The European Commission has officially launched a comprehensive public consultation and call for evidence for its eagerly anticipated Circular Economy Act. This pivotal initiative marks a significant stride in the European Union’s ambitious journey towards a more sustainable, resilient, and competitive future. With feedback open until November 2025, the EU is inviting a broad spectrum of stakeholders and the public to shape a transformative piece of legislation designed to accelerate the transition to a truly circular economy across the bloc.

This move is not merely a bureaucratic formality; it underscores the EU’s deep commitment to fundamentally rethinking its economic model. In an era marked by increasing resource scarcity, geopolitical uncertainties, and urgent climate imperatives, the Circular Economy Act is poised to be a cornerstone of the EU’s strategic response, aiming to decouple economic growth from resource depletion and environmental degradation.

The Vision of a Circular Economy: Beyond Linear Consumption

At its core, the circular economy represents a radical departure from the traditional “take-make-dispose” linear model that has dominated industrial practices for centuries. Instead, it advocates for a systemic approach where resources are kept in use for as long as possible, maximum value is extracted from them while in use, and products and materials are recovered and regenerated at the end of their service life. This paradigm shift is built on three fundamental principles:

1. Design out waste and pollution: This involves rethinking product design from the very beginning to minimize waste generation and eliminate hazardous substances throughout the product lifecycle. It emphasizes durability, repairability, upgradability, and recyclability.
2. Keep products and materials in use: This principle focuses on extending the lifespan of products and components through maintenance, repair, reuse, and remanufacturing. It encourages business models based on services, sharing, and product-as-a-service, rather than outright ownership.
3. Regenerate natural systems: Beyond simply minimizing harm, a circular economy aims to actively restore and regenerate natural capital. This includes practices like regenerative agriculture, sustainable forestry, and the use of renewable energy sources.

The benefits of embracing such a model are multifaceted and far-reaching. Economically, it promises enhanced resilience by reducing the EU’s reliance on volatile global supply chains for raw materials, a vulnerability starkly highlighted by recent geopolitical tensions and disruptions. It fosters competitiveness by driving innovation, creating new markets, and reducing operational costs through efficient resource management. Environmentally, it leads to significant reductions in waste generation, greenhouse gas emissions, and pollution, directly contributing to climate change mitigation and biodiversity protection. Furthermore, the transition to a circular economy is a powerful engine for job creation, particularly in sectors like repair, recycling, remanufacturing, and green technology development. The European Commission estimates that a fully circular economy could create hundreds of thousands of new jobs across the EU.

The EU’s Ambitious Drive: Why Now?

The launch of the Circular Economy Act consultation is not an isolated event but a strategic culmination of years of policy development and a response to pressing global challenges. The EU’s motivation for accelerating this transition is rooted in several critical imperatives:

• Economic Security and Resilience: The COVID-19 pandemic and the ongoing geopolitical shifts, including the war in Ukraine, have exposed the fragility of global supply chains and the EU’s heavy dependence on external sources for critical raw materials, energy, and components. A circular economy directly addresses this vulnerability by maximizing the value of resources already within the EU’s borders, fostering local production, and reducing reliance on imports. This enhances the bloc’s strategic autonomy and economic stability.
• Enhanced Competitiveness: Far from being an environmental burden, the circular economy is increasingly recognized as a powerful driver of innovation and competitiveness. By designing more durable, repairable, and recyclable products, European industries can gain a competitive edge in global markets. New business models, such as product-as-a-service or sharing platforms, can unlock new revenue streams and foster closer customer relationships. Resource efficiency also translates into cost savings for businesses, making them more resilient to price volatility in raw material markets.
• Decarbonization Efforts: The circular economy is indispensable for achieving the EU’s ambitious climate targets, particularly the goal of becoming climate-neutral by 2050 under the overarching European Green Deal. A significant portion of greenhouse gas emissions is linked to the extraction, processing, and consumption of materials. By keeping materials in use for longer, reducing waste, and increasing recycling rates, the Circular Economy Act will directly contribute to reducing industrial emissions and the carbon footprint of products.
• Resource Scarcity and Environmental Protection: The planet’s finite resources are under immense pressure. A circular approach helps alleviate this pressure by reducing the demand for virgin materials. This, in turn, lessens the environmental impact associated with extraction, such as habitat destruction, water pollution, and energy-intensive processing.

The forthcoming Act, slated for adoption in 2026, is designed to be a cornerstone of this multifaceted strategy. It aims to solidify the EU’s leadership in sustainable practices, setting a global benchmark for how economies can thrive within planetary boundaries.

