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, despite its postponement from September to later in the fall. And no wonder.

With just a few more months left until publication, the phase to give input before publication has passed. The European Commission will now be hard at work revising the impact assessment so it can pass the Commission’s Better Regulation standards. They will be considering all the input from the formal public consultation last summer, and the closed targeted stakeholder consultation last December.

That means this is the last moment your organisation and team has to prepare its position and strategic direction before the publication of the file. Now it’s time to get the heads together one last time and ensure that you have a smooth-running system to respond to the text as soon as it’s out.

In order to get everyone aligned, you need to build up from the basics. So, what’s really on the table? What’s driving this Act? And most importantly: what impact might it have?

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 One Europe, One Market roadmap, agreed upon by the Parliament, Commission and Council, the proposal was expected in Q3 2026, with adoption foreseen for Q3 2027.  However, the proposal is now expected in November according to rumblings in the EU bubble, possibly affecting the larger timeline. According to various sources, this is due to a negative assessment of the Regulatory Scrutiny Board on the impact assessment prepared by the Commission. Due to this assessment, the Commission needs to redraft their impact assessment and have it approved by the Regulatory Scrutiny Board, before they can publish the proposal.

With resource scarcity, mounting waste, and global competition at the forefront, the EU Circular Economy 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

The consultation phase for the EU Circular Economy Act has concluded, marking a shift from the drafting stage towards upcoming legislative negotiations. The European Commission launched its first round of consultations on 1 August 2025, with the call for evidence and public consultation. To complement this, the Commission conducted a targeted consultation in December 2025 to test concrete options on technical issues such as public procurement, end-of-waste criteria, Extended Producer Responsibility reform, recycled-content targets and trans-regional circularity hubs.

On 28 July 2026, the Directorate-General for Research and Innovation published expert reports drawing on findings from EU-funded projects. These reports identify barriers to scaling circular solutions and provide policy recommendations intended to inform the forthcoming EU Circular Economy Act. The publications focus on key areas including Extended Producer Responsibility, recycled and bio-based content, end-of-waste criteria, transnational initiatives and circular public procurement.

These expert insights indicate the potential trajectory of the legislation. For instance, the reports recommend greater EU harmonisation for Extended Producer Responsibility, interoperable reporting and a focus on eco-modulation criteria covering durability, repairability and reusability. To stimulate secondary material markets, the experts advise developing material-specific EU end-of-waste criteria and investing in sorting and purification infrastructure. Regarding public purchasing, which accounts for approximately 14% of EU gross domestic product, the recommendations advocate making lifecycle costing the default approach and pooling demand among public authorities. The reports also highlight the need to overcome regulatory fragmentation to allow circular solutions to scale across borders, proposing harmonised testing protocols and simplified procedures for cross-border material movements.

It is important to note that these publications remain independent assessments and do not represent the final Commission position or the draft text itself. They do, however, provide an indication of the mechanisms under consideration in Brussels. With the initial window for shaping the Commission’s draft now closed, organisations must pivot their public affairs strategies. Engagement efforts must adapt to focus on Member States and Parliamentarians, as these actors will determine the final shape of the regulation during the impending negotiations.

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 EU 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.

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.

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 with EU Circular Economy Act now?

Because timing is everything.

Ideally you and your organisation have already been engaged during the first public consultation phase and afterwards, as the Commission was translating said feedback into concrete provisions on end-of-waste criteria, Extended Producer Responsibility harmonisation, public procurement, WEEE reform and resource-use considerations. This is when detailed, operational input from businesses was able to shape the framework of the EU Circular Economy Act and influence whether it will be a workable framework that unlocks investment, or an additional compliance layer.

European Commissioner Jessika Roswall has been clear that the EU Circular Economy Act must balance three elements: stable, harmonised rules, robust enforcement and market surveillance, and economic incentives aligned with circularity. As the draft regulation will soon be published, the scope and framework of the EU Circular Economy Act is largely locked in, but engagement is not too late.

With the publication of the draft proposal, a new phase of public consultations will begin, allowing your organisation to give input again, this time seeing exactly what the Commission is planning. This means it is important to have your positions and colleagues ready to analyse and evaluate the proposals.

Besides going through the Have-your-say portal, there is time for engagement with the other institutions. Most of the times, the fundamental structure and ambition of a text is rarely altered in negotiations, but that does not mean the Parliament and the Council have zero impact. Instead, they can alter targets and methodologies within the text. They also need the expertise of different sectors to define their position, which is where your opportunity lies, too.  

 

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 EU Circular Economy 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 coming soon and your last chance to decide the future of the EU circular market will come with it. This is a key moment to get ahead of the curve and get your positions ready to engage with EU policymakers.

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!