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This collection features a selection of case studies, mainly based on the [2024 Circularity Gap Report](https://www.circularity-gap.world/2024). 

In this year’s Report, we shift from exploring the what to the how: exploring the different ways that we need to ‘change the rules of the game’ and create a set of conditions that discourage the overshoot of planetary boundaries and ‘undershoot’ of human development. This process has resulted in us spotlighting 12 of the original 16 solutions, highlighting the country profile that they are most relevant to, as well as placing people at the centre of this story for the first time. Based on extensive interviews and desk research, this Report aims to show governments and industry leaders that if they want to turn theory into action and scale an economy that delivers on needs within the safe limits of the planet, they need to dismantle harmful entrenched processes and align enabling elements. 

[Circle Economy](https://www.circle-economy.com/) is a global impact organisation with an international team of passionate experts based in Amsterdam. We empower industries, cities, and nations with practical and scalable solutions to put the circular economy into action. Our vision is an economic system that ensures the planet and all people can thrive. To avoid climate breakdown, our goal is to double global circularity by 2032. 

Through the *Circularity Gap Reporting Initiative*, our mission is to deliver an annual global Circularity Metric that measures the state of the world economy and identifies key levers to transition to global circularity. 

To learn more about these interventions to accelerate the circular transition, read the [latest Circularity Gap Report 2024](https://www.circularity-gap.world/2024), as well as previous editions of the global [Circularity Gap Reports](https://www.circularity-gap.world/global).

Global Circularity Gap Report 2024

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Policy case

Impact on the availability of resources as well as their effect on living organisms, ecosystems, and components of the environment.

Ecological Impact

Minimise waste through diversion: Instead of sending waste to landfill, it is redirected into other industrial processes for handling, treatment, recycling, recovery, or reuse in various forms. 

Minimise waste through design: At the outset of a process of project, plan and design such that there is zero waste or minimal waste during production, use, and at end of life. 

Minimise Waste (SDG12)

Producing and providing business and consumer goods and services

Goods and Services

While resources are in-use, maintain, repair and upgrade them to maximise their lifetime and give them a second life through take back strategies when applicable

Stretch the lifetime

Upgrade, repair, and maintenance while in-use

Maximise lifetime of products in-use

Providing repair services or maintenance services for products or parts

Product maintenance, repair

These countries are home to around a quarter of the global population, yet consume over one-third (34%) of raw materials. Shift countries’ material footprint per capita is 4.6 times that of Build countries (largely due to the overconsumption of consumer goods imported from Grow counties) and 1.6 times that of Grow countries.

These are high-income countries in the Global North, as well as in the Gulf, Australia, and Oceania. Examples include:
- Member States of the EU
- the US
- Japan
- the UK
- Canada
- Argentina, ...

While much of their infrastructure is already built, they still contribute heavily to the overshoot of planetary boundaries: they contribute 42% of climate change, 27% of nitrogen, 18% of phosphorus, 16% of freshwater use and 38% of land use change.

To find out what country profile your country belongs to, explore [this interactive story](https://circularity-gap.world) and search for your country on the final map.  


Shift

Manufactured goods, such as vehicles, textiles, appliances and equipment and their associated production processes are big employers but:
- production processes often rely on fossil fuels and currently drive one-third of the overshoot on the climate change planetary boundary due to its GHG production, 
- material- and energy-intensive industrial activities are linked to deforestation and drive 15% on both the land use and freshwater planetary boundaries, 
- manufacturing goods results in substantial amounts of hazardous industrial waste and leaks chemicals into the environment.

