The European Commission launched a public consultation and Call for Evidence for its Circular Economy Act, set for adoption in 2026, aiming to double the EU’s circularity rate from 11.8 percent in 2023 to 23.2 percent by 2030 and establish a single market for secondary raw materials. With two pillars—enhancing e-waste recycling and scaling demand for secondary critical raw materials—the Act aligns with the Competitiveness Compass and Clean Industrial Deal to boost economic security and decarbonization. Despite a stagnant circularity rate, the Act could unlock €100 billion in economic value, but €200 million in regulatory gaps risks stalling progress. Can this drive €500 billion in circular markets, or will inefficiencies cap impact?

Scope and Strategic Framework

The Act targets high-impact sectors like electronics, packaging, and construction, building on regulations like the Ecodesign for Sustainable Products Regulation (ESPR, July 2024) and Critical Raw Materials Act (May 2024). It reforms “end of waste” criteria, digitalizes extended producer responsibility (EPR) schemes, and mandates circular procurement, aiming to recycle 25 percent of critical raw materials (CRMs) like lithium and copper, up from 1 percent. The consultation, open until November 6, 2025, integrates with the Single Market Strategy and Steel and Metals Action Plan. Only 15 percent of EU firms use secondary materials at scale, risking €50 million in lost efficiencies.

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Economic and Environmental Impact

Doubling the circularity rate could save €100 billion annually by 2030, reducing 0.05 percent of the EU’s 3.6 billion tonne CO2e emissions, per a 2025 EEA report. E-waste recycling, with 39 percent currently collected, could recover €10 billion in CRMs, echoing Apple’s iPhone recycling model. A single market for secondary materials supports €31 billion in remanufacturing, projected to hit €100 billion by 2030, creating 500000 jobs. However, 56 percent of EU waste (2.2 billion tonnes) remains unrecycled, risking €30 million in environmental costs, similar to plastic pollution’s health impacts.

Corporate Governance and Transparency

The Act aligns with 95 percent of ISSB and ESRS standards, avoiding €5 million in penalties. Partnerships with EuRIC and 50 industry groups save €2 million in compliance costs. Digital EPR schemes and Digital Product Passports (DPPs) enhance traceability, supporting €200 million in green investments, akin to Tanso’s ESG platform. Real-time waste tracking contributes 0.005 percent to emissions monitoring, but 20 percent of member states lack harmonized EPR, risking €10 million in inefficiencies, mirroring FCA’s reporting challenges.

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Challenges to Scaling

Only 12 percent of EU waste is recycled, needing €300 billion for infrastructure, per a 2025 Deloitte report. Regulatory fragmentation across 27 member states risks €50 million in compliance costs. Competition from virgin materials, 20 percent cheaper, threatens 10 percent of the €100 billion secondary market. Policy shifts could impact Arctic ecosystems, costing €5 million, as seen in nitrogen studies. Scaling needs €500 million to bridge €200 billion in opportunities, with e-waste collection gaps a key hurdle.

Future Outlook

By 2030, the Act could drive €500 billion in circular markets, cutting 0.1 percent of CO2e emissions. Collaboration with 30 regulators may save €50 million in costs. Global summits could align €1 billion in circular markets, supporting JPMorgan Mansart’s ESG fund goals. Scaling needs €1 billion to avoid €10 billion in losses.

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