External implications of the circular economy transition of the Netherlands and the EU

Summary

The Netherlands’ National Circular Economy Programme reflects its objective of a fair circular economy transition that limits negative consequences for low- and middle-income Countries (LMICs). To deliver on this ambition, it is essential to integrate the implications for LMICs in the programme’s implementation and within other government policies and programmes.

This literature review paper synthesises research on the external implications of the circular economy transition of the Netherlands and the EU. It explores the opportunities and challenges for LMICs, and the support that the EU and the Netherlands can provide to create the right conditions for countries to benefit from the transition and mitigate negative effects.

Some key issues highlighted in this paper are: 

• There is a risk that increased demand for critical raw materials needed for green transition can replicate some of the harmful exploitative practices of a linear economy. Sustainable mining practices to create decent work opportunities and greater local value addition should thus be essential components of a circular economy transition.

• Countries’ ability to move towards higher value activities of circular design and emerging sectors of recycling and repair will depend on existing capacities, access to technologies, infrastructure and an appropriate policy environment. Countries unable to make such a transition would lose out. 

• The EU and the Netherlands can make use of trade policy measures and instruments for private sector development support to promote a just global circular economy transition. Greater efforts can also be made to harmonise circular economy standards, involving stakeholders from LMICs.

• Addressing international dimensions of circular transition requires a holistic approach, integrating implications in existing policies and programmes with stronger involvement from different ministries.