Making the Circular Economy Act the cornerstone of a sovereign and circular Europe

The Circular Economy Act (CEA) is an ambitious initiative by the European Commission to strengthen the Union's resilience, competitiveness, and economic sovereignty by supporting the emergence of a single European market for secondary raw materials. Circul'R welcomes this initiative and is mobilizing its experience in the field with companies and institutions to contribute to truly transformative circularity.

‍

Since 2017, Circul'R has been supporting numerous public and private players in structuring circular sectors, securing supplies, and recycling critical materials, notably through the Circular Industry Coalition —in partnership with the French Atomic Energy Commission and supported by the Ministry of Economy—and the Circular Finance Coalition, which mobilizes the main French banks around the financing of circularity.

These initiatives demonstrate that combining regulation, innovation, and cooperation is essential to making circularity a lever for European competitiveness and sovereignty.

‍

The blind spots of the Circular Economy Act bill

• Circular business models: a driving force behind the transition that is still undervalued.

The text focuses mainly on recycling. However, circular business models—repair, reuse, rental, functional economy—are the real drivers for reducing resource use and creating sustainable jobs at the local level. Their explicit support is essential to balance the European strategy.

• The circular material utilization rate: a useful but incomplete indicator

Thecircular material utilization rate—or recycled material utilization rate—provides important information, but its scope remains too limited to effectively steer the transition: it reflects neither total resource consumption nor the impacts generated outside the European Union. This partial view limits the CEA's ability to steer the economy toward true sobriety.

‍

Recommendations from Circul’R

‍

1- Clearly support circular business models.

‍

Repair, reuse, rental, and functional economy models are a cornerstone of the circular transition. To this end, the CEA could contribute to:

• Make circular models more competitive through taxation (VAT reductions, exemptions, extended depreciation).
• Support investment through CAPEX/R&D grants and compensation for companies in transition.
• Finance circular infrastructure ( remanufacturing, reconditioning, sorting, upcycling) and support repair trades.
• Simplify market access and increase transparency (labeling, repairability ratings).
• Conduct awareness campaigns to change perceptions (“second life ≠ lower quality”).

2- Set a European target for reducing the material footprint.

‍

To reinforce the CEA's ambition, it is essential to incorporate a clear objective of reducing the material footprint. Such an objective would make it possible to:

• Place sobriety and the reduction of resource use at source at the heart of product strategies, making recycling a last resort.
• Measure the real impact on natural resources, including outside the EU, and strengthen European material sovereignty.
• Complement the circular material utilization rate by incorporating reuse, repair, reconditioning, and eco-design into performance assessments.
• Base actions on reliable and comparable indicators, including life cycle assessments, to limit greenwashing. 
• Stimulate industrial innovation and the sustainable competitiveness of European companies.

3- Establish a fiscal and regulatory framework that provides real incentives.

In order to correct economic imbalances between linear and circular models, the CEA could contribute to:

• Create a tax environment that favors circular solutions and discourages linear models.
• Define common European standards on the repairability, disassembly, and durability of products.
• Set binding circularity targets and encourage traceability through digital tools and shared indicators.
• Establish exemplary public procurement with quotas for circular purchases and second-life products.
• Supporting businesses through training to accelerate the development of skills in circular models.
  

Strong consensus among economic actors

‍

The contributions collected by Circul'R from 33 large companies, SMEs, and startups reveal a clear alignment:

• 97% believe that regulation should play an important or very important role in promoting circular business models.
• 84% consider it relevant or very relevant to adopt a material footprint reduction target.

Those involved in the field are ready. They are calling for a clear, harmonized, and incentivizing framework.

‍

Conclusion

‍

Already promising for European circular sovereignty, the Circular Economy Act can transform the trial by fully integrating:

‍

‍

1. 1. Clear support for circular business models.
2. 2. A European target for reducing the material footprint.
3. 3. A truly incentivizing fiscal, regulatory, and financial framework.
   

‍

Circul'R reaffirms its commitment to contributing to the development of a sustainable, resilient, and competitive European economy and stands ready to support the Commission and European stakeholders in structuring an ambitious framework for the Circular Economy Act.

‍

Download our recommendations

‍