EU: Public consultation about the Circular Economy Act

 

The EU COmmission has launched a public consultation about the planned Circular Economy Act.

The Circular Economy Act (CEA) aims to strengthen the EU’s economic security and competitiveness by promoting more sustainable production methods, circular economy business models, and decarbonisation. It will support the free movement of circular products, secondary raw materials, and waste within the EU. Additionally, the Act seeks to boost the supply of high-quality recycled materials and stimulate market demand for them across the Union.

The EU currently relies heavily on imports of raw materials—including critical raw materials—while facing low resource efficiency and unaccounted environmental costs from the linear economy. To reduce this dependency, enhance competitiveness, and alleviate environmental pressures, a robust circular economy is essential. However, progress has been slow: the EU’s circularity rate has barely improved over the past 15 years, increasing only from 10.7% in 2010 to 11.8% in 2023. The market for secondary raw materials remains weak or imbalanced in both volume and quality. Their uptake is hindered by economic and regulatory barriers: secondary materials are often more expensive and of lower quality than primary ones, making them uncompetitive without targeted incentives, enabling legislation, and strong enforcement mechanisms.

Furthermore, the internal market for secondary raw materials and waste is fragmented, burdening businesses and limiting the development of circular supply chains and economies of scale. The CEA is designed to address the root causes of the EU’s slow transition to circularity, which include:

1. Regulatory fragmentation – Inconsistent interpretation and implementation of EU rules by Member States increases costs and hampers the creation of a single market for waste and recycled materials.
2. Uncompetitive pricing – Prices for secondary raw materials do not reflect their lower environmental impact.
3. Information and behavioural barriers – Both consumers and sellers face a lack of reliable information, market biases, transition costs, and risks of fraud.
4. Material loss and leakage – Inadequate tracking and mismanagement of waste streams, including critical raw materials, result in landfilling, incineration, or illegal exports of valuable materials.

By addressing legal uncertainty and dismantling single market barriers, the CEA seeks to streamline rules, reduce administrative burdens, and foster a more unified and efficient system.

The current policy landscape requires EU-level intervention to address market fragmentation, strengthen the circular economy business case, and remove cross-border barriers. National measures alone are insufficient, and in some cases, inconsistent approaches at the Member State level further exacerbate the problem. Coordinated EU action is essential to create a level playing field, unlock economies of scale, and ensure regulatory clarity. Without such action, the EU risks stagnation, weakened recycling industries, and increased dependence on non-EU producers—jeopardising its green, digital, defence, and economic security goals.

The CEA’s objective is to advance circularity within the single market. While existing legislation—such as the Waste Framework Directive, Ecodesign for Sustainable Products Regulation, and Packaging and Packaging Waste Regulation—has laid the groundwork, their full potential cannot be realised unless key barriers are addressed and the supply of high-quality, cost-effective secondary materials improves.

The CEA will pursue both supply- and demand-side measures, supported by regulatory simplification and reduced administrative complexity. Its interventions are organised around two main pillars:

1. Addressing electronic waste (e-waste): E-waste is the fastest-growing waste stream in the EU, increasing by 2% annually, with less than 40% currently being recycled. The CEA will seek to improve collection and recycling systems and create market demand for secondary critical raw materials recovered from e-waste. This may include revisions to existing legislation to enhance its effectiveness and simplify compliance.
2. Strengthening the single market for secondary raw materials and waste: This will involve a package of measures such as reforming “end-of-waste” criteria, simplifying and digitalising extended producer responsibility (EPR) schemes, and establishing mandatory, targeted criteria for green public procurement to stimulate demand for circular goods, services, and infrastructure within the EU.

Together, these measures aim to accelerate the EU’s transition to a circular economy, make better use of available resources, and support the broader goals of sustainability, competitiveness, and strategic autonomy.