Coupling circularity and climate mitigation in industrial sites and their cities and regions

Projects are expected to contribute to all the following outcomes:

• Significant advances in climate mitigation and resource circularity, with associated reduction in pollution and waste, in industrial ecosystems at urban and peri-urban scale.
• Increased local and regional competitiveness and strengthened capacity for innovation of EU industries.
• Long-term change towards sustainable, flexible and responsive local and regional industrial ecosystems that connect key circular economy and climate mitigation stakeholders throughout planning, interventions and value chains.

Relevant indicators and metrics for the 2030 horizon, with baseline values, should be clearly stated in the proposal.

Climate mitigation and circularity are key building blocks for achieving industrial and urban futures that are climate-neutral and sustainable. While mitigation and circularity performance are typically modelled at the global or national level, a gap persists in action plans and practice at local level where the coupling of decarbonisation and circularity against the background of industrial-urban symbiosis and of the sharing economy (energy and materials) could yield significant ecological, economic and social benefits. There is therefore a pressing need to overcome the lack of coordination among industrial, circularity and urban activities and actors that yields sub-optimal outcomes in terms of climate mitigation, energy efficiency, resource use (including water), environmental pollution, material valorisation and waste reduction.

Proposals must involve at least three different demonstration sites and at least three replication sites. The consortia should involve key circular economy and mitigation actors from both local public authorities and industries in a certain region. Demonstration sites are expected to cover at least two different economic sectors, value chains and/or services.

Proposed projects should:

• Set up and deploy innovative governance and business models as well as ‘joint actions’^[1] on climate mitigation^[2] and circularity (such as circular supply models, collaborative consumption models, service system models, hire or leasing models, joint public procurements etc.) in the 3 demonstration sites as defined above.
• Assess and quantify the climate and other benefits of proposed joint mitigation and circularity actions including but not limited to: reduction of greenhouse gas emissions, pollution and water use; reduction of costs for secondary raw materials and waste management; new revenues generated from end-of-life and by-products, waste diversion from landfill and incineration; performance of mitigation infrastructure; industrial-urban symbiosis; creation of new business opportunities; development of green skills and strengthening of environmental profiles.
• Quantify and assess the co-benefits, constraints and trade-offs of coupling circularity and climate mitigation, considering social, economic and environmental aspects, as well as links with key sectors such as energy, buildings and transport. Complementary actions in terms of spatial planning (e.g. more sustainable and efficient uses of land and building stock), digitalisation and data enhancement should also be considered as appropriate.
• Define for each demonstration and replication site the strategies, processes and actions needed to underpin the climate-neutral and circular transition through a systemic, multi-sectoral multi-stakeholder approach. This should include the engagement of relevant stakeholders such as policymakers, research bodies and academia, the civil society and the private sector (industry, entrepreneurs, start-ups, SMEs etc).
• Based on the lessons learned, deliver guidelines and recommended approaches (including innovative methods) to integrate circularity in the cities’ mitigation strategies and vice versa.
• Implement activities to develop and secure long-term support from the national and regional public authorities, which may include the establishment of inter-institutional multi-level governance partnerships, the introduction of binding rules, regulations, subsidies and/or other economic incentives.

Proposals should plan for early financing follow-up by linking with the Climate City Capital Hub of the NetZeroCities Mission Platform and the Circular Cities and Regions Initiative financial advisory services (including the Horizon Europe funded Project Development Assistance Projects and the European Investment Bank’s Circular City Centre). This should serve to further scale-up and deploy at city/region scale the innovative activities/measures/business models through a combination of funding sources and financial instruments beyond the duration of the proposed action.

Proposals should envisage clustering activities with other projects selected under this topic, which could be in the form of cooperation, consultations as well as joint activities on cross-cutting issues such as sharing results, lessons learned and ways to address barriers and mitigate risks, joint communication, dissemination and capacity building activities, or assessing and evaluating impacts. Dedicated tasks with appropriately earmarked resources should be planned to this end. These tasks may also include collaboration with relevant CCRI-related projects^[3] and relevant projects funded under the Cities Mission.

As part of the broader European Green Deal framework, proposals should link as relevant with the objectives of the new Circular Economy Action Plan of 2020^[4] (that recognises the interlinkage between the circular economy and climate policies, presenting ‘circularity as a prerequisite for climate neutrality’) and the Green Deal Industrial Plan of 2023^[5] (that, together with the 2020 Industrial Strategy^[6] and its 2021 update^[7], sets the framework for the transformation of the EU’s industry for the net-zero age). Projects should also link as relevant with the objectives of the Net Zero Industry Act^[8], the Critical Raw Materials Act^[9] and the Clean Transition Dialogues^[10] that highlight the importance of circularity in the green transition. In addition, actions should consider and promote synergies with pollution reduction measures, with reference to the Zero Pollution Action Plan^[11] and the Industrial Emissions Directive ^[12]. Synergies are expected with other relevant EU initiatives, such as the Hubs for Circularity^[13] and the Regional Innovation Valleys^[14], which foster industrial circularity hubs and support circularity transition at a local and regional level.

This action supports the follow-up to the July 2023 Communication on EU Missions assessment^[15].

[1] In this context, the term ‘joint actions’ refers to actions that address both climate mitigation and circularity challenges.

[2] As defined in the Info Kit for Cities: cb258381-77d5-435a-8b25-9a590795dc9e_en (europa.eu)

[3] List of CCRI Projects | Circular Cities and Regions Initiative (europa.eu)

[4] https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

[5] COM(2023) 62 final

[6] COM(2020) 102 final

[7] COM(2021) 350 final

[8] COM(2023) 161 final

[9] COM(2023) 160 final

[10] COM(2024) 163 final

[11] https://environment.ec.europa.eu/strategy/zero-pollution-action-plan_en

[12] https://environment.ec.europa.eu/topics/industrial-emissions-and-safety/industrial-emissions-directive_en

[13] Set up under Horizon Europe, the Hubs for Circularity are first-of-a-kind, lighthouse demonstrator plants of near commercial size implementing industrial and/or urban industrial symbiosis, optimising the use of resources in energy-intensive industries and beyond.

[14] The Regional Innovation Valleys for Bioeconomy and Food Systems contributes to the New European Innovation Agenda by building 100 regional deep-tech innovation valleys, fostering bioeconomy deployment, addressing the EU's innovation gap, and achieving circularity.

[15] COM(2023) 457 final and SWD(2023) 260 final