EU Circular Economy Act should ensure ‘systemic transformation’, say academics

Previous efforts by Europe to reduce waste and increase materials reuse across the economy have failed to deliver transformational change, a University of Cambridge report argues

To reduce waste and increase the reuse of materials, the EU must ensure that circular economy principles are adopted across all policy areas, not just in environmental policy, says a report by the Cambridge Institute for Sustainability Leadership. 

The Circular Economy Action Plan — first adopted in 2018 and revised by the European Commission in 2023 — has failed to bring about the “systemic transformation” needed to establish circular economy infrastructure in the EU, the CISL report says. 

It stresses that a new Circular Economy Act promised by European Commission president Ursula von der Leyen, who was appointed for a second term in July 2024, must go further. 

According to the report, treating circular economy principles as environmental policy — separate from those on climate, industry and employment — has led to “fragmentation” and “inconsistencies” in priorities. For example, the EU’s chemicals regulation restricts the use of certain substances in recycled products, which has impeded the adoption of these materials in circular business models, the report says.

Policymakers must focus on aligning policies and providing regulatory certainty, the CISL argues. 

It recommends leveraging public funds to incentivise private sector investment in circular economy infrastructure, including waste management facilities, and using financial incentives to promote circular activities and disincentivise linear ones — for example, exempting repaired and resold products from VAT.

“The circular economy is vital to the EU’s strategic goals of autonomy, climate neutrality and sustainable growth,” says Sanna Markkanen, report author and CISL head of policy analysis, in a statement. “It also supports high-quality jobs, local development and social inclusion.”

The report is available to read here.