The circular economy explained

The Earth's resources are not infinite. The circular economy makes the use of products and materials more sustainable and offers the EU an opportunity to become more competitive.

What is the circular economy?

The circular economy is a system where products and materials are shared, leased, reused, repaired, refurbished and recycled instead of being thrown away. This gives them a longer life cycle, and reduces both waste and the need to produce new goods.

Currently, the world's economy is based on a predominantly linear model where goods are used for a short time and then discarded. This results in high pressure on nature and its resources, together with growing levels of waste and pollution.

Circular economy

reduces waste, resource use and pollution
reduces our consumption footprint and emissions
creates new jobs and business opportunities
makes Europe more competitive globally

Linear economy

is based on the 'take-make-use-dispose' model
puts pressure on natural resources
creates waste and pollutes the environment
increases the need for raw materials, making the EU more dependent on imports

The need for a circular economy

With today's current production and consumption patterns and a growing global population, three Earth-sized planets will be needed by 2050.

Shifting to a circular economy means less production of goods and materials, which in turn will lead to lower emissions of CO₂ and other pollutants, as well as a reduced use of the Earth's limited resources.

Three planets in a row: the first in blue, the other two dotted.

The circular economy brings benefits to:

the environment, by better protecting it
the economy, by reducing dependence on raw materials
society, by offering new opportunities for business and jobs

The circular economy in the EU

Today, barely 10% of the materials used in the EU come from recycled materials. The rate of circular material use was 11.8% in 2023 – marking a slight increase of 1.1 percentage points compared to 2010.

With regard to raw material consumption, there has been a slow decrease in the last 15 years in terms of per capita consumption. Data show that 14.1 tonnes of raw materials were consumed per person in the EU in 2023, compared to 16.3 tonnes in 2009 (Eurostat, 2023).

Over 185 kg of packaging waste is produced per person in the EU (Eurostat, 2025), while overall only 38% of waste is recycled, and can be re-used to produce new goods.

How is the EU moving towards a circular economy?

The EU's goal is to establish a circular and climate-neutral economy by 2050, and to double the use of recycled material between 2020 and 2030.

The EU has launched a series of policy initiatives to move towards that goal.

They include the circular economy action plan, the ecodesign directive and the 'right-to-repair' directive.

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