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Circular Economy Action Plan

April 24, 2020

Circular Economy Action Plan

ISB Global Circular Economy Action Plan 2020

For a cleaner and more competitive Europe


ISB Global Circular Economy Action Plan - Circular Economy

The Circular Economy Action Plan – There is only one planet Earth, yet by 2050, the world will be consuming as if there were three. Global consumption of materials such as biomass, fossil fuels, metals and minerals is expected to double in the next forty years, while annual waste generation is projected to increase by 70% by 2050.

As half of total greenhouse gas emissions and more than 90% of biodiversity loss and water stress come from resource extraction and processing, the European Green Deal launched a concerted strategy for a climate-neutral, resource-efficient and competitive economy. Scaling up the circular economy from front-runners to the mainstream economic players 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.

To fulfil this ambition, the EU needs to accelerate the transition towards a regenerative growth model that gives back to the planet more than it takes, advance towards keeping its resource consumption within planetary boundaries, and therefore strive to reduce its consumption footprint and double its circular material use rate in the coming decade.

ISB Global Circular Economy Action Plan - Circular Business

For business, working together on creating the framework for sustainable products will provide new opportunities in the EU and beyond. This progressive, yet irreversible transition to a sustainable economic system is an indispensable part of the new EU industrial strategy. A recent study estimates that applying circular economy principles across the EU economy has the potential to increase EU GDP by an additional 0.5% by 2030 creating around 700 000 new jobs.

There is a clear business case for individual companies too: since manufacturing firms in the EU spend on average about 40% on materials, closed loop models can increase their profitability, while sheltering them from resource price fluctuations.

Building on the single market and the potential of digital technologies, the circular economy can strengthen the EU’s industrial base and foster business creation and entrepreneurship among SMEs. Innovative models based on a closer relationship with customers, mass customisation, the sharing and collaborative economy, and powered by digital technologies, such as the internet of things, big data, blockchain and artificial intelligence, will not only accelerate circularity but also the dematerialisation of our economy and make Europe less dependent on primary materials.

ISB Global Circular Economy Action Plan - Molecule Stewardship

For citizens, the circular economy will provide high quality, functional and safe products, which are efficient and affordable, last longer and are designed for reuse, repair, and high-quality recycling. A whole new range of sustainable services, product-as-service models and digital solutions will bring about a better quality of life, innovative jobs and upgraded knowledge and skills.

This Circular Economy Action Plan provides a future-oriented agenda for achieving a cleaner and more competitive Europe in co-creation with economic actors, consumers, citizens and civil society organisations. It aims at accelerating the transformational change required by the European Green Deal, while building on circular economy actions implemented since 2015. This plan will ensure that the regulatory framework is streamlined and made fit for a sustainable future, that the new opportunities from the transition are maximised, while minimising burdens on people and businesses.

ISB Global Circular Economy Action Plan - Digital Transformation

The plan presents a set of interrelated initiatives to establish a strong and coherent product policy framework that will make sustainable products, services and business models the norm and transform consumption patterns so that no waste is produced in the first place. This product policy framework will be progressively rolled out, while key product value chains will be addressed as a matter of priority. Further measures will be put in place to reduce waste and ensure that the EU has a well-functioning internal market for high quality secondary raw materials. The capacity of the EU to take responsibility for its waste will be also strengthened.

Europe will not achieve transformative change by acting alone. The EU will continue to lead the way to a circular economy at the global level and use its influence, expertise and financial resources to implement the 2030 Sustainable Development Goals. This plan aims also at ensuring that the circular economy works for people, regions and cities, fully contributes to climate neutrality and harnesses the potential of research, innovation and digitalisation. It foresees the further development of a sound monitoring framework contributing to measuring well-being beyond GDP.

A Sustainable Product Policy Framework

ISB Global Circular Economy Action Plan - Product Sustainability

Designing Sustainable Products

While up to 80% of products’ environmental impacts are determined at the design phase, the linear pattern of “take-make-use-dispose” does not provide producers with sufficient incentives to make their products more circular. Many products break down too quickly, cannot be easily reused, repaired or recycled, and many are made for single use only. At the same time, the single market provides a critical mass enabling the EU to set global standards in product sustainability and to influence product design and value chain management worldwide.

