EU Framework for Circular Economy

» Circular Economy Action Plan

Introduction

The Action Plan positions circular economy as a core approach to reducing resource use, avoiding waste, and supporting broader environmental and economic objectives. It frames circularity as requiring action across the full value chain—from product design and production to consumption, waste management, and secondary raw material markets.

Key message: A circular economy is treated as a systemic policy agenda (not only “waste policy”), requiring product rules, market measures, consumer empowerment, and investment signals across sectors.

A sustainable product policy framework

This section sets out a product-policy foundation intended to make sustainability the norm across products placed on the EU market.

Product Policy Framework

The document describes a shift toward product rules that embed circularity requirements into the design stage. A Sustainable Product Policy Framework is presented as a mechanism to expand beyond current product-specific rules and drive consistent requirements across categories.

Core regulatory direction includes:

• Designing products to last longer (durability) and perform better over time.
• Improving reparability and upgradeability, including access to repair and maintenance options.
• Improving reusability and recyclability, and reducing the presence of problematic substances.
• Strengthening information along value chains, enabling traceability and better decisions (including for consumers and procurers).

Key message: The plan treats product design as the highest-impact intervention point for circular outcomes, since design choices shape durability, repair, reuse, and end-of-life value.

Empowering consumers and public buyers

The Plan includes measures to make consumer and procurement decisions more circular:

• Better product information so buyers can compare durability, reparability, and performance.
• Reducing misleading environmental messaging and strengthening trust in sustainability claims (linked to later legal developments such as consumer empowerment rules).
• Using public procurement as a lever to create demand for circular products and services.

Key message: Demand-side policy is treated as essential: circular supply requires market pull through credible information and procurement standards.

Circularity in production processes

The Plan addresses circularity within industrial systems by encouraging:

• Resource efficiency and cleaner production.
• Industrial symbiosis and better use of by-products.
• Practices that support secondary raw material use and reduce waste generation.

Key product value chains

This section focuses on value chains seen as high-impact due to volume, embedded emissions, waste generation, and circularity potential.

Electronics and ICT

The Plan addresses circular electronics through:

• Longer product lifetimes and better repair options.
• Measures targeting premature obsolescence.
• Better collection and treatment of e-waste and improved reuse/refurbishment pathways.

Key message: Electronics are treated as a priority chain where durability, repair, and reuse reduce both waste and resource demand.

Batteries and vehicles

Key directions include:

• Better sustainability across battery life cycles (materials, durability, recycling, and recovery).
• Measures aimed at strengthening value retention and end-of-life recovery in mobility-related product systems.

Packaging

Packaging is treated as a high-priority chain with a focus on:

• Waste prevention and reduction.
• Reuse models and improved recyclability.
• Stronger markets for recycled content and quality secondary materials.

Plastics

The Plan reinforces actions for plastics, including:

• Designing for recyclability.
• Increasing recycled content use where appropriate.
• Tackling problematic plastic waste streams and leakage.

Textiles

Textiles are addressed via:

• Longer product lifetimes, reuse, and repair.
• Collection, sorting, and high-quality recycling improvements.
• Addressing fast fashion drivers and waste.

Construction and buildings

Key points include:

• Resource efficiency and material use reductions in construction.
• Improving circularity of building materials and demolition waste.
• Supporting markets for secondary construction materials.

Food

Food-related circularity is described in terms of:

• Reducing food waste.
• Improving resource use in food systems.
• Supporting circular bioeconomy approaches consistent with sustainability safeguards.

Less waste, more value

This section addresses waste policy, secondary materials, and market conditions needed to keep value in the economy.

Harmonised waste collection and labelling

The Plan aims to reduce fragmentation and improve performance by:

• Harmonising collection approaches where needed.
• Improving consumer sorting clarity and collection effectiveness.
• Strengthening systems that deliver higher-quality recyclates.

Reducing waste and addressing waste shipments

The Plan covers:

• Waste prevention actions and reduction targets where feasible.
• Actions to reduce illegal shipments and ensure environmentally sound treatment.
• Stronger enforcement and improved transparency around waste flows.

A well-functioning internal market for secondary raw materials

The Plan emphasises:

• Quality requirements and standards for secondary materials.
• Market confidence and demand for recyclates.
• Removing barriers to safe use of secondary raw materials across the EU.

