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The European Taxonomy for a Circular Economy



The European Taxonomy, a flagship regulation established in 2020, serves as a classification system for economic activities with a positive environmental impact. It directs investments towards six essential environmental objectives:


  • Climate Change Mitigation: Encouraging activities that reduce greenhouse gas emissions and enhance resilience to climate change.

  • Climate Change Adaptation: Supporting measures that increase adaptability to adverse impacts of climate change.

  • Sustainable Use and Protection of Water and Marine Resources: Promoting responsible use of water resources and protection of marine ecosystems.

  • Transition to a Circular Economy: Facilitating the shift towards an economy that emphasizes recycling and minimizes waste.

  • Pollution Control: Encouraging practices that prevent or reduce pollution.

  • Protection and Restoration of Biodiversity and Ecosystems: Supporting activities that preserve and restore natural habitats.


Currently, technical criteria have been defined only for the first two environmental objectives: climate change mitigation and adaptation.

However, on March 30, 2022, the European Commission's Platform on Sustainable Finance published recommendations for the technical criteria of the EU Taxonomy, focusing on four main objectives: transition to a circular economy, sustainable use and protection of water and marine resources, pollution prevention and control, and protection and restoration of biodiversity and ecosystems.

But how is the link established between the European Taxonomy and the circular economy?


Circular Economy Applied to Buildings

Currently, 10 to 15% of construction materials are wasted during the construction phase, with most demolition materials ending up in landfills. To avoid material waste, a circular economy approach involves:


  1. Sourcing raw materials locally to reduce carbon emissions from transportation.

  2. Emphasizing the use of biologically sourced materials that are natural, free from pollutants or toxins if untreated, and can be reintegrated into the cycle through reuse or recycling.

  3. Maximizing the use of recyclable materials and maintaining their original efficiency.

  4. Reusing building structures and components for reconstruction rather than adding new materials to the cycle.

  5. Designing flexible buildings for easy adaptation, deconstruction, and reconstruction.


All of these measures reduce material needs from the outset and waste production at the end of the process, potentially decreasing the building sector's carbon footprint.


Taxonomy and Circular Economy

The European Taxonomy has two regulatory texts related to the circular economy.


1. Recycling of Construction and Demolition Waste:

The Taxonomy promotes the use of durable and recyclable construction materials, encouraging low environmental impact throughout their life cycle. At least 70% (by weight) of non-hazardous construction and demolition waste must be prepared for reuse, recycling, and other material recovery methods. Operators must employ the best available techniques to limit waste production, practice selective demolition to facilitate safe removal of hazardous substances, and sort construction and demolition waste to promote high-quality reuse and recycling.


2. Building Design: Promoting Circularity, Adaptability, and Reversibility


Building Longevity:

The Taxonomy encourages the creation of durable structures designed for an extended lifespan, minimizing the need for frequent demolition and reconstruction.

Circular Design:

Buildings must be designed to promote circularity, demonstrating resource efficiency according to standards such as ISO 20887. This resource efficiency involves an approach that prioritizes efficient material use, encourages recycling, and minimizes waste.

Adaptability and Flexibility:

Buildings should be designed to allow adjustments, modifications, or even reconfigurations, facilitating adaptation to changing needs.


The European Taxonomy and LEED: Strategic Alignment for a Sustainable Future

On January 25, the U.S. Green Building Council (USGBC) and GBCI Europe jointly unveiled a significant document titled "LEED and the EU Taxonomy," highlighting the alignment between certification and the European classification framework.

While the Taxonomy is a classification tool and not a rating system like LEED, their principles align. Particularly for the real estate and construction sector, projects can leverage LEED certification to demonstrate alignment with the EU Taxonomy.

Both LEED and EU Taxonomy requirements address climate change mitigation strategies, including energy efficiency, commissioning, embodied carbon reduction, and resilience.


For a detailed analysis of how LEED aligns with recent developments in European Union (EU) policy, refer to "LEED and the EU Taxonomy" on the U.S. Green Building Council website : LEED and the EU Taxonomy | U.S. Green Building Council (usgbc.org)

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