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enel.com"CIRCULAR EUROPE" STUDY BY ENEL AND THE EUROPEAN HOUSE –AMBROSETTI. FOR THE FIRST TIME THE STATE OF THE ART OFCIRCULAR ECONOMY IN EUROPEAN COUNTRIES HAS BEEN MEASURED:THE TRANSITION TO A CIRCULAR ECONOMY WILL BRING ECONOMIC,SOCIAL AND ENVIRONMENTAL BENEFITS THROUGHOUT EUROPE• The study analyses the state of the art of Circular Economy in Europe (27 EU countries and theUnited Kingdom) using an innovative analysis model, the Circular Economy Scoreboard, whichconsiders all the macro-dimensions of the phenomenon: use of sustainable inputs, end of life, theextension of the useful life of products/services, and an increase in the intensity of use•

The study assesses the economic, social, and environmental benefits involved in the transition to acircular development model in the EU as well as in Italy, Romania, and Spain. In the EU, Circular
Economy is linked to 300-380 billion euros of GDP, 90-110 billion euros of investments, and up to2.5 million jobs in 2018

•Circular Economy generates major environmental benefits, arising from the use of renewableenergy and materials or from re-use and recycling, a circular design from an early stage, andtargeting future life cycles, the extension of useful life, and the increase in the intensity of the useof goods and products

Cernobbio, September 5th, 2020 – Positive impacts on GDP, employment, investments, labor productivity
and several environmental benefits. If there is a project capable of developing a positive and long-term
vision for the future of the EU, it is undoubtedly that of Circular Economy. This is the outcome of the study"Circular Europe: How to successfully manage the transition from a linear to a circular world",
carried out by Enel Foundation and The European House – Ambrosetti, together with Enel and Enel X
presented today, at the Forum of The European House – Ambrosetti, at a press conference attended byValerio De Molli, Managing Partner & CEO of The European House – Ambrosetti, Francesco Starace,
CEO and General Manager of Enel and Francesco Venturini, CEO of Enel X.
"Aiming at the development of a Circular Economy is an extraordinary opportunity to make Europe morecompetitive, modernizing its economy, revitalizing its industry and creating jobs through sustainable andlasting growth," commented Francesco Starace, CEO and General Manager of Enel. "In this context, theincreasing penetration of renewable sources, together with the increased use of electricity as an energy
carrier for end-user consumption, can boost the opportunities arising from Circular Economy and is themost efficient way to decarbonize the economy and the society we live in."1

"The world is facing huge challenges. Profound and swift economic, climate, and technological changes aretaking place and are shaping our societies and lifestyles. The time for Europe has come. Circular Economy
has what it takes to become a "catalyst for the common good", around which we can develop a broad vision
for the European future," said Valerio De Molli, Managing Partner & CEO of The European House –Ambrosetti. "The innovative Circular Economy Scoreboard developed by Enel Foundation and The
European House – Ambrosetti, together with Enel and Enel X, reveals a very diverse situation at theEuropean level. Italy and Spain have a medium-high level of development: Italy excels in end-of-life, ranks
well in the use of sustainable inputs and extension of the useful life of products, while it must strive toincrease the intensity of use of products and services. Spain, on the other hand, has a good ranking for theuse of sustainable inputs, end-of-life, and increase of the intensity of use, while it has a medium-low
positioning in the extension of the useful life of products and services. Romania is instead facing asubstantial growth path on all four pillars.""The large-scale adoption of Circular Economy requires a coordinated effort, aimed at re-imagining and reconfiguring, in a circular perspective, many if not all production schemes and business models. This is also
occurring through the redesign and proposal of a new model of the energy system, gradually abandoning
fossil fuels in favor of renewables and electricity as a carrier for the complete decarbonization of all sectors,"
said Francesco Venturini, CEO of Enel X. "The lack of clarity on what it means to be circular and,
consequently, the absence of adequate instruments to measure and monitor Circular Economy were two of
the main obstacles to the circular transition. This study enables us to move towards a clear vision andstrategy, with measurable goals, tools that Europe and all companies need in order to be at the core not
only of the energy transition but also of the transition from a linear to a circular development model".
The recent European Green Deal and the related Circular Economy Action Plan, adopted in March 2020 by
the European Commission, set new and more ambitious goals for Europe concerning the transition toCircular Economy models. However, across EU countries, Circular Economy development is far fromuniform. To date, many European countries (including Italy) do not yet have a national strategic roadmap
that recognizes Circular Economy as a crucial factor.
Therefore, assessing the state of the art of Circular Economy in Europe is one of the main objectives of thisstudy, conducted by Enel Foundation and The European House – Ambrosetti jointly with Enel andEnel X. The study develops a Circular Economy Scoreboard that uses a multi-level approach to provide acomprehensive view of the degree of circularity in each country. It contains 23 comparable quantitative
metrics and 10 main indicators for the 27 EU countries and the United Kingdom, paying particularattention to the study's three focus countries: Italy, Romania, and Spain.
The study reveals that, to date, the EU shows mixed results in terms of transition to Circular Economy: Italyand Spain show a medium-high level of development, while Romania is at the bottom of the ranking.
To measure performance over time, the Circular Economy Scoreboard analyzed a 5-year period. Romania
improved significantly over the last five years, Spain made intermediate progress, while Italy moved
more slowly along its transition to a circular model.
The analysis of the "degree of circularity" of the 27 EU countries and the United Kingdom wascomplemented by a survey that asked 300 European business leaders about the need to take action
towards circular models within their companies. Of the respondents, 95% consider Circular Economy astrategic choice for their company: it is above all a tool to gain a competitive advantage in terms ofdiversification, market expansion, and cost reduction. However, most European business leaders believethat their country is not ready to face the Circular Economy challenge; uncertainty about value creation(43.6% of the responses) and lack of skills (35.9%) are the two most frequent replies when asked about thefactors hindering Circular Economy development in Europe.

