Circular Economy
Definition
A circular economy is an economic model that eliminates waste and maximises resource use by designing products for longevity, reuse, repair, and recycling — replacing the traditional linear "take, make, dispose" model.
Why the EU is building its entire regulatory framework around this
The circular economy is not a side project. It is the central organising principle behind the EU's product regulation strategy, and every major regulation on this platform — from ESPR to the Battery Regulation to PPWR — is an implementation mechanism for it.
The logic is straightforward:
- The European Climate Law (EU 2021/1119) sets a legally binding target for the EU to reach net-zero greenhouse gas emissions by 2050
- Product manufacturing, use, and disposal account for a significant share of EU emissions and resource consumption
- A circular economy — where products last longer, get repaired, and are recycled into new materials — reduces both emissions and resource extraction
- To make circularity verifiable and enforceable, the EU needs product-level data on materials, durability, recyclability, and carbon footprint
- That data infrastructure is the Digital Product Passport
This is why the EU's Circular Economy Action Plan (CEAP) directly created the ESPR and the DPP concept. One cannot exist without the other.
The EU Circular Economy Action Plan (CEAP)
Adopted on 11 March 2020 as a pillar of the European Green Deal, the CEAP sets the strategic direction:
- Make sustainable products the norm in the EU
- Focus on the most resource-intensive sectors: electronics, batteries, packaging, plastics, textiles, construction, food
- Establish product-level information requirements (which became the DPP)
- Strengthen consumer rights to repair and access product information
- Create a market for secondary raw materials
Every regulation profiled on norruva.org traces back to this plan.
Scale of EU investment
The EU is backing the circular economy transition with substantial funding:
- European Green Deal Investment Plan: over 1 trillion mobilised for green transition (2020-2030)
- Horizon Europe: 95.5 billion research budget, with dedicated circular economy and DPP funding (CIRPASS, Battery Pass projects)
- NextGenerationEU: 37% minimum of each national recovery plan must go to green objectives
- InvestEU: 26.2 billion in EU guarantees, with a dedicated sustainable infrastructure window
- Innovation Fund: funded from EU Emissions Trading System revenue, supporting circular manufacturing
This is not a regulation without resources. The EU is funding the tools, standards, and infrastructure to make circularity work.
Related terms
- Digital Product Passport (DPP) — the data layer that makes circularity verifiable
- Ecodesign — designing products for circularity from the start
- European Green Deal — the overarching policy framework
- Net Zero 2050 — the legally binding climate target driving all of this