Here, circular solutions must tackle the full value chain, but material demand must also shrink: this will necessitate a societal shift to favouring sufficiency over excess and reducing consumption to sustainable levels. Our four key solutions for manufactured goods are:
- Mainstream industrial symbiosis and efficiency : Achieve process improvements, scrap diversion and reduction in yield losses through greater industrial symbiosis and efficiency. Foster tighter collaboration within and between industries to deliver powerful material and emissions savings.
- Extend the lifetime of machinery, equipment, and goods: Maximise the lifetime of goods that serve our daily needs to bring a number of environmental benefits. 
- Buy what's needed: Reduce the number of purchases of common electronic goods, appliances, and other equipment to sufficiency levels. 
- Eschew fast fashion in favour of sustainable textiles: Drastically reduce new clothing purchases. All used clothing should go on to be repaired, reused or, if needed, recycled appropriately. Prioritise natural and local textile manufacturing, as well as higher-quality and more durable garments. 




👕📱 Consumer Goods

**Ensure sustainable consumption and production patterns**

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The world is seriously off track in its effort to halve per-capita food waste and losses by 2030.The COVID-19 pandemic has had significant impacts on consumption and production patterns, with disruptions to global supply chains and changes in consumer behaviour. 

Responsible consumption and production must be an integral part of the recovery from the pandemic. 
But the global economy also needs to speed up the decoupling of economic growth from resource use by maximizing the socio-economic benefits of resources while minimizing their negative impacts. 

Reporting on corporate sustainability has tripled since the beginning of the SDG period, but the private sector will need to significantly improve reporting on activities that contribute to the SDGs. 

This primarily entails environmentally sound management of "toxic chemicals" A substantial use of chemicals is essential to meet the social and economic goals of the world community, and these can be used with a high degree of safety when best practices are followed.  Gross chemical contamination, with grave damage to human health, genetic structures reproductive outcomes, and the environment, has been continuing within some of the world's most important industrial areas, and restoration will require major investment as well as the development of new techniques.
Effective control of the generation, storage, treatment, recycling and reuse, transport, recovery and disposal of hazardous wastes is another similar challenge. 
In addition,  solid wastes include all domestic refuse and non-hazardous wastes such as commercial and institutional wastes, street sweepings construction debris, and, in some countries, human wastes. As hazardous waste is frequently intermixed with other waste, this poses particular management challenges.
Finally, this target ensures that radioactive waste is safely managed, transported, stored and disposed of, with a view to protecting human health and the environment. 

To deliver SDG12, it is crucial to implement policies that support the shift to sustainable practices and decouple economic growth from resource use.

Sources: [https://sdgs.un.org/goals/goal12](https://sdgs.un.org/goals/goal12)
[https://sdgs.un.org/topics/chemicals-and-waste](https://sdgs.un.org/topics/chemicals-and-waste)

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12. Responsible consumption and production

Ensure sustainable consumption and production patterns

👕📱 Consumer goods

Based on extensive interviews and desk research, this Report aims to show governments and industry leaders that if they want to turn theory into action and scale an economy that delivers on needs within the safe limits of the planet, they need to dismantle harmful entrenched processes and align enabling elements - policy, finance, and people 

- Create a level of policy playing field: Set the ‘rules of the game’ through policies and legal frameworks that incentivise sustainable and circular practices while penalising harmful ones, thereby shaping the nature and scale of economic activities across industries and nations. 



Policy

Slow strategies aim to keep materials in use for as long as possible, for example through design for durability and repairability. A more circular economy is also a slower one: materials, components, and products—and even buildings and infrastructure—that we lock in stocks are made to last. This will lower material demand in the long run, in essence also serving to narrow resource flows.

Slow

Impacts

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Industries

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The principles of a circular economy concern designing out waste, regenerating ecosystems and keeping items in use. Decoupling the economy from material flows—improving the rate of resource productivity faster than the economic growth rate—is also a consistent guide. By evolving with the growing number of applications of circular economy principles, and consolidating these strategies across thematic areas, Circle Economy’s Key Elements Framework (KE) renders the elements of the circular economy salient and serves as a basis to derive contextual strategies and interventions. 


The Framework consists of:
- Core Elements: Activities directly handling product or material flows; and uniquely,
- Enabling Elements: those that remove obstacles for core actors.


