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The circular economy’s strategy is among the most vital priorities in the European integration process, which includes the EU-wide economic security, competitiveness and sustainability. Being the integral part of the European socio-economic and political guidance, the circular economy (CE) is closely connected to sustainability and resource management. The article underlines main aspects in the twin EU’s strategies, both towards CE and the optimal use of existing resources.
Background
Basic CE directions in Europe are contributing to the EU-wide efforts in developing a sustainable, low carbon, resource efficient and competitive member states’ economies, including the transition to such means of production where materials and resources are maintained as long as possible, and the generation of waste is minimized. Such transition is the opportunity to transform the member states’ economy and generate new and sustainable competitive advantages for whole European Union according to the EU’s priorities. Thus, a new plan for Europe’s sustainable prosperity and competitiveness include “making business easier to foster economic growth, supporting EU’s competitive industries and creating quality jobs, developing a circular and resilient economy that puts research and innovation at its heart and accelerates investment, tackling the skills and labour gaps and leading the way in digital technology innovation”.
Citation from the Commission priorities for 2024-2029, in: https://european-union.europa.eu/priorities-and-actions/eu-priorities/european-union-priorities-2024-2029_en
New development parameters in the Commission’s priorities stress efficient innovation in the European single market, cutting off toxic external dependencies and at the same time reducing climate emissions and nature footprints. To realize the CE’s potential, the new Commissioner for Environment, Water Resilience and a Competitive Circular Economy, Jessika Roswall has been tasked to elaborate a specific CE law to create market demand for secondary materials and establish a European “single market” for waste.
Additionally in: https://www.integrin.dk/2024/12/02/new-european-commissions-college-competences-and-roles-for-next-five-years-part-ii/
European circular economy: strategy and policy-making
Circular economy (CE) has been for long regarded as a vital component of the EU-wide economic security, competitiveness and sustainability. The CE in European political guidance occupies an important place in national political economies, combining such vital sectors as sustainability and resource management. Optimal CE solutions are needed also to safeguard biodiversity, solve the climate crisis, as well as creating a fair transition towards societies in which the values of production are maintained through smarter designs and co-sharing natural resources with due consequences for climate equilibrium and sustainability.
Besides, CE can contribute to lower input-based imports towards greater regionalization of supply chains: i.e. policies supporting circular economy can change relative prices between imported and recycled inputs to promote new circular economy industrial segments until scale economies are achieved.
The EU-wide CE’s approaches include boosting sustainable products, empowering consumers for the green transition, as well as reviewing regulations and strategies on such vital issues as construction. sustainable textiles, renewables and waste management, to name a few.
In March 2020, the Commission suggested a new “Circular economy action plan for cleaner and more competitive Europe”, which noted that about 50% of total greenhouse gas emissions, more than 90% of biodiversity loss and fresh-water deficiencies come from resource extraction and processing. Following the European Green Deal launched in 2019, this plan formulated a concerted strategy for a climate-neutral, resource-efficient and competitive economy.
Thus, the plan notes that from front-runners to the mainstream economic players the CE “will make a decisive contribution to achieving climate neutrality by 2050 and decoupling economic growth from resource use, while ensuring the long-term competitiveness of the EU and leaving no one behind”.
Source and citation from: https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN
More on focal CE’s issues in our publication: https://www.integrin.dk/2024/10/23/circular-economy-towards-effective-national-guidance-and-management/
During last decade, the EU has made very little progress in transition to a circular economy: up to 2021, the average circularity rate in EU-27 increased by only 0.4 percentage points: i.e. seven member states (Lithuania, Sweden, Romania, Denmark, Luxembourg, Finland and Poland) even regressed during that time. However, two latest EU actions plans and €10 billion were aimed at preserving the value of products and resources for as long as possible while minimizing waste. The first, in 2015, contained 54 specific actions; the second, issued in 2020, added 35 new actions and set the target of doubling the member states’ “circularity rate” by 2030, i.e. the proportion of material recycled and fed back into the states’ economies.
It has to be mentioned that these plans were not compulsory, although they were designed to support member states in increasing CE’s activities: by mid-2022, nearly all EU countries had a national circular-economy strategy or were in the process of developing one.
Source: https://www.eca.europa.eu/en/news/NEWS-SR-2023-17.
The EU Court of Auditors concluded in mid-2023 that the EU’s ambition of doubling its share of material recycled and fed back into the economy by 2030 “looked very challenging”. Hence, the basic four “Rs” in circular economy’s paradigm – reduce, reuse, recycle and recover – are still valid, but very slowly implemented.
More in Euromonitor at: https://www.eumonitor.eu/9353000/1/j9vvik7m1c3gyxp/vjzphjqzh2te
Since the first decade of this century, the EU has taken several initiatives to streamline the circularity concept into the member states’ policy developments across different areas (mainly in waste management). The European circularity approach embodied in action plans, involves two stages in its evolution: first plan in 2015 and the second one in 2020. Both represent a comprehensive body of legislative and non-legislative actions aimed to “transition the European economy from a linear to a circular model”.