Waste prevention and circularity for hazardous substances

The Plan addresses the need to manage chemicals and substances of concern so circularity does not increase harmful exposures. This implies better information, substitution where appropriate, and careful integration of chemicals policy with circularity objectives.

Key message: “High-quality circularity” requires both material flow performance and chemical safety alignment.

Making circularity work for people, regions and cities

This section recognises implementation realities:

• Circular economy transitions have regional and sectoral impacts.
• Cities and local actors play a major role through services, infrastructure, public procurement, and consumer-facing systems.
• Skills, jobs, and social aspects must be integrated into transition planning.

Crosscutting actions

This section covers horizontal enablers.

Finance, investments and economic incentives

Focus includes:

• Directing investment toward circular business models and infrastructure.
• Using incentives to shift decisions away from linear consumption and toward reuse and durability.
• Improving risk/return conditions for circular solutions.

Measuring progress

The Plan stresses the need for monitoring frameworks, indicators, and consistent measurement across Member States and sectors—so circularity progress can be demonstrated and managed.

Research, innovation and digitalisation

The Plan highlights innovation and digital tools to enable:

• Product information systems,
• Traceability,
• Smarter resource management and circular services (e.g., reuse logistics, repair, and secondary markets).

Leading efforts at global level

The Plan frames circular economy as requiring international cooperation due to global value chains and trade. It references external engagement, standards, and international alignment to avoid simply shifting impacts outside the EU.

Monitoring progress

This section reinforces governance and tracking, including how progress will be assessed over time and linked to EU policy objectives.

» Directive (EU) 2024/825 – Empowering Consumers for the Green Transition

This Directive strengthens consumer protection by tackling misleading environmental practices and requiring clearer sustainability information.

Purpose and core approach

The Directive amends EU consumer rules to:

• Improve the reliability and comparability of environmental information given to consumers.
• Reduce misleading commercial practices related to green claims and sustainability labels.
• Support consumer decisions aligned with the green transition by ensuring information on durability and reparability is meaningful and not deceptive.

Main legal mechanism: targeted amendments

The Directive works by amending (at least) two key instruments:

• The Unfair Commercial Practices framework (Directive 2005/29/EC).
• The Consumer Rights framework (Directive 2011/83/EU).

Key content themes reflected in the amendments

1) Environmental claims and “climate neutral” messaging

A central feature is restricting misleading claims where a product is presented as having neutral, reduced, or positive climate/environmental impact based on offsetting (rather than actual product performance).

Key message: Claims based primarily on offsetting are specifically treated as problematic in the consumer-protection context.

2) Sustainability labels

The Directive addresses proliferation and potential unreliability of labels by strengthening conditions for label credibility and transparency (so consumers are not misled by “label-like” signals).

3) Durability and reparability information

The amendments to consumer rights aim to ensure consumers receive clearer information on:

• Durability,
• Reparability,
• Availability of spare parts (where relevant),
• And other information relevant to product lifetime and repair decisions.

Key message: Durability and reparability are treated as consumer information rights—supporting longer product use and circularity through informed demand.

4) Definitions and harmonisation logic

The Directive includes definitional and classification clarifications around environmental claims, labels, and what counts as misleading practice—aimed at making enforcement more consistent.

Implementation (entry into force / transposition)

The Directive includes provisions on when it enters into force and the timeline and obligations for Member States to transpose it into national law.

» Regulation (EU) 2024/1781 – Ecodesign for Sustainable Products Regulation

This Regulation creates a framework for setting ecodesign requirements across product groups, expanding beyond energy-related products and establishing tools such as a digital product passport.

Overall structure and mechanism

The Regulation is built as a framework: detailed requirements are expected to be set through delegated/implementing acts for specific product groups and parameters.

Key message: The Regulation establishes the “how” (framework, tools, enforcement), while product-group detail is added through later acts.

Chapter themes (high-level)

Across chapters, the Regulation addresses:

• General provisions (scope/definitions and who must comply).
• Rules for setting ecodesign requirements via delegated acts and parameters.
• Digital product passport (DPP) logic and information enablement.
• Labels and information tools to support market decisions.
• Conformity assessment, CE marking, and market surveillance.
• Measures on unsold consumer products (including restrictions and transparency).

Ecodesign requirements: what can be regulated

The Regulation enables requirements across a broad set of product aspects, such as:

• durability, reliability, reusability, upgradeability, reparability;
• energy and resource efficiency;
• recycled content and material efficiency;
• remanufacturing and recycling friendliness;
• restrictions or information for substances of concern.

