as up to 45% of the tax payable in a tax assessment.
Any amounts not deducted due to a shortfall in the tax liability may be applied in the assessments for tax periods that conclude within the immediately following fifteen years.
The calculation of the periods to apply the deductions may be differed until the first financial year where, within the limitation period, profits are posted.

Other deductions in the Basque Country

Pursuant to Articles 61, 62, 63 and 65 of the Corporation Tax Provincial Legislation, the following remain in the Basque Country:

The deduction for investments in new non-current assets (10%)
The deduction for research and development activities (30%-50%)
The deduction for technological innovation activities (15%)

The deduction for investments and costs linked to projects pursuing sustainable development, conserving and improving the environment and the most efficient harnessing of energy sources (15%), specifically to minimise, reuse and recover waste, mobility and sustainable transport, environmental regeneration of natural spaces as the result of compensatory measures or of any other type of voluntary actions, minimising water consumption and its purification, and the use of renewable energies and energy efficiency

List equipment

The List includes a total of 92 technologies selected for their better environmental performance in the areas of water, emissions, waste, energy, noise, consumption and resources. These are technologies aimed at the environmentally priority industrial sectors of the Autonomous Community of the Basque Country.

The technologies have been selected for their high innovation component in the sector of Basque industry and for their low implementation in the industrial fabric.

ENVIRONMENTAL CERTIFICATES

Ekoskan

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Ekoscan® is a private standard promoted by Ihobe and is one of the main tools to systemise the environmental improvement.
This official certificate is issued by Ihobe, according to the recommendations issued by the certification authority that conducted the audit. These audits are annual and the validity of the certificates is subject to there being environmental improvement results.

The objective of the Ekoscan standard is for the company to incorporate the environmental variable in the management processes thanks to the Ekoscan environmental diagnosis, which clearly reflects the status of the company. The Environmental Improvement Plan defined by Ekoscan for continuous improvement leads to results that are measured and quantified and can result in the company obtaining the official Ekoscan certificate.

This certificate is aimed at any company and organisation and, in particular, to the small and medium-sized enterprises of the Autonomous Community of the Basque Country that wish to manage their environmental aspects easily and have a clear results-oriented approach.

Advantages of the certification

It certifies an Environmental Improvement Management System, according to the Ekoscan Standard, audited by the leading certification authorities (AENOR, BVQI, Lloyds, TÜV, SGS, DNV, IAC...).
It recognises that the company has obtained results regarding environmental improvement and complies with current environmental legislation.
It motivates the employees as they are required to participate in the process.
It is a highly optimised service, successfully applied in over 800 companies of the Basque Country.
It implements environmental improvement measures that lead to economic savings for the companies.
The environmental and economic results are appreciable in the short term.
The Ekoscan+ certificate is awarded after three years of certification and which ensure compliance of environmental legislation at a similar level to the EMAS Regulation.
Its cost is lower than other type of certifications.

Ekoscan Certification Authorities

EMAS Certification

emas The EU Eco-Management and Audit Scheme (EMAS) is a strategic commitment of the European Commission that is in line with the Europe 2020 Strategy aimed at achieving integrating, sustainable and smart growth.

According to 2016 data, there are at total of 2887 organisations in Europe, with over 10,000 EMAS-certified registered plants.

The benefits given by the European companies that have this environmental certification system in place include:

Cutting negative incidents
Improving relations with stakeholders
Increasing market opportunities
Improving productivity thanks to greater operational control
Financial savings
Improved staff contracting and retention

In short, being registered in the EMAS System:

Minimises the likelihood of breaching environmental legislation and the risk of being fined
Lowers insurance premium and the deposits required by environmental legislation.
Fosters a better image and increases confidence in companies and entities in relation to their customers, partners, shareholders and consumers.
Increases awareness-raising and staff motivation
Provides new business opportunities perspectives

List of companies of the Basque Country in the EMAS Register

Registration in the EMAS Register of the Basque Country

Companies with Environmental certificates

Use this search engine to look for companies with environmental certificates, such as the European Ecolabel, EMAS certification, Ecodesign-environmental management of the design and development process, environmental management system, Ekoscan standard, and Environmental Product Declaration.

Companies with Environmental certificates

FAQs

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HOW CAN I MEASURE THE LEVEL OF CIRCULARITY OF MY ORGANISATION?

There is no single way of measuring the level of circularity of organisations. Today, the ISO is working on developing a new standard for this purpose. However, there are different indicator-based circular economy measurement frameworks for organisations. Among them, Ihobe recommends using the package of Circular Transition Indicators of the World Business Council for Sustainable Development.
Ihobe has worked on pilot testing this package of indicators within the scope of the Basque Ecodesign Center. This package of indicators focuses on analysing and organisation's inputs and outputs in terms of materials and energy, characterising them depending on whether they are considered to be circular (on the one hand, renewable materials and energy, and on the other, secondary materials) or not. The diagnostic work carried out by the Basque Ecodesign Center is available via the following link.
Ihobe is currently working on a tool to measure the level of circularity of organisations. This tool will be free of charge and freely accessible for Basque companies, and will be available in 2021 within the framework of the Basque Circular Hub.

WHAT IS THE EUROPEAN COMMISSION DOING WITH REGARD TO THE CIRCULAR ECONOMY?

In 2015 the European Commission established the "Action Plan: Closing the Loop" with the aim of transforming the European Union into a more circular economy. This plan promoted employment, growth and investment; an economy free from carbon emissions, efficient in the use of resources and competitive.
Under the umbrella of the Action Plan, in 2018 the Commission approved a series of legislative proposals called the "Circular Economy Package" which included 5 directives related to products' end of life, covering aspects ranging from packaging to vehicles no longer in use.
In March 2020, the European commission adopted the New Circular Economy Action Plan within the framework of the "European Green Deal". This new plan aims to "accelerate the transformative change required by the European Green Deal, while taking advantage of the measures in favour of the circular economy applied since 2015", as well as "ensuring that the regulatory framework is rationalised and adapted to a sustainable future, maximising the new opportunities derived from the transition while also minimising the burdens for citizens and businesses".
To achieve this, it presents a series of 35 key actions for their development between 2020 and 2022.

WHAT IS THE CIRCULAR ECONOMY?

The circular economy is an economic model where the value of products and materials is maintained for as long as possible, waste is reduced to a minimum and resources are repeatedly reintroduced to the production cycle, creating value when goods reach the end of their useful lifetime.
The circular economy seeks to close the loop of materials and energy. It is not only about closing the main circle, connecting the end point (waste) with the starting point (extraction of raw materials) through recycling processes. It is about closing as many circles as possible throughout the life cycle of a product; about moving from a focus on waste management to focusing on materials management. Achieving more with less is the basic principle of the circular economy.