Four system drivers to fast-tracking the EU's circular economy in the next 5 years

With Ursula von der Leyen’s reappointment as European Commission President, we’re looking at a promising agenda to push Europe’s competitiveness and sustainability priorities forward. A major highlight is the anticipated Circular Economy Act , set to drive demand for secondary materials and establish a Single Market for waste—an essential step for businesses eager to innovate sustainably and embrace a truly circular economic model.?

But what will it take to truly shift Europe from today’s resource-intensive, waste-heavy practices to a more sustainable, circular economy? And how can the EU create the supportive policies and infrastructure businesses need to make this transformation viable??

As part of the Cambridge Institute for Sustainability Leadership (CISL), our Taskforce for Climate Neutral and Circular Materials and Products has proposed an ambitious approach to accelerate this shift over the next five years. Taking a systemic view, we explore how various factors within the broader ecosystem can either hinder or support Europe’s circular economy transition. On September 12, we launched our vision at the European Parliament, in an event hosted by MEP Sara Matthieu , bringing together policymakers, businesses, and civil society to discuss actionable strategies for advancing the EU’s circular transition.?

This article kicks off a series unpacking our report, "No Time to Waste: Driving the EU’s Resilience and Competitiveness through Circular Economy Transformation ," with an overview of the core elements. In the coming weeks, we’ll dive into each of the four system drivers identified in the report, exploring how they can drive real, lasting change for the EU’s circular economy transition.?

EU’s progress on the circular economy?

The EU has made significant progress toward a circular economy, largely driven by its Circular Economy Action Plans, which helped reduce waste, promote sustainable product design, and stimulate demand for circular materials in key sectors like construction and packaging. However, progress is still slower than needed, held back by inconsistent policies across Member States and uneven implementation, especially in industrial and waste management sectors.?

Key gaps remain in moving from traditional, resource-heavy practices to truly circular ones. For example, while some Member States have taken the lead, circular material use rates across the EU remain low, with new materials still preferred over recycled alternatives. Bridging these gaps will require cohesive policy frameworks that remove regulatory inconsistencies and provide supportive infrastructure to drive circular practices across Europe.?

System drivers for circular economy?

Fast-tracking the EU’s circular economy will require a focused approach across four system drivers over the next five years. EU policymakers need a clear, integrated strategy that builds on the European Green Deal, establishing cohesive policies, strategic financing, and aligned incentives to accelerate this shift. Here’s what this focus involves:?

• Policy and governance: Transitioning to a circular economy requires a robust, cohesive policy framework that places circularity at the centre of EU economic strategy. Clear targets, metrics, and standards will enable consistent progress across Member States, helping the EU shift from linear to circular models. An industrial strategy that builds on Europe’s competitive sustainability strengths will be a vital part of the new Industrial Deal.?

• Capital allocation: To drive circular economy reforms, both public and private funding are essential, but access remains limited. Persistent linear mindsets among investors and complex requirements for EU funding continue to limit financial support. Strategic public investments in circular infrastructure and incentives to de-risk private investments are essential to broaden funding access.?

• Market demand: Overcoming both supply-side and demand-side challenges is key to advancing the circular economy. High transition costs and limited demand for circular products persist. Encouraging demand through innovation, recycled content mandates, and increased funding for research and development will help create lead markets for circular products and drive momentum.?

• Societal engagement: A fair, effective transition requires broad societal participation. Supporting sustainable consumer choices, ensuring that circular jobs are high-quality roles, and providing upskilling and reskilling opportunities will make circularity accessible and beneficial across all sectors.?

As Enrico Letta noted , “Circular economy is the only possibility of saving the planet and changing the paradigm of present manufacturing”, and if we are to reach this ambition, there is no time to waste!?

For a deeper dive, read our report and recommendations here .??

What steps do you think are most critical for the EU to prioritise in its circular economy transition in the next five years? Let us know your thoughts below!?