Digital Product Passport (DPP)

The Regulation introduces a passport concept that:

• Stores/links product information in a structured way,
• Supports traceability and verification,
• Enables better decisions by value-chain actors and authorities (and potentially consumers, depending on access rules).

Key message: The DPP is treated as a core digital infrastructure for circularity—linking product rules to data availability and enforcement.

Conformity assessment, CE marking, enforcement

A key operational block includes:

• Technical documentation duties,
• Conformity assessment pathways,
• Market surveillance mechanisms,
• And enforcement coordination.

Unsold consumer products: restrictions and transparency

The Regulation includes rules targeting destruction of certain unsold consumer products and introduces transparency/reporting expectations as part of discouraging value destruction and incentivising reuse and redistribution pathways.

» Regulation (EU) 2025/40 – Packaging and Packaging Waste

This Regulation sets detailed requirements for packaging sustainability and waste reduction, including recyclability performance, recycled content requirements, minimisation, reuse/refill measures, and recycling targets.

Packaging minimisation (weight/volume and avoiding “false” volume)

The Regulation requires packaging to be designed so that weight and volume are reduced to the minimum necessary while maintaining packaging functionality, and it restricts packaging features used only to increase perceived product volume (e.g., double walls, false bottoms, unnecessary layers).

It also frames minimisation through performance criteria, harmonised standards, and measurable methodologies (including for empty space).

Empty space limits (grouped/transport/e-commerce and sales packaging)

The Regulation establishes an approach to quantify “empty space” and introduces requirements such as a maximum empty space ratio for certain packaging types, backed by Commission methodologies and implementation rules.

Recyclability: conditions, performance grades, and “recycled at scale”

Packaging is treated as recyclable only if it meets design-for-recycling and collection/sorting/recycling-at-scale conditions.

Recyclability performance is expressed in grades (A/B/C), with restrictions for non-compliance and an evolution over time toward stricter conditions (including a recycled-at-scale factor).

Key message: Recyclability is operationalised through measurable performance grades and time-phased market access conditions.

Design-for-recycling criteria: parameters

Annex parameters include issues such as additives, labels, sleeves, closures, adhesives, colours, and material composition—factors that affect sorting, contamination, and secondary material quality.

Minimum recycled content in plastic packaging (time-phased targets)

The Regulation sets minimum recycled content requirements for plastic packaging by category/format and timeline (including different thresholds by packaging type and later higher percentages).

It includes methodology and verification development, sustainability criteria for recycling technologies, and possible adjustment mechanisms under exceptional conditions.

Reuse/refill: systems, reporting, and obligations

The Regulation introduces measures to encourage reuse systems and refill systems, including reporting structures and implementation mechanisms.

It also sets out calculation methodologies and reporting for reuse targets, with supporting institutional mechanisms (e.g., observatory, electronic reporting systems).

Recycling targets (packaging waste)

Member States are required to meet recycling targets for total packaging waste and material-specific targets.

Deposit and return systems (DRS) and interoperability direction

The Regulation includes DRS requirements (including performance targets and minimum requirements references) and future assessment of interoperability.

» What this Means for ESG, Carbon Accounting, and Circularity Reporting

Across these instruments, the EU framework aligns around a consistent logic:

• Product design rules set durability/reparability/recyclability expectations (Action Plan + Ecodesign framework).
• Consumer information and market trust are strengthened by restricting misleading green marketing and improving durability/reparability information (consumer empowerment Directive).
• Packaging is regulated as a priority chain with quantified requirements for minimisation, recyclability grades, recycled content, and reuse/refill systems (Packaging Regulation).

Practical reporting implication (neutral statement): To operationalise compliance and demonstrate progress, companies typically need datasets that connect product/material design attributes, recycled content and sourcing, use-phase lifetime/repair, and end-of-life collection/recycling performance—exactly the categories emphasised across the policy framework.

Adaptation Notice under the EU Circular Economy

This text has been adapted in accordance with the guidelines set forth by the EU Circular Economy Framework. In our efforts to ensure transparency, accountability, and alignment, we have carefully reviewed and incorporated the EU Circular Economy Framework into the content. This adaptation process reflects our commitment to high-quality, accurate, and ensuring that the information presented adheres to an internationally recognized framework.