ISB Global Circular Economy Action Plan - Empower Consumers

Empowering Consumers & Public Buyers

Empowering consumers and providing them with cost-saving opportunities is a key building block of the sustainable product policy framework. To enhance the participation of consumers in the circular economy, the Commission will propose a revision of EU consumer law to ensure that consumers receive trustworthy and relevant information on products at the point of sale, including on their lifespan and on the availability of repair services, spare parts and repair manuals. The Commission will also consider further strengthening consumer protection against green washing and premature obsolescence, setting minimum requirements for sustainability labels/logos and for information tools.

ISB Global Circular Economy Action Plan - Circular Production

Circularity in Production Processes

Circularity is an essential part of a wider transformation of industry towards climate-neutrality and long term competitiveness. It can deliver substantial material savings throughout value chains and production processes, generate extra value and unlock economic opportunities. In synergy with the objectives laid out in the Industrial Strategy, the Commission will enable greater circularity in industry by…

ISB Global Circular Economy Action Plan - Value Chains

Key Product Value Chains

The sustainability challenge posed by key value chains requires urgent, comprehensive and coordinated actions, which will form an integral part of the sustainable product policy framework outlined in section 2. Those actions will contribute to the response to the climate emergency and will feed into the EU Industrial Strategy, as well as into the forthcoming biodiversity, Farm to Fork and forest strategies. As part of the governance of the sectorial actions, the Commission will cooperate closely with stakeholders in key value chains to identify barriers to the expansion of markets for circular products and ways to address those barriers.

ISB Global Circular Economy Action Plan - eWaste Electronic Recycling

Electronics & IT

Electrical and electronic equipment continues to be one of the fastest growing waste streams in the EU, with current annual growth rates of 2%. It is estimated that less than 40% of electronic waste is recycled in the EU. Value is lost when fully or partially functional products are discarded because they are not reparable, the battery cannot be replaced, the software is no longer supported, or materials incorporated in devices are not recovered. About two in three Europeans would like to keep using their current digital devices for longer, provided performance is not significantly affected.

ISB Global Circular Economy Action Plan - Batteries & Vehicles

Batteries & Vehicles

Sustainable batteries and vehicles underpin the mobility of the future. To progress swiftly on enhancing the sustainability of the emerging battery value chain for electro-mobility and boost the circular potential of all batteries, this year the Commission will propose a new regulatory framework for batteries. This legislative proposal will build on the evaluation of the Batteries Directive and the work of the Batteries Alliance with the consideration of the following elements…

ISB Global Circular Economy Action Plan - Packaging


The amount of materials used for packaging is growing continuously and in 2017 packaging waste in Europe reached a record – 173 kg per inhabitant, the highest level ever. In order to ensure that all packaging on the EU market is reusable or recyclable in an economically viable way by 2030, the Commission will review Directive 94/62/EC to reinforce the mandatory essential requirements for packaging to be allowed on the EU market and consider other measures, with a focus on…

ISB Global Circular Economy Action Plan - Plastic Waste


The EU Strategy for Plastics in the Circular Economy has set in motion a comprehensive set of initiatives responding to a challenge of serious public concern. However, as consumption of plastics is expected to double in the coming 20 years, the Commission will take further targeted measures to address the sustainability challenges posed by this ubiquitous material and will continue to promote a concerted approach to tackle plastics pollution at global level as set out in section 7. To increase uptake of recycled plastics and contribute to the more sustainable use of plastics, the Commission will propose mandatory requirements for recycled content and waste reduction measures for key products such as packaging, construction materials and vehicles, also taking into account the activities of the Circular Plastics Alliance.

