Circular Economy: From Regulation To Real Business Value

On 12 May 2026, we hosted a webinar in collaboration with Eco Intelligent Growth on Circular Economy: From Regulation to Real Business Value, exploring how circular principles are already being applied across supply chains, and how organisations can turn EU circular economy regulation into a genuine strategic advantage. If you missed it, you can watch the recording here.

This blog post builds on the themes explored in that session. The EU Circular Economy Act (CEA) is a legislative proposal that the European Commission is expected to put forward in Q3 2026, where it will form a central pillar of both the Clean Industrial Deal and the Competitiveness Compass for 2024–2029. The CEA will most likely be built on three pillars: amending the Waste Framework Directive and Landfill Directive; amending the Waste Electrical and Electronic Equipment (WEEE) Directive; and additional measures. It has not yet been adopted into law. In the meantime, the Commission has been actively consulting stakeholders on its design, and the direction of travel is becoming clearer.

The proposed Act aims to keep resources in use for as long as possible, moving away from the traditional linear model - take, make, use, dispose - that 90% of the EU economy still follows. Critically, circularity starts at the design stage: products must be designed to avoid waste, use fewer inputs, be reusable, and recycling-ready. Recovered materials can then be fed back into the economy, reducing the need for virgin resource extraction - but achieving this in practice requires the right infrastructure and legal frameworks.

The EU has two overarching objectives for the CEA: reducing environmental damage by cutting waste and resource extraction and strengthening economic resilience by reducing dependence on virgin materials. Central to both is a commitment to double the EU’s circular material use rate to 24% by 2030.

Challenges the Circular Economy Act must address

• Achieving those ambitions will require the CEA to confront several structural challenges:The EU relies heavily on other countries for strategic resources; it imports nearly 100% of its heavy rare-earth elements from China. Mandating the recovery of Critical Raw Materials (CRMs) is therefore essential - yet recycling rates for these materials currently sit below 1%, making economic viability a significant challenge. This is why the Critical Raw Materials Act sets a target for 25% of strategic raw materials to be sourced from recycling.
• There are no common EU-wide rules to determine when waste becomes a usable product - what is referred to as "end-of-waste" criteria. All 27 EU member states currently operate under divergent national regimes, creating legal uncertainty and blocking the cross-border trade of recycled materials, resulting in a fragmented single market. A draft implementing act was introduced for consultation towards the end of last year, specifically establishing end-of-waste criteria for plastics. We expect this approach to be carried forward for other waste streams into the Circular Economy Act itself.
• A price gap persists between virgin and recycled materials, with recycled materials often costing more and being perceived as lower quality. The CEA must make it economically attractive for companies to use recycled materials and ensure that recycled materials can produce high-quality outputs.
• EU waste generation and material consumption remain high, at around 14 tonnes per person per year in 2024, creating the need for a key policy decision: whether to focus on improving recycling efficiency, or to set binding targets to reduce absolute material consumption.
• Extended Producer Responsibility (EPR) schemes require producers to take financial responsibility for what happens to their products at end-of-life. The problem is that producer organisations are currently incentivised to cut costs rather than improve circular outcomes.

The Commission's objectives for the Circular Economy Act

Unlike earlier circular economy initiatives - which were framed primarily as environmental policy - the CEA is now explicitly positioned as a competitiveness instrument., It is overseen by Commissioner Jessika Roswall, with oversight from Executive Vice-Presidents Teresa Ribera and Stéphane Séjourné, a governance structure that reflects the Act's strategic importance within the Clean Industrial Deal.

At the November 2025 Expert Group Meeting, the Commission set out specific objectives. Member State directors broadly agreed that the CEA should increase both the quantity and quality of separately collected waste and EU secondary raw materials, harmonise end-of-waste criteria and EPR rules across member states, boost demand through recycled-content targets, and simplify implementation for businesses. Three interconnected rationales drive the urgency behind these goals.

• Geopolitical and security. Mandating the recovery of critical materials - such as permanent magnets from electric vehicles - would reduce EU dependence on volatile foreign supply chains and reinforce the objectives of the Critical Raw Materials Act.
• Environmental and health. The UN estimates that resource extraction and processing account for around 50% of global greenhouse gas emissions and 90% of biodiversity loss. A product's design determines approximately 80% of its environmental impact, making upstream intervention far more effective than end-of-life management alone.
• Economic. Transitioning to a circular economy is projected to increase EU GDP by up to 0.5% and create approximately 700,000 new jobs, particularly in the repair and recycling sectors.

From Policy to Practice: the Cradle-to-Cradle framework

Understanding the regulatory landscape is only part of the picture. The more pressing question for businesses is how to respond to it - and this is where the Cradle-to-Cradle (C2C) design framework and C2C Certified® Products Program, applied by our webinar collaborators at Eco Intelligent Growth (EIG), an accredited Cradle to Cradle Certified® Conformity Assessment Bodies, offer a practical and commercially grounded route forward.

It is essential to understand both the distinction and the connection between these two concepts. C2C design is the foundational framework that treats all materials as continuous nutrients within waste-free, closed-loop lifecycles. Meanwhile, Cradle to Cradle Certified® is a globally recognised, science-based standard for designing products that are good for people and the planet whilst achieving regulatory alignment. It can be applied to redesign products entirely or, more immediately, to assess existing risks and define a targeted optimisation strategy, making it accessible to organisations at different stages of their circular transition.

Ultimately, while C2C design provides the visionary blueprint, the Certification Program delivers the measurable proof.

The framework covers four interconnected dimensions:

• Material health: assessing chemical risks to people, the planet through product entire life cycle
• Product circularity: circular sourcing, circular design, and end-of-use pathways
• Resource management: energy, emissions, water, and soil stewardship in manufacturing
• Social aspects: ethical practices across the value chain

Together, these dimensions map closely onto the very challenges the CEA is designed to address, from end-of-waste criteria and recycled-content targets to EPR obligations and critical raw material recovery. Businesses that engage with C2C now are therefore not simply preparing for compliance; they are positioning themselves to extract genuine commercial value from the regulatory shift ahead.

To see how this works in practice, watch the recording of our 12 May 2026 webinar, where our colleagues at EIG walk through a series of real-world case studies demonstrating the concrete impact of implementing this framework across a range of organisations and sectors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.