Building Blocks: Key Recommendations and Existing Legislation

The initiative to create a comprehensive Circular Economy Act is not happening in a vacuum. It builds upon a “chorus of recommendations” from influential reports and declarations, demonstrating a broad consensus on the need for decisive action. These include:

• Letta Report: Enrico Letta’s report on the future of the Single Market emphasized the need for a more integrated and resilient internal market, with circularity playing a key role in achieving resource efficiency and strategic autonomy.
• Draghi Report: Mario Draghi’s report on EU competitiveness highlighted how a transition to a circular economy can boost the EU’s industrial strength and innovation capacity.
• Antwerp Declaration: This declaration, signed by over 1,000 industrial leaders, called for a stronger European industrial policy, emphasizing the importance of a predictable regulatory framework and access to secondary raw materials to maintain competitiveness.
• Budapest Declaration: Issued by the European Council, this declaration reinforced the commitment to strengthening the Single Market and leveraging its potential for the green and digital transitions, with circularity as a key enabler.
• Competitiveness Compass and Clean Industrial Deal: These broader strategic frameworks aim to position the EU as the world leader in the circular economy by 2030 and to double its circularity rate – the proportion of materials recovered and fed back into the economy.

Furthermore, the consultation seeks to ensure the Circular Economy Act seamlessly integrates with a robust existing and recently adopted body of EU legislation. This holistic approach is crucial for creating a coherent and effective policy framework, avoiding fragmentation, and maximizing impact. Key existing legislative instruments include:

• Eco-design for Sustainable Products Regulation (ESPR): This regulation, already in force, sets out a framework for making products more durable, reusable, repairable, and energy-efficient. The Circular Economy Act will likely build upon and expand the scope of ESPR, applying eco-design principles to a wider range of products and addressing their entire lifecycle.
• Packaging and Packaging Waste Regulation (PPWR): This regulation aims to reduce packaging waste, promote reusable packaging, and ensure that all packaging is recyclable. The Circular Economy Act will reinforce these objectives by creating a stronger market for recycled content and pushing for more circular packaging solutions.
• Critical Raw Materials Act (CRMA): Given the EU’s vulnerability to supply disruptions of critical raw materials essential for green technologies (like lithium for batteries or rare earth elements for wind turbines), the CRMA aims to secure a diversified and sustainable supply. The Circular Economy Act complements this by promoting the recycling and recovery of these materials from within the EU, reducing reliance on primary extraction.
• Single Market Strategy: This overarching strategy aims to deepen and strengthen the EU’s internal market. The Circular Economy Act will contribute by fostering a level playing field for circular products and services, removing barriers to the trade of secondary raw materials, and promoting cross-border collaboration in circular value chains.
• Steel and Metals Action Plan: This plan focuses on decarbonizing and modernizing the steel and metals industries. The Circular Economy Act will support these efforts by promoting the use of recycled steel and metals, improving recycling infrastructure, and fostering innovation in low-carbon production processes.

This intricate web of interconnected policies demonstrates the EU’s strategic intent to build a comprehensive and mutually reinforcing framework for circularity, ensuring that each piece of legislation contributes to the overarching goals of sustainability, resilience, and competitiveness.

The Single Market for Secondary Raw Materials: A Game Changer

A central pillar of the upcoming Circular Economy Act is the establishment of a robust Single Market for secondary raw materials. This is a critical step towards achieving true circularity, as it directly addresses the challenge of integrating recycled materials back into the economy at scale. Currently, despite significant recycling efforts, many secondary raw materials struggle to compete with virgin materials due to issues of quality, standardization, and market acceptance.

The Act aims to overcome these hurdles by:

• Standardization and Quality Assurance: Developing common EU-wide standards and certification schemes for secondary raw materials will be crucial. This ensures that recycled materials meet specific quality criteria, building trust among manufacturers and consumers. For instance, consistent quality for recycled plastics or metals would make them more readily usable in high-value products.
• Boosting Demand: The Act is expected to introduce measures to stimulate demand for secondary raw materials. This could include mandatory recycled content targets in certain products, incentives for businesses using recycled materials, or green public procurement policies that prioritize circular products. By creating a strong market pull, the EU intends to make recycling economically more viable.
• Removing Barriers to Trade: The current fragmented regulatory landscape across member states can hinder the cross-border movement of secondary raw materials. The Act will work to harmonize regulations, simplify administrative procedures, and eliminate technical barriers to trade, ensuring that recycled materials can flow freely across the Single Market.
• Facilitating Investment in Recycling Infrastructure: To meet the increased demand for secondary raw materials, significant investment in advanced sorting, recycling, and reprocessing technologies will be necessary. The Act is likely to support such investments through various funding mechanisms and regulatory certainty.

