Circular Economy

The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended. In practice, it implies reducing waste to a minimum. When a product reaches the end of its life, its materials are kept within the economy wherever possible. These can be productively used again and again, thereby creating further value. This is a departure from the traditional, linear economic model, which is based on a take-make-consume-throw away pattern. This model relies on large quantities of cheap, easily accessible materials and energy.


A circular economy encourages sustainability and competitiveness in the long term. It can also help to:

  • Preserve resources – including some which are increasingly scarce, or subject to price fluctuation

  • Save costs for European industries

  • Unlock new business opportunities

  • Build a new generation of innovative, resource-efficient European businessesmaking and exporting clean products and services around the globe

  • Create local low and high‐skilled jobs

  • Create opportunities for social integration and cohesion


  • Considerable transition costs, such as R&D, asset investments, and public investment

  • Incentives for producers and recyclers

  • A circular economy would require technical skills which are currently not present in the workforce

  • A systemic shifts in consumer behaviour and business models

  • Necessity to act at many levels (international, European, national, local, business, and individual) and in many policy areas (waste management, professional training, packaging and product design, research and development, and finance)