Key elements of the circular economy

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Circle Economy's framework of strategies and activities that define the circular economy

Whilst no two countries are the same, there are still obvious similarities between some of them, with discernible development patterns and parallels in evidence. Common problems and shared solutions help place unique country identities and individual issues in context.

Whilst this classification is far from clear-cut and exhibits some overlap, it does underline how the discourse on transitioning to a circular economy needs to account for both differences and commonalities, if we are to arrive at a more strategic and instructive analysis. It also allows to highlight a set of key themes that are likely to be central to the countries that fall under the respective profiles. 

Country profiles (Build, Grow, Shift)

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A framework to distinguish between different country profiles and their circular transition needs.

Thematic Areas

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**These 17 Goals recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.**

The SDGs build on decades of work by countries and the UN, and especially on the Millennium Declaration adopted in September 2000 at UN Headquarters in New York which let to the elaboration of eight Millennium Development Goals (MDGs) to reduce extreme poverty by 2015.

In 2015, the Paris Agreement was signed. A major blueprint came out of this: The Sustainable Development Goals: 17 overarching goals—and 169 targets—that governments are aiming to meet by 2030. Significant progress has been made in terms of poverty, health and inequality, but there's still a way to go. This is where the circular economy comes in: by circulating resources multiple times, the circular economy tackles issues of scarcity and allows all to access what they need—without overburdening the earth. If it's implemented in a holistic way—affording attention to social considerations and the fair distribution of resources— it also offers a pathway for achieving the SDGs; and the link between the two is ever-growing. To read more about the link between the SDGs and the circular economy, click [here](https://www.circle-economy.com/blogs/how-the-circular-economy-can-help-us-reach-the-sustainable-development-goals).

It is the Division for Sustainable Development Goals (DSDG) in the United Nations Department of Economic and Social Affairs (UNDESA) which provides substantive support and capacity-building for the SDGs and their related thematic issues. TheDSDG plays a key role in the evaluation of UN systemwide implementation of the 2030 Agenda and in advocacy and outreach activities relating to the SDGs. In order to make the 2030 Agenda a reality, broad ownership of the SDGs must translate into a strong commitment by all stakeholders to implement the global goals. DSDG aims to help facilitate this engagement.
Alongside this, the annual High-level Political Forum on Sustainable Development serves as the central UN platform for the follow-up and review of the SDGs.
In addition, the UN Secretary-General presents an annual SDG Progress report, which is developed in cooperation with the UN System, and based on the global indicator framework and data produced by national statistical systems and information collected at the regional level.

To read more information: [https://sdgs.un.org/goals](https://sdgs.un.org/goals)

Sustainable Development Goals (SDGs)

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In the 2024 Report, we shift from exploring the what to the how: exploring the different ways that we need to ‘change the rules of the game’ and create a set of conditions that discourage the overshoot of planetary boundaries and ‘undershoot’ of human development. 

This process has resulted in us spotlighting 12 of the original 16 solutions, highlighting the country profile that they are most relevant to, as well as placing people at the center of this story for the first time. 


Based on extensive interviews and desk research, this Report aims to show governments and industry leaders that if they want to turn theory into action and scale an economy that delivers on needs within the safe limits of the planet, they need to dismantle harmful entrenched processes and align enabling elements:

- Create a level policy playing field: Set the ‘rules of the game’ through policies and legal frameworks that incentivise sustainable and circular practices while penalising harmful ones, thereby shaping the nature and scale of economic activities across industries and nations. 

- Get the economics right: Adjust fiscal policies and practices to create true prices and ensure that circular solutions are funded so that they can replace linear norms.

- Build circular expertise and skills: Ensure people are skilled and trained to ensure a just transition where opportunities and decent livelihoods are fairly distributed across and within societies.

Enabling factors

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Based on the work of [Bocken et al. (2016)](https://www.researchgate.net/publication/309699661_Product_design_and_business_model_strategies_for_a_circular_economy), the Four Flows Framework serves as a simple framework for managing resource flows in a circular economy by using less (Narrow), using for longer (Slow), using again (Cycle), and using clean, regenerative materials and energy (Regenerate).

