Circular economy policy barriers: : An analysis of legislative challenges in white goods and automotive industry within the EU

Abstract: Increased consumption, depletion of natural resources and sustainability concerns have challenged the conventional linear model of production, consumption and disposal of products. Circular economy (CE) has become one of the most popular paradigms that can contribute to economic growth and concurrently satisfy sustainability ambitions. Transitions from a linear economy to a CE will require various reformations on different industry levels with more close collaboration among actors in value chains. For a successful transition, policies and legislative frameworks have shown to be crucial to shape new collaborations and define how costs and benefits are shared among actors in circular value chains. The current legislative setting however may result in barriers in transitioning towards CE and therefore may require adjustments. In this study, the legislative factors hindering the implementation of CE in the European Union (EU) are explored for white goods industry (within the scope of service-based business) and automotive industry (within the scope of remanufacturing). Potential policy adjustments are discussed, which may contribute to accelerate CE adoption. In doing so, qualitative research is conducted where primary data is collected through semi-structured interviews. The primary data is complemented with secondary sources, such as EU directives and reports, which is then discussed in light of academic literature. The findings indicate that the transition towards service-based business models is at early stages for white goods companies. As a result, more comprehensive and consistent policy instruments are necessary to address transitional changes and safeguard long-term success of circular and service-based models. Adjustments in current EU policies are recommended to focus on further developing infrastructure for efficient return of End-of-Life (EoL) appliances. Challenges in the automotive remanufacturing are mainly associated with a lack of policies addressing remanufacturing. This in turn has resulted in absence of sufficient clarifications and guidelines regarding definitions and standards for remanufacturing processes and remanufactured products. Therefore, in order to accelerate CE through promotion of remanufacturing, policies require an introduction of clear definitions for remanufacturing. This study is an attempt to highlight key areas affecting the pace of CE implementation in legislative context, which can serve as input for policy makers and researchers. The findings of this study are mainly in line with identified literature. In future, this study can be expanded to other industries dealing with CE adoption.