The first circular economy action plan (CEAP-2015) proposed actions (called “closing the loop”) aimed at making the transition to “stronger circular economy where resources are used in a more sustainable way”; i.e. thus, the product lifecycles would go through greater recycling and re-use while bring benefits for both the environment and the economy. This initial CEAP intended to extract the maximum value and use from all raw materials, products and waste, fostering energy savings and reducing GHG emissions. The action plan covered the full lifecycle: from production and consumption to waste management and the market for secondary raw materials. This transition was supported by ESIF funding with €650 million from Horizon 2020 (the then EU funding for research and innovation), €5.5 billion from structural funds for waste management, cope with investments in the circular economy at the member states’ level.
Reference to: https://ec.europa.eu/commission/presscorner/detail/en/ip_15_6203
The CEAP-2015 included 54 actions and four legislative drafts on waste management in order to eliminate waste and associated pollution, as well as “circulate products and materials” (at their highest value) and consequently regenerate nature. Generally, the CEAP was designed as “an economic system that delivers better outcomes for people and the environment”.
Source: https://environment.ec.europa.eu/topics/circular-economy/first-circular-economy-action-plan_en
The second (and so far the latest) EU circularity’s action plan was adopted in March 2020 (so-called CEAP-2020) as one of the main building blocks of the European Green Deal (as the EU-wide agenda for sustainable growth), with the following aims: making sustainable products the norm in the EU member states; empowering consumers, public and private sectors focusing on using less resources as well as increasing potential for circularity(the following sectors were mentioned: electronics and ICT, batteries and vehicles, packaging, plastics, textiles, construction and buildings, food, water and nutrients), ensuring less waste in all production and manufacturing sectors, making circularity work for people, regions and cities; and leading global efforts on circular economy. Source: https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en
The second CEAP followed the fulfillment at that time all the “actions” envisaged in the previous CEAP-2015; it was based on the European Green Deal (presented at the end of 2019) following international “evolution measures” in climate change and sustainability, such as the Paris Climate Accord and SDGs in late 2015. Facing new challenges, the deal was aimed at transforming the member states’ political economy towards modern, resource-efficient and competitive economies, ensuring that: a) zero-GHG emissions by 2050, b) economic growth decoupled from resource use, and c) inclusive socio-economic policies prevail (i.e. “no person and no place is left behind”). More on “green deal” in: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en
The CEAP-2020 promotes the circularity’s initiatives along the entire life cycle of products: it targeted the ways the products were designed, promoting circular economy processes and encouraging sustainable consumption, as well as ensuring that the wastes are prevented and the resources used and kept in the economy for as long as possible. However, the legislative draft noted that “transition to the circular economy should be systemic, deep and transformative; “it could be also disruptive at times, so it has to be fair”. Hence the action plan required an “alignment and cooperation of all stakeholders at all levels”, i.e. the EU, national, regional, local and international. Source and citation from the legislative draft on “new Circular Economy Action Plan For a cleaner and more competitive Europe” in: https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN
The European Investment Bank supports the transition to a circular economy with three mutually reinforcing activities: finance, advisory support and awareness-raising. During 2019-2023, the EIB provided €3.83 billion to co-finance 132 circular economy projects (out of over 150 in CEAP-2020) in a variety of sectors. Besides, one third of the €1.8 trillion investments from the NextGenerationEU Recovery Plan, and the EU’s seven-year budget will finance the green deal.
Resource management in Europe
Resource management (RM) in the EU focuses on ensuring the sustainable use of natural resources like water, energy, and raw materials, while also promoting the circular economy and reducing environmental impact. This involves a variety of activities, including promoting renewable energy, improving energy efficiency, recovering materials, and managing water and forest resources. The EU’s goal is to transition to a circular economy by 2050, where resources are kept in use for as long as possible, and waste is minimized.
There are that following key aspects in the EU’ RM: – Circular Economy Action Plan (the plan sets targets for reducing resource consumption and increasing the use of recycled materials); – Sustainable Resource Management (the EU aims to develop and implement sustainable resource management practices to minimize environmental impact and ensure resource availability for future generations). More in the White Paper on Sustainable Resource Management in the EU (2024) in: https://eeb.org/library/white-paper-on-sustainable-resource-management-in-the-eu/
Besides, the are also such aspects in RM as: -Renewable Energy (the EU is actively promoting the production of energy from renewable sources like solar, wind, and hydro power; – Energy Efficiency (the measures include actions to improve energy efficiency in buildings, industry and transportation in order to reduce resource consumption and emissions); – Material Recovery (the EU encourages the recovery and reuse of materials from waste streams to reduce the need for extracting virgin resources; – Water and Forest Management (sustainable management of water resources and forests is essential for maintaining biodiversity and ensuring resource availability); – Reducing Resource Consumption (the intends to reduce overall resource consumption in key sectors like transport, construction and digital industries); – Supporting Innovation (the EU encourages innovation in resource management, including developing new technologies and business models for a more sustainable economy.