This focus on a single market for secondary raw materials is directly linked to the concept of “urban mining” – the process of recovering valuable raw materials from discarded products and waste within urban areas. By treating waste as a resource, the EU can tap into a vast, domestic supply of materials, reducing its reliance on often geopolitically sensitive external sources. This not only enhances resource security but also creates new economic opportunities and jobs in the recycling and reprocessing industries.

Public Consultation: Shaping the Future of Circularity

The European Commission’s decision to launch a public consultation and call for evidence through its official “Have Your Say” portal is a testament to the EU’s commitment to inclusive policymaking. This extensive feedback period, running until November 6, 2025, provides a vital opportunity for all interested stakeholders to contribute their insights and perspectives.

The value of diverse input cannot be overstated. Businesses and industry associations can highlight practical challenges in implementing circular practices, identify technological gaps, and propose innovative solutions. Their feedback is crucial for ensuring the Act is pragmatic and economically viable. Environmental organizations can provide critical perspectives on the ecological benefits and potential risks, pushing for ambitious targets and robust environmental safeguards. Individual citizens and consumer groups can share their experiences with product durability, repairability, and recycling, influencing policies that directly impact their daily lives. Researchers and academics can offer evidence-based insights and cutting-edge solutions.

The insights gathered through this consultation will be instrumental in:

• Identifying Bottlenecks: Understanding the practical obstacles that hinder the transition to a circular economy, from regulatory inconsistencies to technological limitations or market failures.
• Fostering Innovation: Uncovering new ideas, technologies, and business models that can accelerate circularity.
• Ensuring Fitness for Purpose: Tailoring the Act to be effective, proportionate, and adaptable to the evolving needs of the EU economy and society.

This open and transparent consultation process is a hallmark of EU governance, allowing for a broad range of viewpoints to inform and refine the legislative proposal before its final adoption in 2026.

Challenges and Opportunities on the Path to Circularity

While the vision of a circular economy offers immense promise, its implementation is not without challenges. These include:

• Technological Barriers: Developing and scaling up advanced recycling, remanufacturing, and repair technologies requires significant investment in research and development.
• Consumer Behavior Change: Shifting consumer mindsets from a culture of disposability to one that values durability, repair, and reuse requires effective communication, education, and accessible services.
• Investment Needs: The transition to a circular economy necessitates substantial public and private investment in new infrastructure, innovative business models, and skilled labor.
• Regulatory Complexity: Harmonizing regulations across 27 member states, each with its own specific industrial landscape and waste management systems, presents a complex legislative challenge.
• Data and Traceability: Effective circularity relies on robust data on material flows, product composition, and waste streams, requiring advanced digital solutions and traceability systems.

Despite these challenges, the opportunities presented by the Circular Economy Act are immense. It is expected to:

• Create Green Jobs: Estimates suggest significant job creation in sectors like repair, recycling, remanufacturing, and sustainable design.
• Enhance Resource Independence: Reducing reliance on imported raw materials strengthens the EU’s geopolitical position and economic stability.
• Spur Innovation: The need for circular solutions will drive innovation in materials science, product design, and business models, fostering a competitive advantage.
• Improve Environmental Quality: Less waste, reduced pollution, and lower emissions will lead to a healthier environment for all European citizens.
• Unlock New Value: By keeping materials in circulation, businesses can unlock new economic value from what was previously considered waste.

Conclusion: A Defining Moment for Europe’s Sustainable Future

The launch of the public consultation for the EU’s Circular Economy Act marks a defining moment in Europe’s commitment to a sustainable and resilient future. This ambitious legislative package, slated for adoption in 2026, is designed to be a transformative force, moving the bloc away from a linear “take-make-dispose” model towards a restorative and regenerative economic system.

By prioritizing the establishment of a robust Single Market for secondary raw materials, integrating with existing green legislation, and fostering innovation across industries, the Act aims to enhance the EU’s economic security, boost its competitiveness, and significantly contribute to its decarbonization goals. The comprehensive public consultation process ensures that this landmark legislation will be shaped by a diverse range of perspectives, making it robust and fit for the complex challenges and opportunities ahead.

As the EU strives to become a global leader in the circular economy by 2030, the active participation of all stakeholders in this consultation is paramount. Their collective insights will be crucial in identifying bottlenecks, fostering groundbreaking solutions, and ultimately ensuring that the Circular Economy Act truly ushers in a new era of sustainable growth and prosperity across Europe.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

5th August, 2025