Five Domains for a Strong EU Circular Economy Act
By Julian Lauten-Weiss
Europe faces growing resource dependence, environmental degradation, geopolitical instability, and social inequality. The proposed EU Circular Economy Act (CEA) is a critical opportunity to respond to these pressures in a coherent and forward-looking way. To succeed, however, the CEA must move beyond narrow recycling targets and fragmented policy tools. It must address how products are designed, how resources circulate, how markets function, and how innovation and social equity are safeguarded.
In an extensive position paper available for download from the European Circular Economy Stakeholder Platform, the ACE Policy Team identifies five key domains which are briefly summarised in this article.
1. Competitiveness Through Upstream Innovation
Competitiveness in a resource-constrained world will be determined less by mere access to cheap materials and more by intelligent design. Most environmental impacts and economic value are locked in during the design and early use phases of products, yet policy still focuses heavily on end-of-life treatment. The CEA should place binding design requirements at its core, covering durability, repairability, recyclability, chemical safety, and software support. These criteria must be measurable and enforceable, supported by robust Digital Product Passports that enable market surveillance and transparency across value chains.
Downstream activities—repair, refurbishment, remanufacturing, logistics, and resale—are also a major source of value creation, often driven by small and medium-sized enterprises. To protect and scale these activities, the CEA must be accompanied by targeted intellectual property reforms. Repair and interoperability should not be undermined by patents, design rights, or trade-secret claims that block legitimate access to parts, tools, or information. Clear obligations on spare-part availability, fair pricing, bans on anti-repair locks, and access to diagnostics and device data are essential to ensure that products remain in use for longer.
Extended Producer Responsibility (EPR) systems must likewise evolve. Current schemes are largely disconnected from product quality and reward recycling by weight rather than high-value circular outcomes. Linking EPR fees to verified product performance—rewarding durability and repairability while penalising poor design—would create strong incentives for upstream innovation. Fiscal measures, such as expanded reduced VAT rates for repair, refurbishment, and compliant products, can further reinforce these signals.
2. European Resource Independence by Design
Strategic autonomy cannot be achieved through extraction alone. True resource independence requires systems thinking that recognises interactions between environmental, economic, and social objectives. Measures designed to secure critical inputs must not undermine climate goals, biodiversity protection, or social cohesion. The CEA should therefore align explicitly with the Sustainable Development Goals and adopt integrated metrics to avoid narrow, single-objective solutions. A Just Transition approach is essential to ensure that the costs and benefits of circularity are shared fairly and that vulnerable groups are not disproportionately affected.
Demand-side strategies are central to this agenda. Reducing material exposure requires sufficiency measures alongside circular design. Reuse, leasing, product-as-a-service models, and targeted phase-downs of low-value or high-risk materials can significantly lower resource demand while increasing resilience to supply shocks. This perspective is particularly important in relation to critical raw materials. Current EU approaches still privilege extraction and processing over reuse, repair, and secondary markets. The CEA should rebalance priorities by favouring secondary supply, reuse-oriented recycled-content requirements, and alignment between Digital Product Passports and verifiable reuse targets. However, strategic projects must not bypass environmental or social safeguards in the name of speed.
3. Resilience of the Single Market
A resilient Single Market keeps materials and products circulating at their highest value for as long as possible. Yet current frameworks continue to prioritise recycling tonnage over life-extension strategies. The CEA should embed the waste hierarchy at its core, with quantitative targets that prioritise prevention, reuse, repair, and remanufacturing. Where recycling is necessary, policy must consider energy use, emissions, material losses, and output quality, rather than treating all recycling routes as equivalent.
Fragmentation across Member States remains a major barrier to scaling circular solutions. Divergent standards, inconsistent enforcement, and incompatible data systems prevent repaired, refurbished, and remanufactured goods from circulating freely. Stronger harmonisation of standards, Digital Product Passport requirements, and surveillance methodologies is essential to unlock economies of scale and ensure a level playing field. Cross-border circular ecosystems should be actively supported. Repair networks, remanufacturing hubs, and secondary markets must be able to operate beyond national borders through mutual recognition of certifications and interoperable data systems.
Social equity is also central to market resilience. While durable and repairable products lower costs over time, higher upfront prices can exclude low-income households. The CEA should therefore combine product requirements with consumer incentives, social repair tariffs, and public procurement strategies that ensure affordable access. Workers affected by shifts in value chains must be supported through training, social protection, and regional transition measures.
4. Environmental Protection via a Regenerative Bioeconomy
Policy debates on the bioeconomy often focus on valorising waste streams while overlooking deeper structural drivers of environmental harm. Intensive land use, monocultures, and reliance on animal-based protein remain key causes of biodiversity loss and emissions. The CEA should address these systemic challenges directly. Waste prevention must be prioritised, particularly in food systems, where post-harvest losses and supply-chain inefficiencies remain high.
A regenerative bioeconomy requires incentivising practices such as agroforestry, crop rotation, cover cropping, and reduced tillage. These approaches restore soil health, enhance biodiversity, and enable agriculture to contribute to climate mitigation. Equally important is maintaining material integrity. Some bio-based innovations introduce contamination risks that undermine both technical and biological cycles. Life-cycle assessments should therefore guide design choices, ensuring that materials remain compatible with long-term circular flows and avoid unintended environmental harm.
5. Innovation Driven by Research and Development
The circular transition depends on knowledge, skills, and experimentation. Research funding at EU and national levels should embed circularity criteria, ensuring public investment supports material efficiency, life extension, reuse, and high-quality recycling. Education and training must also evolve. Circular economy literacy should be integrated across all levels of education to equip future professionals with the skills needed for systemic change. Universities can play a leading role through specialised hubs focused on circular design, materials, and business models.
Startups and SMEs are critical drivers of circular innovation but often lack access to funding, infrastructure, and expertise. Shared facilities, mentorship, and advisory support can help translate circular ideas into scalable solutions. At the ecosystem level, incubators and clusters should reward redesign, remanufacturing, and sustainable business model experimentation.
Moving from Vision to Implementation
The CEA represents a chance to align Europe’s economic strategy with planetary boundaries and social justice. By acting across these five domains—upstream innovation, resource independence, Single Market resilience, regenerative bioeconomy, and research-driven innovation—the EU can move from fragmented initiatives to a truly systemic circular framework. The challenge now is not a lack of ideas, but the political will to embed them coherently, enforce them effectively, and act at the scale the moment demands.
