FINANCING THE CIRCULAR ECONOMY THROUGH STATE AID: A CROSS COUNTRIES ANALYSIS

Andreea-Emanuela Drăgoi ()
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Andreea-Emanuela Drăgoi: Institute for World Economy, Romanian Academy

Global Economic Observer, 2024, vol. 12, issue 2, 34-44

Abstract: The circular economy is a key development goal for the European Union (EU), in line with its broader objective of achieving climate neutrality by 2050. The circular economy is built on the 3Rs: recycle, reuse, and repair, which aim to reduce waste, promote sustainable development, enhance renewable energy, and protect the environment. While several EU initiatives support financing for the circular economy, our research focuses on how State Aid can be used to foster objectives such as renewable energy and environmental protection. The primary goal is to analyse the progress made by EU Member States during and after the COVID-19 pandemic in financing the circular economy through State Aid, highlighting key challenges and opportunities. We employ a quantitative analysis based on the latest State Aid Scoreboard, primarily using data from 2019-2022, the most recent available. The analysis includes a case study of Romania, examining its performance in granting State Aid for energy and environmental protection. Our main finding is that while State Aid related to the pandemic decreased in 2022, many Member States continue to address post-pandemic economic imbalances. There remains significant potential for boosting State Aid to support the circular economy, particularly in the areas of energy and environmental protection.

Keywords: circular economy; sustainable development; State aid; EU; Romania (search for similar items in EconPapers)
JEL-codes: H23 O38 Q57 (search for similar items in EconPapers)
Date: 2024-12
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