EU Circular Economy Act: how will it shape the future of the EU and your business?

Is this just another recycling law? Will it affect my EPR obligations? Do we need to rethink product design – again? A lot of questions are keeping organisations busy as momentum builds around the EU Circular Economy Act. And no wonder.

With the European Commission launching its formal public consultation on 1 August, and closing it on 6 November 2025, the first major window for stakeholder input has now passed. In parallel, the Commission also ran a more technical, targeted consultation with selected stakeholders, which closed on 4 December 2025.

Together, these processes mark the transition from consultation to policy design, as the Commission begins translating feedback into a legislative proposal for 2026. That means there is still a crucial phase ahead where well-timed, evidence-based business input can shape how the Circular Economy Act takes form in practice.

So, what’s really on the table? What’s driving this Act? And most importantly: what should your business be doing now to prepare?

What is the EU Circular Economy Act?

Proposed by European Commission President Ursula von der Leyen and led by Environment Commissioner Jessika Roswall, the upcoming EU Circular Economy Act is set to become a cornerstone of Europe’s new clean industrial policy. Positioned under the Clean Industrial Deal and the Competitiveness Compass, it aims to establish a genuine Single Market for secondary raw materials, double Europe’s circular material use rate to around 24% by 2030, and strengthen the EU’s economic security by reducing dependence on imported resources.

According to the Commission’s current planning, the proposal is expected in the second half of 2026, with adoption foreseen by the end of the mandate.

With resource scarcity, mounting waste, and global competition at the forefront, the Act aims to transform how European industries operate, thus turning today’s environmental pressures into tomorrow’s strategic opportunities. As one of the pillars of the new Clean Industrial Deal, the Circular Economy Act is set to push for systemic change, fostering lead markets for circular products, cutting through regulatory complexity, and unlocking investment in the technologies and infrastructure that will power Europe’s green transition.

The EU Circular Economy Act consultation: a critical window for influence

On 1 August 2025, the European Commission launched its call for evidence and public consultation for the EU Circular Economy Act (CEA), the first official step towards designing this flagship regulation. The consultation remained open until 6 November 2025 and drew responses from industry, NGOs, Member States, trade unions and citizens across Europe.

Since then, the Commission has complemented this open process with a more technical, targeted consultation testing concrete options on issues such as public procurement, end-of-waste criteria, EPR reform, recycled-content targets and trans-regional circularity hubs. Together with the feedback from both the public and targeted consultations, this input will feed into a legislative proposal expected in the third quarter of 2026, as indicated in the European Parliamentary Research Service briefing.

The first consultation phase is now closed, but there is still a decisive window for businesses to engage. Over the course of 2026, the Commission will be refining its policy choices before it tables the final proposal. Input through industry platforms, technical exchanges, pilot projects and direct engagement with Brussels will strongly influence how far-reaching and workable the eventual Act will be.

What’s in the scope of the EU Circular Economy Act?

According to the Commission’s Call for Evidence, the Circular Economy Act aims to address four persistent structural barriers:

1. Regulatory fragmentation:Divergent interpretations of waste legislation across Member States disrupt the Single Market for recyclable materials.
2. Unfavourable economics:Secondary materials remain less competitive due to inconsistent quality and higher costs.
3. Transparency gaps:Lack of standardised data on recyclability and material content impairs decision-making.
4. Material leakage:Poor enforcement, inefficient collection, and sorting lead to the loss of valuable and critical resources.

To overcome these challenges, the Commission has indicated that the Circular Economy Act will combine horizontal market-shaping tools with targeted reforms of existing waste law. The European Parliamentary Research Service (EPRS) briefing points to three main legislative levers under consideration:

• amendments to the Waste Framework Directive and Landfill Directive
• a reform of the Waste Electrical and Electronic Equipment (WEEE) Directive
• additional horizontal measures, including harmonised end-of-waste criteria, fiscal instruments and support for industrial symbiosis

At the same time, the Commission’s targeted consultation shows that it is exploring a wide toolbox of measures, from public procurement criteria and recycled-content targets to trans-regional circularity hubs and digitalisation of permits.

A key political question now emerging in the European Parliament and among stakeholders is how strongly the EU Circular Economy Act should prioritise waste prevention, reuse, repair and product longevity, rather than relying primarily on recycling and waste-management targets. Several scientific bodies and NGOs argue that absolute reductions in Europe’s material footprint will require binding resource-use targets and a stronger focus on upstream measures.

Why is the Circular Economy Act important?

The EU Circular Economy Act is more than a green file. It represents a redefinition of how competitiveness, innovation, and sustainability will be measured in the EU’s internal market.

Whether it is redesigning electronics for recycling, improving critical raw material recovery, or harmonising end-of-waste criteria, the Circular Economy Act is poised to reshape supply chains across sectors.

But despite the growing role of reuse in EU sustainability goals, it has so far received limited attention in the consultation process, raising important questions about the direction of EU circularity policy.

