The Circular Economy Act must be bold! Europe's resilience depends on it

In a world increasingly shaped by climate imperatives and geopolitical uncertainty, Europe is facing a challenge: how do we ensure access to the materials we need while building a more sustainable, competitive, and resilient economy? The Circular Economy Act, announced by the European Commission, is a unique opportunity to meet that challenge, but only if it is bold, actionable, and truly ambitious.

At FEAD, we have published 10 policy recommendations aimed at making the Circular Economy Act a robust framework for transformation. These recommendations draw on the experience of Europe’s private waste and resource management sector, an industrial system that transforms society’s discards into new resources. In other words, the backbone of the circular economy.

The stakes are high. Global material demand is rising, and global waste generation is projected to increase by 70 per cent by 2050. Meanwhile, geopolitical instability, supply chain disruptions, and growing global competition have exposed Europe’s dependence on finite resources. In parallel, our environmental and climate objectives demand a dramatic shift away from extractive, linear models toward regenerative, low-carbon and circular alternatives.

Europe needs a new model — and it needs it now

Yet despite years of progress, circularity in the EU remains limited. The Circular Material Use Rate (CMUR), the share of materials recycled and fed back into the economy, stood at just 11.8 per cent in 2023, up by a meagre 1.1 percentage points since 2010. This stagnation is not just a statistical footnote; it is the signal of structural failures. Without clear signals, targets, and incentives to prioritise recycled materials, the market cannot and will not shift.

This is why FEAD’s first pillar for the Circular Economy Act that is needed is the boost of demand for recycled materials. We need binding recycled content targets, a 25 per cent CMUR by 2030, green public procurement mandates, and economic levers like VAT reductions or tax credits for recyclates. These are not just technical adjustments, they are the necessary drivers of a functioning circular economy.

The second pillar is a truly Circular Single Market. Today, recycled materials face trade barriers that virgin materials do not. Recyclates produced in Europe often struggle to move across borders or compete on cost with primary raw materials, despite being the more sustainable option. We need harmonised rules, simplified permitting, streamlined waste shipment procedures, and a regulatory environment that rewards circularity. These are only a couple of our recommendations.

This is not a wishlist. It is an industrial policy, one that matches the level of ambition seen in the Letta Report on the Single Market and the Draghi Report on European competitiveness. Both underline the urgency of removing structural bottlenecks, enhancing resource efficiency, and revitalising European industry. A strong Circular Economy Act can serve as the cornerstone of the Clean Industrial Deal, aligning circularity with climate, economic, and strategic autonomy goals.

Crucially, Europe must recognise the indispensable role of the waste and resource management sector. Too often invisible, this sector is in fact Europe’s environmental filter: collecting, sorting, recycling, and recovering value from what society discards. These systems reduce Europe’s reliance on virgin materials, fossil energy, and third-country imports. They also protect public health and the environment while generating local, non-relocatable jobs.

The waste management industry is already investing in the infrastructure and innovation needed for the circular economy, from AI-driven sorting to advanced recycling and waste-to-energy technologies. But for these efforts to deliver change at a systematic level, policy must keep pace with ambition.

FEAD’s 10 recommendations are not about more regulation. They are about better regulation, regulation that goes beyond critical raw materials, build a genuine circular market, and align environmental goals with economic competitiveness. They are a call to policymakers to stop treating circularity as a secondary priority and instead make it a foundation for Europe’s strategic future.

If the EU wants to maintain industrial sovereignty, reduce environmental pressure, and achieve its climate goals, it cannot do so by tinkering at the edges. The Circular Economy Act must tackle the structural barriers head-on and send a clear signal that circularity is not just a vision, but a concrete path forward. Because the choice is not between bold action and caution; it is between transformation and stagnation. And Europe cannot afford to stand still.