ISB Global Circular Economy Action Plan - Textile Recycling


Textiles are the fourth highest-pressure category for the use of primary raw materials and water, after food, housing and transport, and fifth for GHG emissions. It is estimated that less than 1% of all textiles worldwide are recycled into new textiles. The EU textile sector, predominantly composed of SMEs, has started to recover after a long period of restructuring, while 60% by value of clothing in the EU is produced elsewhere. In the light of the complexity of the textile value chain, to respond to these challenges the Commission will propose a comprehensive EU Strategy for Textiles, based on input from industry and other stakeholders. The strategy will aim at strengthening industrial competitiveness and innovation in the sector, boosting the EU market for sustainable and circular textiles, including the market for textile reuse, addressing fast fashion and driving new business models. This will be achieved by a comprehensive set of measures, including…

ISB Global Circular Economy Action Plan - Building & Construction

Construction & Buildings

The built environment has a significant impact on many sectors of the economy, on local jobs and quality of life. It requires vast amounts of resources and accounts for about 50% of all extracted material. The construction sector is responsible for over 35% of the EU’s total waste generation. Greenhouse gas emissions from material extraction, manufacturing of construction products, construction and renovation of buildings are estimated at 5-12% of total national GHG emissions. Greater material efficiency could save 80% of those emissions.

To exploit the potential for increasing material efficiency and reducing climate impacts, the Commission will launch a new comprehensive Strategy for a Sustainable Built Environment. This Strategy will ensure coherence across the relevant policy areas such as climate, energy and resource efficiency, management of construction and demolition waste, accessibility, digitalisation and skills. It will promote circularity principles throughout the lifecycle of buildings by…

ISB Global Circular Economy Action Plan - Food Water & Nutrients

Food, Water & Nutrients

The circular economy can significantly reduce the negative impacts of resource extraction and use on the environment and contribute to restoring biodiversity and natural capital in Europe. Biological resources are a key input to the economy of the EU and will play an even more important role in the future. The Commission will aim at ensuring the sustainability of renewable bio-based materials, including through actions following the Bioeconomy Strategy and Action Plan.

While the food value chain is responsible for significant resource and environmental pressures, an estimated 20% of the total food produced is lost or wasted in the EU. Therefore, in line with the Sustainable Development Goals and as part of the review of Directive 2008/98/EC referred to in section 4.1, the Commission will propose a target on food waste reduction, as a key action under the forthcoming EU Farm-to-Fork Strategy, which will address comprehensively the food value chain.

ISB Global Circular Economy Action Plan - Less Waste More Value

Less Waste More Value

Despite efforts at EU and national level, the amount of waste generated is not going down. Annual waste generation from all economic activities in the EU amounts to 2.5 billion tonnes, or 5 tonnes per capita a year, and each citizen produces on average nearly half a tonne of municipal waste. The decoupling of waste generation from economic growth will require considerable effort across the whole value chain and in every home.

ISB Global Circular Economy Action Plan -Hazardous Materials

Enhancing Circularity in a Toxic Free Environment

EU chemicals policy and legislation, in particular REACH, encourage a shift to ‘safe-by-design chemicals’ through the progressive substitution of hazardous substances to better protect citizens and the environment. However, the safety of secondary raw materials can still be compromised, for instance, where banned substances persist in recycled feedstock. To increase the confidence in using secondary raw materials, the Commission will…

ISB Global Circular Economy Action Plan - Secondary Markets

Creating a Functioning Market for Secondary Raw Materials

Secondary raw materials face a number of challenges in competing with primary raw materials for reasons not only related to their safety, but also to their performance, availability and cost. A number of actions foreseen in this Plan, notably introducing requirements for recycled content in products, will contribute to preventing a mismatch between supply and demand of secondary raw materials and ensure the smooth expansion of the recycling sector in the EU. Furthermore, to establish a well-functioning internal market for secondary raw materials the Commission will…

ISB Global Circular Economy Action Plan - Waste Exports

Addressing Waste Exports

The global market for waste is undergoing considerable changes. In the past decade, millions of tonnes of European waste has been exported to non-EU countries, often without sufficient consideration of proper waste treatment. In many cases, waste exports result both in negative environmental and health impacts in the countries of destination, and in loss of resources and economic opportunities for the recycling industry in the EU. Recent import restrictions introduced by some third countries have exposed the overdependence of the EU on foreign waste treatment, but they have also mobilised the recycling industry to increase its capacity and add value to waste in the EU.

