European Circular Economy Strategy

The European Circular Economy Strategy is one of the pillars of the European Green Deal and sets out the European Union's transition towards a regenerative, resource-efficient and climate-neutral economic model.

Its first version was published in 2015, followed by the new Circular Economy Action Plan of 2020 (CEAP 2020), which strengthened the objectives and measures needed to transform production systems, reduce material pressure and cut the emissions linked to the life cycle of products. The strategy focuses on keeping the value of products and materials in use for as long as possible, reducing resource extraction, preventing waste, enabling repair and reuse, boosting recycling and prioritising high-quality secondary materials.

The EU recognises that only an advanced circular economy will make it possible to reach climate neutrality by 2050, reduce the global material footprint and strengthen Europe's strategic autonomy at a time of growing instability in raw materials markets.

Main objectives

1. Reduce the environmental and material footprint of the European economy.
2. Decouple economic growth from the use of natural resources.
3. Promote ecodesign and product durability.
4. Favour reuse, repair and recycling over landfilling.
5. Develop a high-quality market for secondary raw materials.
6. Ensure sustainable and transparent consumption.
7. Strengthen industrial resilience and the EU's strategic autonomy.
8. Provide reliable data for environmental and resource planning.

These objectives feed directly into the Green Deal, the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Development Goals.

Complementary frameworks

The strategy is delivered through several regulatory frameworks:

• CEAP 2015 and CEAP 2020.
• The Ecodesign for Sustainable Products Regulation (ESPR, 2024).
• The Waste Framework Directive (2008/98/EC).
• The Packaging and Packaging Waste Regulation (PPWR).
• The EU Waste Shipment Regulation.
• The Landfill Directive (1999/31/EC).
• The Industrial Emissions Directive (2010/75/EU).
• The Strategy for Plastics in a Circular Economy.
• The EU Strategy for Sustainable and Circular Textiles (2022).
• The EU Batteries Regulation.

Priority value chains

The strategy identifies seven value chains with high material impact and circular potential.

Electronics and ICT

• Longer product lifespans.
• Right to repair.
• Digital Product Passport.
• Advanced recycling of batteries and electronic waste.

Batteries and vehicles

• A closed-loop battery economy.
• Recycled critical metals (cobalt, lithium).
• Design for disassembly.
• Strict recycled-content rules.

Packaging and plastics

• Less single-use packaging.
• Binding reuse targets.
• High-quality recycling.
• Digital traceability of packaging.

Textiles

• New rules for sustainable textiles.
• Durability requirements.
• Chemical and mechanical recycling.
• Extended producer responsibility.

Construction and buildings

• Mandatory recycled materials.
• Material passports.
• Circular management of construction and demolition waste.
• Life cycle assessment on site.

Food and bio-based systems

• Food-waste prevention.
• Circular bioeconomy and biorefineries.
• Composting and anaerobic digestion.

Water

• Water reuse.
• Leak reduction.
• Circular treatment of urban and industrial effluent.

Key instruments

ESPR: Ecodesign for Sustainable Products Regulation

The most transformative instrument. It requires products placed on the EU market to meet strict requirements on durability, repairability, refill compatibility, recyclability, recycled content and the removal of substances of concern. It also introduces the Digital Product Passport, which becomes mandatory between 2026 and 2030 depending on the sector.

Extended producer responsibility (EPR)

The strategy calls for stronger, broader EPR schemes in sectors such as packaging, plastics, textiles, electronic waste, tyres, oils and vehicles, with producers bearing costs, traceability and target compliance.

Right to repair

This includes the availability of spare parts, repair manuals, disassembly criteria and an obligation to repair under guarantee.

Mandatory reuse

The EU is introducing reuse targets for hospitality, beverages, retail, e-commerce and takeaway packaging.

Deposit-return schemes

For reusable and single-use packaging, with binding targets for 2030-2035.

Circular public procurement

Prioritising durable products, recycled content, low-carbon criteria and certified secondary materials.

Restrictions on hazardous substances

Especially relevant for batteries, electronics, textiles and plastics.

Circular economy and climate neutrality

The circular economy is closely linked to cutting emissions, because a large share of global greenhouse gas emissions stems from the extraction, processing and disposal of materials. The Ellen MacArthur Foundation estimates that applying circular economy strategies in key sectors such as construction, food and mobility could reduce global greenhouse gas emissions by around 39% by 2050. The sectors with the greatest impact include construction (cement, steel, aluminium), automotive and mobility, electronics, food, and textiles and fashion.

Indicators and monitoring

The strategy uses a European set of indicators, including the recycling rate by stream, the landfill rate, the recovery rate, the material footprint, domestic material consumption (DMC), resource productivity, waste generation per capita, preparation for reuse, and the Circular Material Use rate (the EU circularity indicator).

Financial instruments

The strategy is supported by NextGenerationEU funds for circular technology, digitalisation, waste management and industrial modernisation; by European Investment Bank green finance linked to circular goals; and by the EU Taxonomy, which classifies economic activities as sustainable when they reduce waste, increase circularity, lower the material footprint and meet minimum technical criteria.

Relationship with Spain

The European strategy is the framework from which national instruments derive, including the Spanish Circular Economy Strategy 2030, Law 7/2022, Royal Decree 553/2020, the regional waste plans, the ESRS E5 requirements and the ESPR. Spain must transpose and apply these rules within strict deadlines, with a direct impact on companies, the public sector, EPR schemes, waste operators and consumption.

Current challenges

• The need for regulatory harmonisation.
• Adaptation costs for SMEs.
• A lack of mature secondary materials markets.
• Lagging progress in sectors such as textiles and construction.
• Difficulty scaling deposit-return schemes.
• Limited standardisation of reusable packaging.
• Persistently high landfill rates in some Member States.

How Manglai helps

Meeting circular economy requirements and reporting on them depends on reliable data. At Manglai we help companies measure their carbon footprint, including the emissions linked to materials and waste, and prepare their sustainability reporting on auditable figures. Discover how Manglai can help you.