Why the Federal Council is sharpening its focus on circularity

The efficient use of resources will be anchored in the Environmental Protection Act, supporting Switzerland’s transition to a circular economy.

In brief

• The Federal Council accepted the parliamentary initiative “Strengthening the Swiss circular economy”, focusing on the creation of new provisions in the Environmental Protection Act.
• The initiative aims to close material cycles more consistently in future by strengthening the circular economy, reducing environmental pollution and increasing the efficiency and security of supply of the Swiss economy.

As a prosperous industrialized country, Switzerland has an above-average consumption of natural resources per capita. Nevertheless, Switzerland sets itself high recycling goals – the Beverage Container Ordinance sets a target rate of 75% for glass, PET and aluminum – but products and resources are rarely kept in closed cycles. 

Worldwide, growing consumption and predominantly linear production and consumption systems are pushing climate stability and ecosystems to their limits. This increases the risk of negative impacts on the quality of life and the economic system - also in Switzerland. In 2019, only 14% of all materials consumed in Switzerland were recycled materials. In this regard, measures to close material cycles contribute to both, to Switzerland's climate goals and to a sustainable economic future.

Creating clear framework conditions

The Federal Council aims to foster the circular economy by anchoring it in the Environmental Protection Act. This includes, in particular, the principles of conserving natural resources and reusing materials and products that are currently disposed of. In the consultation process, the bill received broad support from the cantons, associations of municipalities and cities, political parties, business organizations and other stakeholders. The revised Environmental Protection Act will induce specific regulations on circularity measures on the Federal and Cantonal levels.

By ensuring compatibility with the regulations of the most important trading partners, in particular the regulations currently being developed in the European Union (EU), the international dimension must be taken into account when implementing the proposed provisions. With the European Green Deal adopted in December 2019, the EU Commission is pursuing the goal of becoming the first continent to become climate-neutral.

Developments of EU Regulation

The new circular economy action plan, which was adopted by the European Commission in March 2020, is one of the building blocks of the European Green Deal. Its ambition is to scale-up the circular economy to achieve climate neutrality by 2050, by making sustainable products the norm in the EU. The European Commission presented a package of proposals to strengthen the circular economy on 30 March 2022. “Transition to a circular economy” is one of the six objectives- under the EU Taxonomy, striving to improve circularity in designing and manufacturing products. In the context of the Corporate Sustainability Reporting Directive (CSRD), ESRS 5 introduces disclosure requirements on Resource Use and Circular Economy, encompassing the entire value chain of companies in scope.

Due to the close economic ties between Switzerland and the EU, the further development of circular economy measures by the EU Commission entails the need for trade and environmental policy action in Switzerland, too. On the one hand, additional distortions of competition and trade barriers must be avoided by taking important European and other international developments into account. On the other hand, the European Green Deal is an opportunity for Swiss companies in the area of the circular economy, resource conservation and cleantech.

Concept of natural resource conservation

The conservation of natural resources (in short "resource conservation") is to be understood broadly. The term "natural resources" includes raw materials as well as the climate, soil, clean water, clean air and biodiversity. Raw materials include minerals, fossil raw materials and metals as well as products from forestry and agriculture. The consumption of raw materials goes hand in hand with environmental pollution and the consumption of other natural resources. Resource conservation means using natural resources without depleting them. In this sense, the term resource efficiency is to be understood more broadly than material or energy efficiency. (Translated from the Report of the Environment, Spatial Planning and Energy Committee of the National Council on the parliamentary initiative to strengthen the Swiss circular economy.)

Based on a specifically developed concept for mapping the circular economy at the company level, 8,000 companies of the KOF Enterprise Panel, which is representative for Switzerland, were surveyed in 2020 on 27 areas relating to the circular economy. The analysis found that 12% of companies generate more than 10% of their sales with circular products/services. In addition, by increasing the use of secondary raw materials instead of importing primary raw materials, companies contribute to the security of supply of the Swiss economy. Various international studies (including by the OECD, EEA and UNEP) confirm the overall positive effect and the market in the area of cleantech and circular economy is growing at an above-average rate worldwide. Therefore, the openly formulated provisions come to a right time and finally facilitate a positive cost-benefit ratio in the implementation of each individual measure, especially with regard to SME compatibility.