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Circular economy

Circular economy

In a circular economy, the value of products and materials is maintained for as long as possible. Waste and resource use are minimised, and when a product reaches the end of its life, it is used again to create further value. This can bring major economic benefits, contributing to innovation, growth and job creation.

In the spotlight

15 May 2019

  • The Commission publishes report on recovery of critical and other raw materials from mining waste and landfills

12 March 2019

4 March 2019

A circular economy encourages sustainability and competitiveness in the long term. It can also help to:

  • preserve resources – including some which are increasingly scarce, or subject to price fluctuation
  • save costs for European industries
  • unlock new business opportunities
  • build a new generation of innovative, resource-efficient European businessesmaking and exporting clean products and services around the globe
  • create local low and high‐skilled jobs
  • create opportunities for social integration and cohesion

Action at EU level can drive investment, create a level playing field, and remove obstacles stemming from European legislation or its inadequate enforcement.

On 2 December 2015, the European Commission put forward a package to support the EU's transition to a circular economy. On 4 March 2019, the Commission reported on the complete execution of the action plan. All 54 actions included in the 2015 plan have now been delivered or are being implemented. This will contribute to boost Europe's competitiveness, modernise its economy and industry to create jobs, protect the environment and generate sustainable growth.

Areas of action

The EU Action Plan for the Circular Economy outlines a set of both general and material-specific actions. While some obstacles to a circular economy are generic, different sectors and materials face specific challenges due to the particularities of the value chain.

The Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs cooperates with other Commission departments on the following actions.

General measures

Product design

Better product design is key to facilitating recycling and helping to make products that are easier to repair or more durable, thus saving precious resources. At the same time, current market signals are not always sufficient to make this happen, meaning incentives are needed. Additionally, the Commission has proposed an improved labelling system for the energy consumption of household appliances to help consumers to choose the best performing products.

The Commission:

  • will support repairability, durability, and recyclability of products in product requirements under the Ecodesign Directive, taking into account specific requirements of different products. The Ecodesign working plan 2015–2017 will identify product groups that will be examined to propose possible eco-design and/or energy labelling requirements. It will set out how ecodesign can contribute to the objectives of the circular economy. As a first step, the Commission will propose requirements for electronic displays, including requirements related to material efficiency.
  • has proposed the differentiation of financial contributions paid by producers under the Extended Producer Responsibility scheme on the basis of the end-of-life management costs of their products. This provision under the revised legislative proposal on waste creates economic incentives for the design of products that can be more easily recycled or reused.
  • will examine options and actions for a more coherent policy framework for the different strands of work on EU product policy in their contribution to the circular economy.

More on ecodesign

Production process

Production processes can be improved to use resources more efficiently and to produce less waste, increasing the competitiveness of European industry. Practices such as industrial symbiosis (where the waste or by-products of one industry become the inputs for another one) or remanufacturing should be encouraged. This can create business opportunities and boost innovation while preserving our environment. The measures will be introduced at a pace that gives industry time to adapt and exploit the opportunities.

The Commission:

  • will include further guidance on best waste management and resource efficiency practices for industrial sectors in Best Available Techniques Reference documents (BREFs) as part of planned reviews.
  • issued Guidance on best practices in extractive waste management plans to promote prevention, recovery and safe disposal (see 'In the Spotlight' above).
  • has proposed to clarify rules on by-products in the Waste Framework Directive to facilitate industrial symbiosis and create a level playing field across the EU. The Commission already supports industrial symbiosis (executive summary) and remanufacturing projects through Horizon 2020.


The choices made by millions of consumers can support or hamper the circular economy. These choices are shaped by

  • the information that consumers have access to
  • the range and prices of existing products
  • the regulatory framework

Actions on clear and reliable labelling, improving reparability, upgradeability and durability of products are important in this context. Leveraging public purchasing power through green public procurement can be an especially important tool to boost the circular economy.

Innovative forms of consumption may be an area where new business opportunities will emerge in the course of the transition to the circular economy, e.g. sharing products or infrastructure (collaborative economy), servitisation and the increased use of digital platforms. These new forms of consumption are often developed by businesses or citizens, and promoted at national, regional and local level. The Commission supports these new business and consumption models through Horizon 2020 and through Cohesion Policy funding. As announced in the Single Market Strategy, the Commission will also develop a European agenda for the collaborative economy.

