Comments on “Future Vision of the Circular Economy and its Approach toward a Sustainable Society including Carbon Neutrality in 2050”

2022年5月19日

To: Resource Recycling Promotion Office, General Affairs Division and Environment and Economy Division, Environment, Recycle and Resources Bureau, Ministry of the Environment, Japan

Comments on “Future Vision of the Circular Economy and its Approach toward a Sustainable Society including Carbon Neutrality in 2050”

[Name] Proposal Committee, Circular Economy and Global Multi-Value Circulation Study Group

Representative: Komei Halada

[Postal code and address] 〒305-0035

5-2-34 Matsushiro, Tsukuba, Ibaraki, JAPAN

[Telephone] 029-846-5505

[e-mail address.] mvc@susdi.org

This proposal was based on comments initially conceived by the Proposal Committee in response to the “Call for Opinions on the Future Vision of the Circular Society and its Approach, Making the Best Use of the Circular Economy toward a Sustainable Society including Carbon Neutrality in 2050” issued on January 18, 2022 by the Secretariat of the Circular Society Subcommittee, Central Environment Council. The proposal was discussed and compiled on February 28, 2010. However, since electronic application system (“e-Gov”) did not allow us to submit a written opinion containing drawings, we are submitting it not as a public comment but as an opinion to the Circular Economy Promotion Office and the Environmental Economy Division of the Ministry of the Environment, which are mainly involved in promoting the Circular Economy, in the hope that it will contribute to the promotion of the policy.

The Study Group avoids using the expression “Junkan Keizai (circular economy in Japanese)” as it may cause confusion with the “Junkan Shakai (circular society in Japanese” that has long been promoted as a policy in Japan, which reduces the burden on the environment through the recycling of resources and products. We hence use the original term “circular economy” in English.

In addition, this opinion paper has been prepared in conformity with the questions in the “Call for Opinions” from the Secretariat of the Circular Society Subcommittee of the Central Environment Council, which were deemed to reflect the current awareness of the Ministry of the Environment of the problems.

Question 1 In order to build a sustainable society, including carbon neutrality in 2050, what do you think of the need for appropriate resource recycling efforts (including efforts to reduce consumption of natural resources and environmental impact) throughout the entire life cycle, including manufacturing, distribution, sales, consumption/use, and disposal?

It goes without saying that the circular economy is indispensable as a guideline for the social and economic behavior that promotes it in order to build a sustainable society, including carbon neutrality, but the question itself is viewed as only a partial issue of “resource recycling,” which is a different approach in nature to the global approach to the circular economy initiatives.

The global debate is now coalescing around the positioning of the circular economy as shown in the figure below.

In other words, it is recognized that (1) the Circular Economy is required to be problem-solving from a comprehensive perspective that provides solutions for a sustainable society in the three areas of “economy,” “society,” and “environment” as well as the environmental aspect, and (2) to achieve this, it is required to promote actions to “retain”, “regenerate”, and “create” resource values, not just to improve conventional flows.

On the other hand, the supporting materials for this request for opinions and Question 1 itself focus only on “improvement of resource flows,” which corresponds to the left-hand side of the aforementioned figure, and this alone is very different from the recognition that “retaining, regenerating, and creating” resource values is an act of promoting a sustainable society for “the economy, society, and the environment”. As soon as possible, we urgently need to stop confining the circular economy within the framework of “improving resource flows” and “reducing environmental impact” and take a position of “retaining, regenerating, and creating” value that provides solutions for “economy, society, and environment” in order to build a sustainable society, starting with carbon neutrality.

In other words, while Japan’s efforts to promote a recycling-oriented society have some aspects of significant progress in terms of “improving resource flows” which are ahead of the rest of the world, this alone is insufficient to meet the challenge of building a sustainable society, including carbon neutrality, and it is necessary to strengthen efforts to “retain, regenerate, and create” resource values, as emphasized in the Circular Economy.

