Priority Actions for the Circular Economy Act

WHY THIS MATTERS

Europe cannot scale circular plastics⁽¹⁾ without clear, predictable policies that unlock investment. Demand remains too weak because fragmented targets and limited acceptance of key technologies continue to undermine the business case for circular plastics.

RECOMMENDED ACTIONS

• Set clear and enforceable sector-specific recycled content targets⁽²⁾ to create an investment-friendly environment for Europe’s plastics ecosystem.
• Reward producers that use circular plastics through public procurement and Extended Producer Responsibility (EPR) bonuses.
• Promote the use of European-made⁽³⁾ circular plastics to compensate for the higher energy and carbon costs faced by EU producers.

WHY THIS MATTERS

EU manufacturers face higher energy and carbon costs, and stricter climate rules that weaken their global competitiveness. Ineffective monitoring and border controls allow mislabelled and non-compliant plastics to enter the Single Market, undermining EU rules and discouraging investment in Europe’s circular plastics ecosystem.

RECOMMENDED ACTIONS

• Mandate imported circular plastics and products to meet EU-equivalent requirements to ensure fair competition and reinforce circularity within the EU.
• Introduce clear customs codes to distinguish fossil-based plastics from circular ones, helping track global flows accurately.
• Create a trade observatory for plastics and chemicals to detect dumping and unfair trade practices before they can cause damage to the EU industry.

WHY THIS MATTERS

The circular transition requires major investment in new technologies and infrastructure. The lack of competitiveness and insufficient policy support across the European plastics value chain are creating a high-risk investment climate. With plant closures and declining output, Europe risks losing the industrial capacity and innovation⁽⁴⁾ needed to scale circular solutions.

RECOMMENDED ACTIONS

• Reinvest all revenues from EU plastics-related levies⁽⁵⁾ into circular infrastructure and innovation.
• Establish a dedicated EU Circularity Fund, including under the Competitiveness Fund, to accelerate innovative technologies and support industrial transformation.
• Ensure all Member States apply indirect cost compensation under the EU ETS to protect existing capacity and support new investments.

WHY THIS MATTERS

Waste and secondary raw materials are still subject to inconsistently applied rules across Europe. This slows recycling, increases costs, and limits companies’ access to the feedstock they need. An effective circular economy hinges on the smooth movement of waste and harmonised rules across all Member States.

RECOMMENDED ACTIONS

• Adopt EU-wide End-of-Waste criteria⁽⁶⁾ for all recycling technologies, giving companies legal certainty about how recycling outputs can be traded and used⁽⁷⁾.
• Use mutual recognition of national End-of-Waste rules as a bridge until the EU-wide system is in place.
• Simplify and harmonise procedures for intra-EU waste shipments on secondary legislation of the Waste Shipment Regulation, especially for plastic waste with known composition and market demand, so it moves efficiently to where it can be processed.

WHY THIS MATTERS

The value of plastic waste as a resource remains largely under recognised. In 2024, 32.7 million tonnes of post-consumer plastic waste were collected in Europe, yet only 29.6% (9.7 million tonnes) was recycled, while 70.4% (23 million tonnes) was incinerated or landfilled⁽⁸⁾. Illegal waste exports driven by fraud and free riding⁽⁹⁾ further undermine EU efforts.

RECOMMENDED ACTIONS

• Ban the landfilling and incineration of recyclable plastics⁽¹⁰⁾, ensuring valuable materials stay in the EU economy.
• Include municipal waste incineration in the 2026 ETS review to better reflect climate impacts and encourage recycling.
• Increase inspections and enforcement actions to stop illegal exports and keep valuable materials within Europe.

WHY THIS MATTERS

Europe’s circular transition requires stronger coordination across borders, harmonised rules, and better understanding of plastics and recycling. Today, EPR systems vary widely across Member States, and many still lack the infrastructure needed for efficient waste management. Without better governance and alignment, progress will remain fragmented and inefficient.

RECOMMENDED ACTIONS

• Create harmonised EU wide EPR frameworks, replacing national databases with a unified EU-wide registration system to reduce administrative burdens and streamline compliance.
• Ensure upcoming digital instruments (e.g., Digital Product Passport) are user-friendly and do not create new barriers for companies, especially SMEs.
• Establish Trans-Regional Circularity Hubs that allow waste to move to the best-suited recycling facilities within EU borders.