Single market strategy

From waste to resources (secondary raw materials)

Secondary raw materials still account for only a small proportion of materials used in the EU (around 10 % in total). There are important barriers to their uptake in the economy, for example due to inadequate collection systems or the uncertainty of their sources, composition, quantity and quality. We need a better insight into raw materials stocks and flows in the EU. In many cases it is too administratively complicated to transport waste from one EU country to another. Clear end-of-waste rules and/or standards may be needed to build trust and to enable secondary raw materials to benefit from the internal market.

For example, nutrients from organic waste (food waste, used water and manure) can be returned to the soil as organic fertilisers, reducing the need for mineral-based fertilisers. The circulation of these fertilisers is hampered by differing rules and quality standards across EU countries (see below).

Many chemicals have hazardous properties and EU legislation already has instruments to manage their risks. However, as more information becomes available as a consequence of scientific progress, previously unclassified substances may be designated as hazardous or have their current classification modified. A balance has to be struck between legislation which enables the recovery of materials from waste that may contain toxic constituents and the need to ensure that hazardous chemicals of concern are properly managed.

The Commission

  • has launched work to develop quality standards for secondary raw materials where needed – in particular for plastics
  • is taking measures to facilitate legal transport of waste between EU countries while taking further measures to bring down the number of illegal shipments
  • has developed analysis and proposed options on the interface between chemicals, products and waste legislation, including on how to improve the tracking of chemicals of concern in products. This will help industry secure a stable supply of raw materials by using recycled materials
  • has further developed the EU raw materials information system and is supporting EU-wide research on raw materials flows
  • will further analyse the main obstacles to the establishment and proper functioning of EU-wide secondary material markets

See also: Raw materials and turning recycled raw materials into business opportunities 

Innovation, investment and other cross-cutting issues

Research and innovation are key to enabling the transition to a circular economy and to boost the competitiveness of EU industry.

Public and private investments are necessary to make it happen. Horizon 2020, COSME, the Structural and Investment Funds, the Fund for Strategic Investments and other EU programmes are important support instruments at the EU level. SMEs, including social enterprises, are particularly active in fields such as recycling, repair and innovation. They play an important role in the development of a more circular economy.

The Commission

  • is helping SMEs benefit from the business opportunities of increased resource efficiency with the creation of the European Resource Efficiency Excellence Centre
  • the Horizon 2020 work programme for 2018-2020 includes a major initiative on 'Connecting economic and environmental gains' focused on the circular economy with funding of €941 million
  • together with the EIB, and the European Investment Advisory Hub, has encouraged applications for funding and supported the development of projects relevant to the circular economy
  • has established a monitoring framework that will help to track progress in the transition to the circular economy at EU and national level, based on ten indicators covering all the above-mentioned phases and aspects.

The green action plan for SMEs adopted in July 2014 was designed to complement the circular economy package.

Actions for specific materials and sectors

A number of materials and sectors face specific challenges in the context of the circular economy. These challenges need to be addressed in a targeted way.


Plastic is a key enabling material in many industrial and consumer applications thanks to an innovative EU plastics industry. The benefits plastics bring to our society and economy are undeniable. However, the value of plastics is lost due to an inadequate and insufficient plastic waste management (less than 30% of plastic waste generated is recycled). Littering and leakage in the environment are also causing negative impacts on land and sea life.

The transition to more circular plastics and plastics value chain is an opportunity for the EU society and economy. This is the new vision set in the plastics strategy in line with its industrial policy strategy and also providing a tangible contribution to the implementation of the 2030 sustainable development goals and the Paris agreement.   

Pledging Campaign

The EU plastics strategy sets a list of actions to be taken at different levels (local, national, European and international) that will improve the economics and quality of plastic recycling, increase the trust in recycled plastics and boost the market, curb plastic waste and litter and drive investments and innovation.

Following annex III to the plastics strategy, the Commission also launched an EU-wide pledging campaign to boost the uptake of recycled plastics. Both industry and public authorities are invited to submit their pledge by filling in this template by 30 September 2018.

See the guidance

After filling in the template on the EU survey platform, it is compulsory to notify the Commission by sending an email to

Read more on the European plastics strategy.

Food value chain

An estimated 100 million tonnes of food is wasted annually in the EU. Food is lost or wasted along the whole food supply chain: on the farm, in processing and manufacture, in shops, in restaurants and canteens, and in the home.

Apart from the related economic and environmental impacts, food waste also has an important social angle – donation of surplus food should be facilitated so that safe, edible food can reach those who need it most.