Question 2 In Japan, we have been building up 3R (Reduce, Reuse, Recycle) initiatives, and in recent years, new business models such as sharing and subscriptions have emerged. What kind of initiatives can be considered to further deepen and expand the circular economy to society as a whole through the implementation of initiatives by companies in their main businesses and various other entities?

These business models are difficult to establish due to insufficient economic efficiency unless they exceed a certain scale (critical mass), and in some cases, they are also resource inefficient. Furthermore, since the decision-making processes of users may differ from those of conventional business models, making it difficult to compare their cost efficiency with each other, there is an aspect where dissemination and fostering will not progress without solving these problems.

Therefore, we believe it is effective to implement the policies and measures listed below to promote and foster these business models.

(1) Policies to promote a shift from selling off goods to selling of service and function.

Development and dissemination of analyzing Life Cycle Costs (LCCs) that enable cost comparisons between these business models and selling off goods.

Promotion of purchasing of services and functions in public green procurement.

(2) Policies to promote the establishment and implementation of life cycle management systems.

Product manufacturers are to be required by law to provide long-term warranty for products and components.

Require product designs that can be replaced by each module/component.

Facilitate the use of digital technology to manage individual products by introducing a system similar to the EU’s DPP (Digital Product Passport).

Implement preferential treatment for product repair services.

(3) Promote the use of cycle design products for goods that serve as a medium for services.

Use of recycled materials.

Promote unification of materials in manufacturing.

Promote standardization among businesses that make the same type of equipment and products.

Promote use of recycled materials among service providers, including establishment of recycled material standards.

(4) Policies to promote recycling of products and resources through digital transformation (DX).

Development and maintenance of digital infrastructure as a basis for recycling-oriented DX business.

(5) Policies to promote proactive measures against breakdowns and disposal.

RRRDR (Remanufacture・Refurbishment・ Repair・Direct Reuse）implementation system in these business models.

Institutional design to promote the establishment and development of collection and recycling routes.

(6) Development and adoption of explicitly available evaluation methods to promote recycling and efficient use of materials associated with servicizing, and preparation of supply chain material management tools for such methods.

(7) Promotion of mindset building for recycling and utilization among providers.

(8) Promoting the establishment of a management and circulation system that can accommodate diverse providers of goods, such as importers.

(9) Promote mind-set building for recycling among users.

In particular, the following points should be considered as new policies.

a)     Cross-ministerial and inter-ministerial “Circular Economy Promotion Council” (Environmental Restoration and Resource Recycling, Environmental Economy, Chemicals, Ministry of Economy, Trade and Industry, Ministry of Agriculture, Forestry and Fisheries, Digital Agency, Consumer Affairs Agency, etc.). b)    Consideration of sales tax reductions for equipment life extension activities such as remanufacturing and repair. c)     Development of a new life cycle cost efficiency evaluation method that takes into account utilization rates. d)    Establishment of a system for communicating information on product content of raw materials for which circulation is important and chemical substances that are obstacles to resource circulation. Consideration of cross-functional utilization of existing systems for this purpose. (e.g. chemSHERPA, etc.). e)     Measures to emphasize the use of information on the part of purchasers and promote initiative in green procurement.

 

1. a) Cross-cutting efforts are a major principle of system improvement toward a circular economy, and if the intention is to promote new business models such as sharing and servicizing, etc., then the first step should be to launch a cross-cutting effort that includes the Digital Agency, Consumer Affairs Agency, etc.
2. b) To promote the establishment and implementation of a life cycle management system, preferential treatment for product repair services is one important measure, and the feasibility of consumption tax reduction for such economic activities should be considered in this context.
3. c) Many of the current life cycle concepts use “product life” rather than “operation” as the functional unit, which does not fit well with the evaluation of servicizing. In cooperation with the Academy, life cycle cost (LCC) analysis and Life cycle assessment (LCA) evaluation methods should be developed and adapted to new business models. In Europe, a resource efficiency evaluation method based on occupancy rather than life expectancy is being discussed.
4. d) The EU has defined CRM (Critical Row Material) as a priority area in its Circular Economy Action Plan, and is promoting the reduction of procurement risks through supply chain management. The automotive industry, including Japan, has added CRM to the Global Automotive Declarable Substance List (GADSL). In response, Japan has also added the EU’s CRM to chemSHERPA (chemical information SHaring and Exchange under Reporting PArtnership in supply chain), a scheme for communicating chemical substances contained in products, and is managing it by adding it to the list of target information to be communicated, which should also be used and managed in Japan.

