17 May 2022

The transition to a circular economy is essential in order to deal with climate and environmental risks. For Belgium, it is also a tool for freeing itself from being dependent on third parties, making it more resistant to international price fluctuations and foreign supply. To overcome these challenges, the Green Transition, one of the focus points funded by NEXT Generation EU, has the ambition to transform the EU-member states into modern, resource-efficient and competitive economies. The aim is to boost the economy through green technology, create sustainable industry and transport, and cut pollution.  

NEXT Generation EU: the ambitions of the Green Transition 

Next Generation EU (NGEU) is a temporary recovery instrument to help repair the immediate economic and social damage brought about by the coronavirus pandemic. The Recovery and Resilience Facility (RRF) is the centerpiece of NGEU with loans and grants available to support reforms and investments undertaken by EU countries.  

To access NGEU funds, each Member State is required to develop a National Recovery and Resilience Plan (NRRP), setting out a coherent package of reforms and investment for the period 2021-26. 

The Belgian National RRP will be supported by 5.9 billion euro in grants. 50% of the plan will support climate objectives.   

The circular economy of the future 

A transition towards a circular economy that is sustainable requires optimal management of raw materials (steel, oil, plastic, natural gas, coal, …). Their use is a major challenge for the environment and the climate, an ambition being enforced by the Green Transition. 

Considering environment is a regional competence in Belgium, both the Flemish region, the Walloon region, and the Brussel-Capital region organize their own green projects within their regional RRP’s. Additionally, the circular economy receives attention as well considering it is an important source of green initiatives. 

It has the potential to transform the Belgian economy and generate new and sustainable competitive advantages, going beyond recycling. It focuses on consumption reduction, longevity, reuse, recovery, eco-design and new forms of consumption of products and services.  

Finally, the transition to a circular economy can also provide solutions to certain societal challenges that have been analyzed within the Belgian RRP. It can be put into place in multiple different sectors such as plastics, food, construction and chemistry. 

Reforms and investments toward a low carbon society 

The Belgian RRP sets aside certain measures to develop towards a low carbon society. The estimated total cost is 204.3 million euro, of which 197.9 million euro (97%) will be covered by the RRF.  

Projects under this component generally aim to contribute to the development of a circular and low-carbon economy. They consider the competencies at different levels of governance and their alignment. More specifically, they aim to develop and support: 

  • Recycling, re-use and repair; 
  • Rental, lending, mutualization; 
  • Industrial symbiosis; 
  • Innovation in the processing of waste and resources;  
  • Training in certain areas of the circular economy. 

These translate into different reforms and investments, catered to each Belgian government: 

The Flemish government 

In Flanders, the circular economy is seen as an ecological objective, where it falls under “Climate, sustainability, and innovation” in its regional RRP. The ambition is that economic recovery makes a maximum contribution to decarbonizing society. For this accelerated transition to a circular economy, “Flemish Circularity” was deployed with a budget of 39 million euro.  It invests in 3 main projects

  1. Development of Flanders as a recycling hub, including the collection of valuable materials, support for companies for research projects with a view to “design to recycle”, etc.   
  2. Support for innovation in the building sector aimed at circular construction   
  3. Research and guidance for companies making the transition to the circular economy 

Flanders puts an emphasis on selective waste collection and the development of a recycling industry (44 million ton in 2022).  

  • Just under 20% of Flemish companies reuse waste, residues or by-products in the same process. More than 25% of the companies ensure that their products can be easily repaired or recycled. 
  • 71 million (85%) of the 84 million tons of materials used annually, for applications other than energy production, remain in the Flemish economy. 

The Walloon government 

Wallonia is committed to a dual approach of “zero waste” and a circular economy. The ambition is to reduce waste and related costs and to create jobs and innovative activities. As a result, “Circular Wallonia” was created, including 10 ambitions translated into more than 60 measures. With a budget of 38 million euro, the main objectives are the following: 

  1. Waste prevention and management 
  2. Reuse of the social-economic sector 
  3. Accompaniment, financing and support of projects 
  4. Circular purchasing 

The Brussels-Captial government 

The Regional strategy for economic development (GSET) is a strategy that constitutes a global action plan for the transformation of the economy, which aims at involving all actors and sectors of the region. To this end, the GSET is based on two main principles

  1. Aligning economic policies with the climate, environmental and social objectives proposed in the Regional Policy Declaration, the Climate Order and the Go4Brussels 2030 strategy (which includes the plan to become carbon neutral by 2050); 
  2. Bring together all the regional plans and strategies, so that the sector-specific policies are coherent with the overall policy vision. 

The driving force of the GSET is to guide companies in this process, and the strategy aims to be inclusive. Transitioning towards a circular economy has its place here, with measures ranging from helping a company with ecological management to completely changing a business model. 

The 4 objectives of the Brussels circular transition are as follows: 

  1. Create new economic opportunities for Brussels’ entrepreneurs; 
  2. Preserving natural capital locally and globally; 
  3. Preserving human capital, favouring a fair and equitable distribution of economic profits, inclusion and participatory and democratic management in companies;  
  4. Responding to the vital functions of the territory and the needs of the people of Brussels by developing a more autonomous local economy that remains open to the outside world. 

FI Group stays on top of new developments at the local, regional, federal and European level. New reforms and investments around circular economy create opportunities for various companies. Our consultants are ready to guide and advise you on any financial opportunities for your further development and the growth of your projects. 

Yvette Poumpalova

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