ISB Global Circular Economy Action Plan - Cities & Regions

Making Circularity Work for People Regions & Cities

Between 2012 and 2018 the number of jobs linked to the circular economy in the EU grew by 5% to reach around 4 million41. Circularity can be expected to have a positive net effect on job creation provided that workers acquire the skills required by the green transition. The potential of the social economy, which is a pioneer in job creation linked to the circular economy, will be further leveraged by the mutual benefits of supporting the green transition and strengthening social inclusion, notably under the Action Plan to implement the European Pillar of Social Rights.

Crosscutting Actions

ISB Global Circular Economy Action Plan - Climate Neutrality

Circularity as a Prerequisite for Climate Neutrality

Next to reducing greenhouse gas emissions, achieving climate neutrality will also require that carbon is removed from the atmosphere, used in our economy without being released, and stored for longer periods of time. Carbon removals can be nature based, including through restoration of ecosystems, forest protection, afforestation, sustainable forest management and carbon farming sequestration, or based on increased circularity, for instance through long term storage in wood construction, re-use and storage of carbon in products such as mineralisation in building material.

ISB Global Circular Economy Action Plan - Correct Economics

Getting the Economics Right

Accelerating the green transition requires careful yet decisive measures to steer financing towards more sustainable production and consumption patterns. The Commission has already taken a series of initiatives in this respect, including integrating the circular economy objective under the EU Taxonomy Regulation, and carrying out preparatory work on EU Ecolabel criteria for financial products. The Circular Economy Finance Support Platform will continue to offer guidance to project promoters on circular incentives, capacity building and financial risk management. EU financial instruments, such as SME guarantees under the current framework and Invest EU as of 2021, mobilise private financing in support of the circular economy. The Commission has also proposed a new own resource for the EU budget based on the amount of non-recycled plastic packaging waste. In addition, the Commission will…

ISB Global Circular Economy Action Plan - Innovation & Digitisation

Driving the Transition Through Research, Innovation, & Digitisation

European businesses are frontrunners in circular innovations. The European Regional Development Fund, through smart specialisation, LIFE and Horizon Europe will complement private innovation funding and support the whole innovation cycle with the aim to bring solutions to the market. Horizon Europe will support the development of indicators and data, novel materials and products, substitution and elimination of hazardous substances based on “safe by design” approach, circular business models, and new production and recycling technologies, including exploring the potential of chemical recycling, keeping in mind the role of digital tools to achieve circular objectives. Marie Sklodowska Curie Actions can in addition support development of skills, training and mobility of researchers in this area.

ISB Global Circular Economy Action Plan - Global Leadership

Leading Efforts at a Global Level

The EU can only succeed if its efforts drive also the global transition to a just, climate-neutral, resource-efficient and circular economy. There is a growing need to advance discussions on defining a “Safe Operating Space’ whereby the use of various natural resources does not exceed certain local, regional or global thresholds and environmental impacts remain within planetary boundaries. For countries with an EU accession perspective, our closest neighbours in the South and the East, emerging economies and key partners across the world, the new sustainable models will open up business and employment opportunities, while strengthening the ties with European economic actors.

ISB Global Circular Economy Action Plan - Monitoring Progress

Monitoring Progress

In line with the European Green Deal and the 2020 Annual Sustainable Growth Strategy, the Commission will reinforce the monitoring of national plans and measures to accelerate the transition to a circular economy as part of refocusing the European Semester process to integrate a stronger sustainability dimension. The Commission will also update the Monitoring Framework for the Circular Economy. Relying on European statistics as much as possible, new indicators will take account of the focus areas in this action plan and of the interlinkages between circularity, climate neutrality and the zero-pollution ambition. At the same time, projects under Horizon Europe and Copernicus data will improve circularity metrics at various levels not yet reflected in official statistics.

ISB Global Circular Economy Action Plan - Conclusion


The transition to the circular economy will be systemic, deep and transformative, in the EU and beyond. It will be disruptive at times, so it has to be fair. It will require an alignment and cooperation of all stakeholders at all levels – EU, national, regional and local, and international. Therefore, the Commission invites EU institutions and bodies to endorse this Action Plan and actively contribute to its implementation, and encourages Member States to adopt or update their national circular economy strategies, plans and measures in the light of its ambition. Furthermore, the Commission will recommend including the circular economy among the topics for discussion on the future of Europe and a regular theme of citizens’ dialogues.

Recycled from: Circular Economy Action Plan 2020