A new report published by IEEP UK and the Aldersgate Group warns that regulatory divergence between the UK and the EU on circular economy could create additional burdens for businesses, and leaves the UK market exposed to products made to low environmental standards.

The report calls on the UK government to address this through a strengthened vision for policy and regulation in the UK, including with the upcoming Circular Economy Strategy for England due in the autumn. This includes identifying and mitigating challenges caused by divergence, boosting collaboration with the EU on data sharing, and bolstering legislation further up the waste hierarchy to reduce resource use and consumption.

It highlights the EU’s ecodesign policy as one of the starkest examples of divergence between the two jurisdictions. UK businesses that export products to the European single market will need to comply with this regulation, potentially leaving them vulnerable to competition from producers only selling to the UK market, alongside higher costs if required to comply with different and incompatible standards across different markets.

Without measures to address this situation, ambitious and innovative businesses selling into the EU market will be placed at a disadvantage. Conversely, UK consumers would find themselves facing lower-quality products, with less access to repair, reuse and recycling compared to those in Europe.

Both jurisdictions have high ambitions on this issue, and the UK has seen success in places like Wales, which has one of the highest recycling rates in Europe. Leaders should take the opportunity to learn from each other, particularly in implementation of high ambition plans, to drive positive outcomes.

Ben Reynolds, Executive Director, IEEP UK, commented: “This report makes a clear case of the benefits to the UK for aligning with the higher circular economy standards that the EU has established in the period since Brexit. This would chime with the Government’s aims to remove trade barriers and increase economic growth, whilst also delivering for the environment and for UK citizens. The voices of businesses are clear that further delays in action on this may lead to lost revenues and higher costs.

Rachel Solomon Williams, Executive Director, Aldersgate Group, said: “Delivering a circular economy will mean that we make best use of our resources, strengthen supply chains, and support the delivery of net zero and environmental targets. However, the UK’s current regulatory and fiscal frameworks do not effectively enable circularity and fairly reward ambition. Regulations are acting as a barrier to offering circular products, and ambitious businesses face competition from those operating with lower standards. As other markets, such as the EU, make progress, we must collaborate to ensure the UK is not left behind. It’s critical that the government takes action through the upcoming Circular Economy Strategy to address potential divergence and reward ambition in the private sector.”

You can access the report by clicking here.

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