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Knowledge category: Tools and methods

The decarbonisation benefits of sectoral circular economy actions

Updated on 12.02.2024

This methodology integrates results from lifecycle analysis (LCA) and material flow modelling to develop a generic methodology for conducting ex ante quantifications of the CO2 emission reduction potential of circular economy (CE) actions (Part 1 of the report).

Author: Ramboll, Fraunhofer, Ecologic Institute
Year of update: 2020

More information

The methodology is composed of six iterative steps, applicable to any sector. The reader can use the report to go through the steps and learn about each of them in detail and to get insights into how each step can be accomplished in practice. The steps of the methodology are briefly summarised here:

  • Step 1 consists of a scoping of the sector to be analysed as well as the main materials and products relevant to this sector.
  • Step 2 defines and categorises CE actions according to their contributions to either material efficiency, to substituting higher- with lower-impact materials, or to recirculating materials or products (recycling and reusing).
  • Step 3 then assesses the impact of the short-listed CE actions on material demand and relevant emission sources.
  • Step 4 focuses on the quantification of CE actions' impact on GHG emissions along the value chain.
  • Step 5 combines the effects of all CE actions at EU- and sector-level using a scenario approach.
  • Step 6 further describes GHG emission reductions and increases by allocating them to UNFCCC common reporting format (CRF) categories as well as to ETS and non-ETS categories.

Relevance for Circular Systemic Solutions

This methodology provides an approach on how to select and assess CE actions and their impact on the mitigation of climate change. The methodology comprises six iterative steps applicable to any sector, which cover issues of scoping, data collection and analysis, and identifying and addressing possible limitations. The building sector has been analysed and used as an example for how such an analysis can look like in real life. By applying this methodology, cities and regions can learn how to select and assess CE actions and their impact on the mitigation of climate change. Cities and regions can apply this methodology to any sector and could also consider applying it when assessing the impact of a Circular Systemic Solution or its specific components on CO2 emission reduction potential.

How to use this tool or method

This methodology is designed to be applicable to a broad range of economic sectors. The present study then tests this approach on the buildings sector, quantifying CO2 emission reduction potentials from a selection of CE actions (Part 2). Finally, it reports on the lessons learned from implementing the methodology and sketches out its potential application to other sectors, namely textiles, plastics and electronics (Part 3).

Social aspects
Territories involved

large 500 000-200 000, medium 200 000-50 000, and small cities 50 000-5 000

large metropolitan area >1.5 million, metropolitan area 1.5 million-500 000

predominantly urban regions, intermediate and predominantly rural regions, refer to TERCET typology NUTS 3 region