In September 2015, the United Nations General Assembly adopted Sustainable Development Goals for 2030. These included a target to halve per capita food waste at retail and consumer levels, and to reduce food losses along production and supply chains. The EU is committed to meeting this goal. The legislative proposal for waste framework directive presented in December 2015 calls on EU countries to:

  • reduce food waste at each stage of the food supply chain
  • monitor food waste levels and share progress with other participants

The Commission:

  • is developing a common EU methodology to measure food waste and define relevant indicators
  • has created a platform bringing together EU countries and all stakeholders in the food chain – this helps to define the measures needed to achieve the Sustainable Development Goals on food waste and share best practice and results achieved
  • will take measures to clarify EU legislation relating to waste, food and feed, and facilitate food donation as well as the safe use of former foodstuffs and by-products in feed production
  • has examined ways to improve the use of date marking by stakeholders in the food chain – this includes ways to help consumers understand the system better, with particular emphasis on the ‘best before’ label

See also: EU actions against food waste

Critical raw materials

Critical raw materials (CRMs) are of high economic importance to the EU, yet there is a high risk associated with their supply due to the fact that production is concentrated in certain countries.

CRMs are used in many industrial applications and everyday electronic devices. For example, a smartphone might contain up to 50 different kinds of metals, including CRMs. The very low rate of recycling of most of these materials means that significant economic opportunities are lost. It can be difficult to recover critical raw materials in products that use them, so better product design must be encouraged.

The Commission

  • has prepared a report on key data sources, best practices and options for further action at EU level
  • has encouraged action by EU countries under the waste framework directive
  • is improving the exchange of information between manufacturers and recyclers of electronic products
  • will promote the development of European standards for material-efficient recycling of electronic waste, waste batteries and other relevant complex end-of-life products
  • is organising the sharing of best practice for the recovery of critical raw materials from mining waste and landfills

More on critical raw materials

Construction and demolition

Waste originating from construction and demolition represents one of the highest volumes of waste in Europe. A tonne of construction and demolition waste is produced per person per year – i.e. 500 million tonnes in the whole EU every year. Valuable materials are not always identified and recovered. Improving waste management in this sector is crucial for the circular economy.

The Commission

  • will take a series of actions to ensure improved recovery of valuable resources and adequate waste management in the construction and demolition sector, as well as to facilitate environmental performance assessments for buildings
  • has developed pre-demolition guidelines to boost high-value recycling in the sector as well as voluntary recycling protocols aimed to improve quality of and build confidence in recycled construction materials
  • has proposed in the revised legislative proposal on waste to require better sorting of construction and demolition waste
  • has introduced the EU construction and demolition waste protocol in 2016 – its aim is to increase confidence in the C&D waste management process and the trust in the quality of C&D recycled materials

More on the construction sector

Biomass and bio-based products

Bio-based material, such as wood, crops or fibres, can be used to manufacture a wide range of products, as well as for bio-fuel and other energy uses.

Apart from providing an alternative to fossil-based products, bio-based materials are also renewable, biodegradable and compostable. At the same time, these materials require special attention due to the need to minimise their lifecycle environmental impact, making sustainable sourcing an important priority. In a circular economy, a cascading use of renewable resources should be promoted together with innovation in new materials, chemicals and processes.

The Commission

  • is promoting the efficient use of bio-based resources through a series of measures, such as the promotion of the cascading use of biomass and support to innovation in the bio-economy
  • has included a target for recycling wood packaging in the revised legislative proposal on waste, as well as a provision to ensure that the bio-waste is collected separately

More on biomass

Review of fertilisers legislation

Recycled nutrients are a distinct and important category of secondary raw materials, for which the development of safety and quality standards is necessary. Recycled nutrients from organic waste or by-products (food waste, used water and animal by-products such as manure) can be returned to the soil as fertilisers, reducing the need for mineral-based fertilisers and creating organic fertilisers for EU farmers and gardeners. The circulation of these fertilisers is hampered by differing rules and quality standards across EU countries.

The Commission

  • has proposed a revision of the EU regulation on fertilisers. Once this revision has been approved by the Council and the European Parliament, it will facilitate the recognition of organic and waste-based fertilisers, thus developing an EU-wide market. This is an opportunity to show how Single Market legislation can be reconciled to create business opportunities while benefitting the environment.

Roadmap for fertilisers

More information