However, some challenges shall be kept in mind: e.g. – over-consumption (the EU faces the challenge of reducing current and projected increases in resource consumption); – resource depletion (the EU needs to address the issue of resource depletion and ensure sustainable access to resources); – environmental degradation (the EU would like to reduce pollution and environmental degradation caused by resource extraction and processing; – social justice (the EU is also addressing social and economic impacts of resource management, ensuring that the benefits of sustainable practices are shared equitably; and – global cooperation (the EU is cooperating with other countries to address global challenges related to resource management and climate change).
The EU is one of the largest consumers of resources in the world, using between 70% and 97% of the ‘safe operating space’ available for the whole world, while having only about 6% of global population. To meet its environmental goals and to achieve the EU’s objectives of “living well within planetary boundaries”, it is urgent that the EU is addressing its unsustainable consumption of resources. The general opinion is that the EU’s unsustainable utilization of natural resources and materials is a fundamental driver of regional ecological crises. Hence, according to the legal opinion commissioned by BUND (2023), “the time has come for EU legislation on sustainable resource management”. The study analyzed current EU legislation regarding resource consumption and concluded that “there is a gap in current legislation as ordinary law does not set a binding objective of resource protection and sustainable resource use provisions”. Hence, the study notes that additional efforts are needed towards sustainable resource management.
“Sustainable Brands” research concluded that “more than 10,000 people in 29 high-income and middle-income countries found that 70% believe that “overconsumption is putting our planet and society at risk” and 65% believe that “our society would be better off if people shared more and owned less.” Citation from: https://sustainablebrands.com/read/havas-smarter-consumers-will-significantly-alter-economic-models-and-the-role-of-brands.
Besides, resource extraction and processing are at the root of the greatest modern “generational crises”, including global warming, biodiversity loss, water stress, pollution and social injustices. Thus, the following are recognized negative effects caused by resource extraction and processing: about 90% of global biodiversity loss and water stress, 50% of global greenhouse gas emissions, as well as over 30% of air pollution’s health impacts.
Reference: https://eeb.org/wp-content/uploads/2024/02/Sustainable-Resource-Use.pdf
Thus, one of the main RM challenges is still the issue of extraction and use of primary materials, which is expected to increase globally, from 89 gigatonnes (2017 data) to a staggering 167 gigatonnes by 2060. The EU’s material footprint – the total amount of fossil fuels, biomass, metals and minerals it consumes, including embodied in imports – currently stands at an alarming 14.8 tones per capita annually, more than double the threshold deemed sustainable and just; this trend is set to keep rising unless some decisive action is taken.
Info-source based on research described in O’Neill, D.W., Fanning, A.L., Lamb, W.F. et al. “A good life for all within planetary boundaries”. – Nat Sustain 1, 88–95 (2018). In: https://doi.org/10.1038/s41893-018-0021-4
Recent EU actions and initiatives
The EU’s CE and resource management is heavily relying on regulations: the Commission seems to be confusing “cutting red tape” with cutting corners, persisting with the roll out of the so-called omnibus packages to “simplify” the EU environmental law; the process better known as deregulation. Meanwhile, the EU Biodiversity Strategy is still struggling to get fully through, and the environmental ambition is still looking better.
The Commission is preparing to propose a legally binding target to cut the EU’s greenhouse gas emissions by 90% by 2040, compared to 1990 levels. The Commission Executive Vice-President for a Clean, Just and Competitive Transition, Teresa Ribera, outlines the need for a “pragmatic approach” to the climate target but warns against watering down the goal “too much”. She also expresses concern over declining political will and growing populist resistance to climate actions. She notes a troubling silence around climate issues in the media and politics, alongside increasing attacks on scientists and NGOs promoting environmental policies. Backsliding or diluting commitments due to political convenience could also undermine the EU’s credibility as a global climate leader.
The latest assessment of the EU Biodiversity Strategy paints a sorry picture (while going in the right direction): the strategy outlines the current status, monitoring plans and progress toward the 2030 goals. However, it warns that none of the evaluated biodiversity targets are on track to be met at the current pace: e.g. particularly lagging are agricultural targets, like reducing soil nutrient losses and fertilizer usage. With faster action, many targets could potentially be reached, but time is running short. As soon as biodiversity is presently world-wide best defence against climate change (because diverse ecosystems are more resilient), the process absorbs more carbon and adapt better to environmental changes.
The European Circular Economy Stakeholder Platform (ECESP), powered by the European Commission and the European Economic and Social Committee, for the seventh time organized in 2024 an annual conference to discuss the EU-wide progress in CE. Source: https://circulareconomy.europa.eu/platform/en/ecesp-annual-conference-2024-circular-economy-visions-actions
In April 2025, the EU Ombudsman opened a formal inquiry into the Commission’s omnibus proposal to roll back key EU sustainability laws, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation. A complaint by eight NGOs points out that the Commission failed to carry out proper impact checks and skipped public consultation, in breach of its own Better Regulation Guidelines, making it impossible for Council and Parliament lawmakers to be “fully informed” about the consequences of their decisions.
Reference to NGOs formal complaint in: https://www.clientearth.org/latest/press-office/press-releases/ngos-challenge-european-commission-s-undemocratic-omnibus-process/?mc_cid=90dd52f30a&mc_eid=97603c39a6