These different principles of circular economy can be applied to our socioeconomic metabolism: we can design stocks like buildings, infrastructure, machinery, and vehicles to be rich resource mines for the future, and design manufactured goods and consumables to be cycled and made regenerative. Furthermore, the focus must also centre on getting more value out of fewer materials. Achieving the aims of a circular economy—minimising material use, regenerating the Earth, and preventing material losses—can be done through these four key strategies mentioned above.

Source: Circle Economy. (2023). *[The circularity gap report 2023](https://www.circularity-gap.world/2023)* (p.22). Amsterdam: Circle Economy. 

Four Flows Framework

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    Coronavirus: Aktuelle Informationen          Pressekonferenz am 14. Dezember 2020   Kurt Haider
Abteilung Umweltschutz – Land OÖ  Reparaturbonus – eine Erfolgsgeschichte Reparieren statt Wegwerfen - dieses Prinzip der Kreislaufwirtschaft ist eine große Chance für den Klimaschutz, verursacht viel weniger CO2-Emissionen und wird immer erfolgreicher. So konnte von September 2018 bis Dezember 2019 rund 260 Tonnen Elektroschrott eingespart werden. Nun folgt ein neuer Reparaturbonus des Landes – mit noch größerem ökologischen Steuerungseffekt, so LR Kaineder. 
Quelle: Land OÖ, Verwendung mit Quellenangabe       



Discarded electronic and electrical equipment contains potentially harmful materials that pollute the environment and increase the risks for people involved in recycling e-waste. To counter this problem, the EU has passed legislation to prevent the use of certain chemicals, like lead.

Many rare minerals that are needed in modern technology come from countries that do not respect human rights. To avoid inadvertently supporting armed conflict and human rights abuses, MEPs have adopted rules requiring European importers of rare earth minerals to carry out background checks on their suppliers.
 
In March 2020, the European Commission presented a new  circular economy action plan that has as one of its priorities the reduction of electronic and electrical waste. The proposal specifically outlined immediate goals like creating the right to repair and improving reusability in general, the introduction of a common charger and establishing a rewards system to encourage recycling electronics.USB Type-C will become the common charger for most electronic devices in the EU by the end of 2024. Laptops will have to be equipped with a USB Type-C port by 28 April 2026.In March 2023, the Commission presented a new proposal to promote repairing and reusing goods. Within the legal guarantee It would require sellers to repair products unless it is cheaper to replace them. Beyond the guarantee, it would provide rights to make repairs easier and cheaper.

              Regulation (EU) 2017/2394 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004  (the CPC Regulation) lays down a cooperation framework to allow national authorities from all countries in the European Economic Area to jointly address breaches of consumer rules when the trader and the consumer are established in different countries.Collectively, the national authorities form a European enforcement network, the "CPC Network".National enforcement authorities have strong powers to address unlawful practices and identify rogue traders. They can request information from domain registrars and banks to detect the identity of the responsible trader, carry out mystery shopping, for example, to check geographical discrimination or after-sales conditions, and to order the immediate take-down of websites hosting scams.The European Commission coordinates the cooperation between these authorities to ensure that consumer rights legislation is applied and enforced in a consistent manner across the Single Market. It can alert the CPC network and coordinate EU-wide enforcement action to tackle practices which harm a large majority of EU consumers. Authorities can accept commitments from the businesses concerned that they will correct their practices, provide remedies and compensation to the consumers affected. With the entry into application of the Directive on enforcement and modernisation of consumer law the sanction could reach at least 4% of the turnover of the businesses in the Member States concerned.The list of CPC authorities, single liaison offices, designated bodies and entities issuing external alerts can be found on the webpage of the Consumer Protection Cooperation Network.    Download  
          