2Given the crucial role of Circular Economy in the current political debate at both the European and nationallevels, the study was supplemented by a quantitative evaluation of the socio-economic and environmental
benefits of Circular Economy. An innovative and unique econometric model was developed, focusing on theEU and the United Kingdom as a whole and on the study's three focus countries: Italy, Romania, and Spain.
The study shows how, in 2018, Circular Economy is related to 300-380 billion euros of GDP in Europe,
27–29 billion euros in Italy, 10–12 billion euros in Romania, and 33–35 billion euros in Spain. At thesame time, Circular Economy is linked to about 200,000 jobs in Italy, 20,000 in Romania, 350,000 in
Spain, and up to 2.5 million in Europe also in 2018. The study also evaluates an investment effect of 8–9billion euros in Italy, 1–2 billion euros in Romania, 9–11 billion euros in Spain, and an overall impact of
90–110 billion euros in the EU as a whole, in 2018. It also estimates significant benefits in terms of laborproductivity: about 560–590 euros per employee per year in Italy, 1,210–1,270 euros per employee inRomania (the country with the greatest impact), 640–670 euros per employee in Spain, and 570–940 euros
per employee overall at the European level.
Through specific case studies and "what if" analyses, the study points out that, in addition to being
advantageous in economic terms, Circular Economy also brings important environmental returns. Amongthe various positive effects, it shows that the transition from primary to secondary materials enables asignificant reduction in greenhouse gas (GHG) emissions: considering four materials (iron, aluminum, zinc,and lead), the average reduction of GHG emissions per kg of material produced is 73.5%. In addition, anincrease in the penetration of renewable sources in energy production by one percentage point reduces
GHG emissions by up to 72.6 million tonnes of CO2 equivalent in Europe and 6.3 in Italy (about 50% of
the annual GHG emissions in the Municipality of Rome).
Although the assessment model proposed by the study shows that the transition to Circular Economy offersseveral economic, social, and environmental benefits, the transition from the linear to the circulardevelopment model must take into account certain critical issues. In this perspective, the Report suggests
10 areas of intervention, with specific policy actions, in order to address the challenges related to thecircular transition and to reap its benefits effectively: define national strategies for a circular economic
development for EU Member States; redefine the governance of Circular Economy to support acomprehensive transition across all sectors; leverage on legislation to promote the circular transition; createcompetitive conditions with respect to non-circular solutions; use finance as a lever to promote Researchand Development and good Circular Economy practices; address the lack of a clear definition andconsistent and comprehensive metrics; transform waste-generating business models into circular models;promote cross-cutting and coordinating measures for all sectors affected by the transition to a Circular
Economy; leverage on Circular Economy to reshape cities and urban spaces; promote culture andawareness about the benefits of Circular Economy.

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