In addition, the EU is developing a SCIP (Substances of Concern In articles as such or in complex objects (Products)) database for information on molded products containing SVHC (Substances of Very High Concern) as defined in REACH (Registration, Evaluation and Authorisation of Chemicals.), which are considered to be an obstacle to material recycling and resource recovery. Japanese companies are also working on the development of a database of molded products containing SVHC (Substances of Very High Concern) in the EU. Japanese companies are also registering their products in the SCIP database when they put them on the market in the EU. Japanese companies are also cooperating with suppliers of parts and other components of molded products through the aforementioned chemSHERPA. In Japan, it is necessary to make information on substances that impede recycling and resource recovery visible so that recycling and resource recovery can proceed appropriately.

1. e) The Green Purchasing Law is positioned in the “Legal Framework for Establishing a Recycling-Oriented Society” as “the government takes the initiative in promoting procurement of recycled products, etc.” and its basic policy states “utilization and provision of information on environmental products, etc.”. It is important for the government and other purchasers to evaluate, judge, and purchase products based on information on resource recycling. In the U.S., the Comprehensive Guidelines for the Purchase of Recycled Goods (CPG) sets minimum standards for items that should be purchased as recycled or recycled products, and private mechanisms such as environmental labels and EPEAT (Electronic Product Environmental Assessment Tool) are also recommended. standards have been established. It is desirable for governments and independent administrative agencies to set targets for the utilization rate of recycled materials in government procurement, so that they can evaluate and judge products and services with high recycled material content and those that can be used for a long period of time.

Question 3 The Fourth Basic Plan for Circular Economy includes not only environmental aspects but also economic and social aspects, and includes related measures aimed at improving these aspects in an integrated manner. What are some of the initiatives that will promote the circular economy and contribute to the realization of the Sustainable Development Goals (SDGs), including welfare, education, and poverty?

In Japan, it is important to clarify what the Circular Economy is and what it does in a way that is not confusing with the conventional promotion of the formation of a recycling-oriented society, and in a way that the public is convinced of the results of such efforts, so as to make the Circular Economy more important than any specific measures, and to make it contribute to the realization of the Sustainable Development Goals (SDGs). This is essential to make the circular economy an initiative that contributes to the realization of the Sustainable Development Goals (SDGs).

As a suggestion, we propose to clarify the philosophy of the circular economy and link it to the SDGs in the following way.

Circular Economy Promoting the SDGs 1. Enjoy nature’s bounty and use resources in a way that does not place a burden on nature. 　1.1 Use resources sustainably (12: Use responsibility) (6: Water) 　1.2 Expand industries that make use of natural capital (14: Ocean)(15: Land)(7: Energy). 　1.3 Aim for zero waste, man-made products, and environmental pollution (3: Health)(13: Climate) . 2. Let’s create an economy and society where everyone can make rich use of limited resources. 　　　2.1 Create an economy and society in which even unneeded resources can be used for the benefit of those who need them (10: Equality)(1: Hunger) (2: Poverty). 　　　2.2 Create an economy and society where we can share what can be shared and share our wealth with others (1: Hunger)(2: Poverty) (10: Equality)(11: Community development). 　　　2.3 Create an economy where “using” is more important than “having” (10: Equality)(1: Hunger).