   DIRECTIVE (EU) 2019/771 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  of 20 May 2019  on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC (Text with EEA relevance)   (1)   OJ C 264, 20.7.2016, p. 57.  (2)  Position of the European Parliament of 26 March 2019 (not yet published in the Official Journal) and decision of the Council of 15 April 2019.  (3)  Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ L 304, 22.11.2011, p. 64).  (4)  Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees (OJ L 171, 7.7.1999, p. 12).  (5)  Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (OJ L 177, 4.7.2008, p. 6).  (6)  Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services (see page 1 of this Official Journal).  (7)  Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ L 351, 20.12.2012, p. 1).  (8)  Regulation (EU) 2017/2394 of the European Parliament and of the Council of 12 December 2017 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004 (OJ L 345, 27.12.2017, p. 1).  (9)  Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers' interests (OJ L 110, 1.5.2009, p. 30).  (10)   OJ C 369, 17.12.2011, p. 14.   ANNEX CORRELATION TABLE       Directive 1999/44/EC   This Directive     Article 1(1)   Article 1     Article 1(2)(a)   Article 2, point (2)     Article 1(2)(b), first indent   Article 3(4)(b)     Article 1(2)(b), second and third indents   Article 2, point (5)(a)     Article 1(2)(c)   Article 2, point (3)     Article 1(2)(d)   Article 2, point (4)     Article 1(2)(e)   Article 2, point (12)     Article 1(3)   Article 2, point (15) and Article 3(5)(a)     Article 1(4)   Article 3(2)     Article 2(1)   Article 5     Article 2(2)(a)   Article 6, point (a) and Article 7(1)(b)     Article 2(2)(b)   Article 6, point (b)     Article 2(2)(c)   Article 7(1)(a)     Article 2(2)(d)   Article 7(1)(d)     Article 2(3)   Article 7(5)     Article 2(4)   Article 7(2)     Article 2(5)   Article 8     Article 3(1)   Article 10(1)     Article 3(2)   Article 13(1)     Article 3(3), first subparagraph   Article 13(2) and Article 14(1)(a)     Article 3(3), second subparagraph   Article 13(2)     Article 3(3), third subparagraph   Article 14(1)(b) and (c)     Article 3(4)   Article 2, point (14)     Article 3(5)   Article 13(4)     Article 3(6)   Article 13(5)     Article 4   Article 18     Article 5(1)   Article 10(1), (2), (3), (4) and (5)     Article 5(2)   Article 12     Article 5(3)   Article 11     Article 6(1)   Article 17(1)     Article 6(2)   Article 17(2)     Article 6(3)   Article 17(2)     Article 6(4)   Article 17(4)     Article 6(5)   Article 17(3)     Article 7(1), first subparagraph   Article 21(1)     Article 7(1), second subparagraph   Article 10(6)     Article 7(2)   —     Article 8(1)   Article 3(6) and (7)     Article 8(2)   Article 4     Article 9   Articles 19 and 20     Article 10   Article 22     Article 11(1), first subparagraph   Article 24(1), first subparagraph     Article 11(1), second subparagraph   Article 24(1), third subparagraph     Article 11(2)   Article 24(1), fourth subparagraph     Article 12   Article 25     Article 13   Article 26     Article 14   Article 27      

