Barriers to the Circular Economy: The Blocking Effect of Regulations

There are a multitude of regulations that businesses and regions must comply to, and for good reason. These regulations keep our waste treated and our products up to a standard. Nonetheless, these same regulations may be the ones standing in the way of a circular economy, intentionally or not.

This is due firstly to the sheer amount of regulations that govern the industrial and economic world. This means companies and industries wishing to work towards a circular economy are trapped by not one but multiple various policies that in some way restrict or counteract efforts towards going circular. And even if one regulation undergoes a change for the better, they likely still find themselves blocked by the effects of all the others.

However, it’s not as if all these limiting regulations purposely and actively seek to inhibit circular activities – many times the blockade is simply a side-effect of the regulation. For example, certain regulations induce waste, especially in the food sector. The primary incident of this is the requirement for food and drink to be labelled with expiry dates. The reason for this is clear and noble – it prevents consumers from purchasing and consuming potentially rotten food. Nonetheless, this law creates waste by causing still-edible food to be thrown out once past its expiry date, due to the fact that expiry dates actually indicate when the food no longer meets quality standards, not when it is unsafe to consume. Hence, the intention of the regulation is to protect consumers, but its side effect is heightened levels of food waste. And these regulations may be the most difficult ones to reshape as they exist for a number of primary concerns, of which allowing for a circular economy is not.

Milk lasts up to a week after its 'best-by' date if stored properly. Source: Eat By Date
Milk lasts up to a week after its ‘best-by’ date if stored properly. Source: Eat By Date

More examples of how regulations indirectly block circular practices is the European Regulation on Shipment of Waste. This regulation is a necessary one, yet it – along with regulations on trade of secondary resources – hinder how waste can be collected, traded, and transported across countries. Furthermore, policy about competition in the market may hinder previously-competing businesses from beginning to cooperate in order to close material loops and narrow waste streams.

So what’s the solution? Certainly it’s not to change each regulation that inhibits circularity? Well, the answer is yes and no. Of course, it would be simply impossible to change each and every regulation, and would be counter-intuitive too. But nonetheless we should still push policy-makers to make tweaks and amendments that would enable the regulations to allow for the achievement of both their primary purposes and a circular economy.

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