If the European Commission is to draft a legislative proposal in line with the details of the Call for Evidence, the EU Circular Economy Act can be expected to:

• Harmonise fragmented rules to support a functional circular economy;
• Simplify compliance and reduce administrative burdens through digital tools;
• Create demand for circular products through public procurement;
• Drive investment into recycling infrastructure and sustainable product design;
• Align with existing legislation such as the Packaging and Packaging Waste Regulation (PPWR), Waste Framework Directive (WFD), and Ecodesign for Sustainable Products Regulation (ESPR).

What does the EU Circular Economy Act mean for your business?

The EU Circular Economy Act is expected to have wide-reaching impacts across packaging, electronics, automotive, chemicals, construction, and textiles. Here is what businesses can expect:

1. New compliance and performance standards: Obligations on design for recyclability, disassembly, durability and transparency (such as the Digital Product Passport under the ESPR).
2. Simpler, more harmonised rules: Reduced regulatory friction for companies operating across multiple Member States, particularly in relation to waste classification, reporting and Extended Producer Responsibility.
3. Greater access to incentives: Public procurement preferences and funding opportunities for circular products, services and infrastructure.
4. Pressure to adapt business models: Emergence of circular business practices, including increased emphasis on Extended Producer Responsibility, product-as-a-service models, and closed-loop value chains, driven by regulatory simplification, Single Market barriers and growing demand for secondary raw materials.

 

Why should businesses engage now?

Because timing is everything.

The first public consultation phase is over, but the real design choices are still being made. Throughout 2026, the Commission will translate feedback into concrete provisions on end-of-waste criteria, Extended Producer Responsibility harmonisation, public procurement, WEEE reform and resource-use considerations before tabling its proposal. This is when detailed, operational input from businesses can shape whether the EU Circular Economy Act becomes a workable framework that unlocks investment, or an additional compliance layer.

European Commissioner Jessika Roswall has been clear that the Act must balance three elements: stable, harmonised rules, robust enforcement and market surveillance, and economic incentives aligned with circularity. This is precisely where sector-specific evidence from companies and industry associations can be decisive.

Once the draft regulation is published, the scope is largely locked in. Parliament and Council can negotiate and amend the text, but the fundamental structure and ambition are rarely altered. Early engagement now can determine whether your priorities are included or overlooked.

Current EU circularity rates have barely improved over more than a decade. According to the European Commission, the circular material use rate increased only marginally from 10.7% in 2010 to 11.8% in 2023, reaching 12.2% in 2024. This persistent stagnation is one of the reasons the Commission is turning to a binding legislative instrument to address structural market fragmentation and long-standing barriers to implementing circularity across Europe’s economy.

 

What’s at stake for the sectors that are affected by the EU Circular Economy Act?

According to the Call for Evidence, the Circular Economy Act is expected to impact sectors with high material use, complex product designs, or critical raw material dependencies. Here’s what’s on the line:

 

Construction

Companies may face new circularity criteria in public procurement, requirements to declare material composition, and stronger obligations on the reuse and recycling of construction and demolition waste. Harmonised end-of-waste criteria could reshape how materials like insulation, adhesives, and composites are classified and reused.

 

Electronics

The Commission is targeting improved collection and recycling rates for e-waste and critical raw materials.  Recent data show that only around 30–31% of e-waste is effectively recycled in the EU, far below existing targets, with many devices disappearing via informal or uncontrolled channels.

Commissioner Roswall has highlighted Waste Electrical and Electronic Equipment (WEEE) as one of the EU’s fastest-growing waste streams. In this context, the EU Circular Economy Act is expected to be a key vehicle to address collection shortfalls, Extended Producer Responsibility reform, harmonised treatment standards and improved recovery of critical raw materials in the electronics sector.

 

Chemicals

New transparency and traceability rules may require chemical content declarations at product level. Substances that hinder recyclability or disassembly could face restrictions or higher producer responsibility costs, especially if linked to packaging, electronics, or adhesives.

 

Packaging

The EU Circular Economy Act is expected to complement the Packaging and Packaging Waste Regulation (PPWR), reinforcing design-for-recyclability requirements and the use of secondary raw materials. Recent EU plastics measures already point to a more harmonised market framework across packaging rules.

 

Textiles

With low recycling rates and high environmental impact, textiles are under growing regulatory scrutiny. The Act is likely to introduce product-specific obligations around durability, repairability, material disclosure, and separate collection. In each of these sectors, the Act could transform how circular performance is measured, and rewarded. 

Let’s talk!

The EU Circular Economy Act is moving fast and the window to shape it remains open. Whether you’re just starting to assess your exposure or looking to put forward a strategic response, this is a key moment to get ahead of the curve.

Our sustainability experts are here to help you navigate what’s coming, understand what it means for your business, and make your voice heard in Brussels. Reach out to us via the form below to continue the conversation!