 Skip to content        This article was co-authored by Right to Repair Europe’s national members, including  Markus Piringer from Repair Network Vienna, Katrin Meyer from Runder Tisch Reparatur, Ronan Groussier from Halte à l’Obsolescence Programmée and Jessika Richter from Lund University, Sweden. Visual: own canva design, illustration by Macrovector While we wait for the proposal of new consumer legislation to promote repair from the EU Commission, success stories from member states provide wonderful examples of far-reaching measures on repair that we’d like to see at EU level.  Despite some legislative progress, none of the EU legislation currently in the pipeline tackles the unfair cost of repair. Requiring manufacturers to make spare parts available (for example through the new ecodesign rules on smartphones and tablets) is a very good step, but this doesn’t mean that these parts will be affordable.  To tackle this, financial incentives are needed to ensure affordability of repair. Let’s look at national policy examples such as the repair bonuses in Austria and Germany, the newly implemented French repair fund, and tax breaks on repair in Sweden as inspiration for EU level policies that could lead to eventually preventing large amounts of waste. Repair bonuses in Austria and Germany The repair bonus was first piloted in the city of Graz in Austria in 2017. Citizens could be refunded up to 50% of the total cost of a repair, up to a maximum of €100. The system initially only applied to very few electrical appliances. After the success of the repair bonus in Graz, the system was later extended to 3 Austrian federal states (Styria, Upper Austria, Lower Austria) and to the city of Salzburg, resulting in approximately 260 tons of e-waste avoided between September 2018 and December 2019.  In the autumn of 2020, a repair funding scheme was also introduced in the city of Vienna, resulting in 90% of the claimed items being successfully repaired, thereby saving 540 tons of CO2 and supporting 83 local businesses. In contrast to other regions, the repair bonus in Vienna was introduced as a voucher. This more customer-friendly version proved to be very successful and was consequently adopted as an Austrian-wide scheme which was introduced in April 2022.  In practice, under the Austrian “Reparaturbonus”, each voucher covers 50% of the repair cost, up to €200 per product repair. It also subsidises 50% of the price of a cost estimate of a repair, up to a maximum of €30. The bonus can be redeemed when the invoice is paid and must be valid at this point in time, regardless of when the order was placed. The bonus, redeemable at 3,153 repair shops around Austria, is financed by €130 million from the EU Covid-19 recovery fund, and has already subsidized 353.196 repairs from April to December 2022.  Another success story involves the repair bonus in the German state of Thuringia. The system, which was introduced in 2021 with an initial funding amount of €500,000, soon had to be expanded due to high demand for repairs! Meanwhile, the second funding period has also been exhausted, almost 12,000 repairs were funded in 2022. In 2023, phase three will kick off.  The basic principle is simple: the Thuringian Ministry of the Environment covers 50% of the repair bill, up to a maximum of €100. During the first funding phase in 2021, for which an evaluation is now available, an average of around €75 per repair was subsidised. Settlement takes place via the consumers: they submit their bill online and apply for reimbursement.  What was proven in Thuringia is that people want to repair things. Previously, repairs failed not necessarily due to lack of options, but simply because the repair costs were too high. Accordingly, the bonus was used extensively in both urban and rural areas. Smartphone repair shops in particular have seen a real boom in business since the introduction of the bonus. Accordingly, the rest of the German states are closely observing developments in Thuringia. Following a limited but successful pilot project in the city of Leipzig, the state of Saxony has now also decided to follow suit by introducing a repair bonus. In December, the State Parliament made a total of €2.5 million available for the years 2023 and 2024. The possibility of further repair subsidies is currently being discussed in many other of the 16 German states. Proposals are currently being considered in Bremen, Hesse and Saarland. In Berlin, a repair bonus has been announced in the government programme (Koalitionsvertrag). This being said, implementation is not yet in sight. The French repair fund  The newly launched repair fund in France also provides a good example of how governments can help to make repair more affordable. Through this fund, a reduction is directly discounted from the consumer’s repair bill. The scheme is financed through Extended Producer Responsibility (EPR) fees paid by producers and managed by French eco-organisations. Consumers receive a significant reduction of their repair bill (around 20%), which applies to all out-of-warranty repairs for eligible products.  