This report provides an overview at the end of 2021 of the new policies and regulations of the European Green Deal regarding sustainable finance and the circular economy. The goal is to illustrate the operational logic of the European taxonomy of eco-sustainable activities and, more specifically, to analyze the impacts of the regulatory framework of the taxonomy approved so far (the delegated act on the circular economy is still pending and postponed to 2022) on waste-to-energy activities. The cross-sectional analysis of the numerous regulatory initiatives of the European Green Deal has highlighted a finally integrated approach in European policy between sustainable finance and the circular economy. This is characterized by the inclusion of the circular economy objective in the taxonomy for eco-sustainable finance (elevated to the rank of the six main European environmental goals) and by the consideration in the new Commission Plan for the circular economy of the role of private sustainable finance in supporting investments for the transition, also to avoid excessive reliance on public incentives.
Among the main results of the analysis, it can be said that the rules for the mandatory use of the taxonomy in the public reporting of companies on sustainability issues (the so-called “non-financial reporting directive”), together with the proposed expansion of the scope of this directive, will create a formidable “driving force” to direct business activities towards the circular economy. Large companies and all listed companies will need to analyze their activities in relation to the technical screening criteria of the taxonomy on the six environmental goals, including the circular economy, to produce selected information and newly conceived Key Performance Indicators designed to ensure the necessary quality and transparency of information provided by operators offering sustainable investment products compliant with the EU taxonomy. Regarding the delegated act on the technical screening criteria for the circular economy, which is being prepared by the Commission, it is believed that the definition of the circular economy provided by the taxonomy regulation is compatible with the eligibility of many of the types of waste-to-energy recovery activities listed in the Commission’s 2017 guidelines “The role of energy recovery from waste in the circular economy” (at least the same activities already included by the Commission in the delegated act on technical screening criteria for climate mitigation should be eligible). However, current technical guidance from expert groups supporting the Commission appears very restrictive: with the exception of biogas produced from anaerobic digestion of organic waste, there is a reluctance to consider the possible contribution of waste-to-energy processes to the circular economy objective as “substantial.”