The first repair fund focused on electric and electronic devices and was launched on 15 December 2022. In order to benefit from the discount, users may simply take their product to a repairer authorised to offer the bonus. A lump sum discount is set per product and deducted from the final cost of the repair. In the table below you can see a list of eligible products:  Source: https://www.label-qualirepar.fr/wp-content/uploads/2022/07/soutiens-financiers-fonds-reparation.pdf To offer the bonus, repairers must obtain the “Qualirepar” label, which has been specifically created in the context of the repair bonus. The label aims to guarantee the quality and reliability of the listed repairers and to give them visibility. At the end of each month, eco-organisations reimburse repairers for bonuses granted to their customers.  So far, the labelling process has been criticised by some as being too cumbersome for independent repairers, and the number of labelled repairers is still too low. To date 1031 repairers have obtained the label and 1800 are in the process of getting it. The French government aims at labelling at least 4000 repairers until the end of 2023.  The launch of this first fund is just the beginning of a broader project, as new funds will be launched progressively throughout 2023, for different product groups such as sporting goods, gardening and DIY products, and textiles.  The VAT reduction on repair in Sweden  For several years now, there has also been another approach to promoting repair in the form of a reduced Value Added Tax (VAT) on repair services.In 2016 Sweden reduced its VAT rate from 25% to 12% for small repairs of bicycles, clothing and shoes. In 2022 this was further reduced to 6%, but will subsequently be reversed back to 12% in 2023. Background The idea is not at all new.  An EU Council Directive from 1999 introduced the option to reduce VAT on labour-intensive repair services such as bicycle or shoe repairs.This was eventually made a permanent option for member states to implement in 2009 through another Council Directive.   Several countries have adopted this measure from the beginning. For instance in Belgium a reduced VAT rate for small repairs (not 12% as in Sweden but only 6% – the minimum allowed by the EU Directive is 5%) was introduced on January 1st 2000, prolonged several times and made permanent as of July 2011. Many other countries have also adopted the measure (an overview of European VAT rates can be found here). In Sweden, the measure is complemented by a system of tax deductibility of labour costs for white goods repair. So, how does it work? This measure falls under the RUT system (‘Rengöring, Underhåll, Tvätt’ which means Cleaning, Maintenance & Laundry) meaning that 50% of the labour expenses for household appliance repair are tax deductible up to a maximum of 25000kr per year (slightly over €2500 euro) or 50000kr for people above 65 years old. The system allows the repair business to immediately deduct this amount from the invoice, so the customer never actually has to pay it.  A full overview of the procedure can be found here.  “You get the reduction through the fact that the provider of the service deducts part of the labor cost on your invoice. After you have paid the invoice, the provider of the service requests payout from the tax agency. When the tax agency grants the payment to the provider of the service, they already fill in the amount in your tax declaration. Keep in mind that you must have paid enough tax during the fiscal year to apply the deduction.” Although the objective of the Swedish initiative was good, and we welcome any measures seeking to tackle the price of repair, the scheme was not without its shortcomings, and the general conclusion was that this specific set of measures did not have a huge effect on promoting repair. For example, the biggest discount only applies to repairs done at the consumer’s home, brown goods are excluded from the scope, and some repairers found the scheme’s paperwork overly burdensome.  It seems indeed that tax reductions are no silver bullet to tackle the price of repair. Fundamentally, tax breaks only apply to citizens who have enough income to pay tax in the first place, leaving behind the people most in need of help. And ultimately, VAT reduction does not deal with the issue of the availability of cheap new products competing with repair, of which the VAT part of the price is only part of the total cost in money and time taken on by the consumer. So, whilst the EU has yet to introduce measures to ensure the affordability of repair, some member states are leading the way with initiatives aimed at ensuring their citizens can always access and afford a repair solution. Many of the schemes are still in their infancy, and so the most effective measure remains to be seen, but we support any measure to encourage the uptake of repair, and so will be monitoring the developments closely.  Interested in reading more about these initiatives? Here are some useful links: 

  Navigation    Study on socioeconomic impacts of increased reparability of increased reparability                                
                      
              
                              

Europe

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The European Union is a unique economic and political union between 27 EU countries that together cover much of the continent.

European Union 

Official website of the government of France

Government of France

Government of Sweden

EU Member States

Government of Germany

Government of Austria

Policy—such as the EU’s Right to Repair legislation—can be leveraged to make repair the new normal.

EU's Right to Repair Legislation and Member States' Initiatives to Make Repair the New Norm

Rwanda’s Circular Economy Action Plan embeds circular principles into the construction sector.