European Union seeking input on proposed Circular Economy Act – ESG Dive

Report on the European Union’s Proposed Circular Economy Act and its Alignment with Sustainable Development Goals

Introduction: Advancing the 2030 Agenda through Circularity

The European Commission has initiated a public consultation process, termed a “call for evidence,” for a forthcoming Circular Economy Act (CEA). This legislative proposal, scheduled for finalization in the fourth quarter of 2026, represents a significant step in the European Union’s commitment to the Sustainable Development Goals (SDGs), particularly SDG 12 (Responsible Consumption and Production). As a core component of the EU’s Clean Industrial Deal, the CEA aims to fundamentally reshape the European market to align with principles of sustainability and resource efficiency.

Core Objectives and SDG Alignment

The primary motivations for the CEA are to address market fragmentation and enhance the region’s progress towards key sustainability targets. The Act’s objectives are directly linked to several SDGs:

1. Unifying the Market for Circularity: The CEA seeks to establish a single European market for circular products, secondary materials, and waste. This supports SDG 9 (Industry, Innovation, and Infrastructure) by creating resilient and sustainable infrastructure and fostering industrial modernization.
2. Increasing Material Circularity: A central goal is to achieve 24% material circularity within the EU by 2030. This directly addresses SDG 12.5, which calls for substantially reducing waste generation through prevention, reduction, recycling, and reuse.
3. Enhancing Competitiveness of Secondary Materials: The Act aims to resolve the economic disparity where recycled materials are often more expensive than virgin materials. By improving the economic viability of recycling, the CEA promotes sustainable economic models in line with SDG 8 (Decent Work and Economic Growth).
4. Supporting a Sustainable Industrial Framework: The CEA is designed to reinforce other key EU initiatives, including the Waste Framework Directive, the Ecodesign for Sustainable Products Regulation, and the Packaging and Packaging Waste Regulation. This integrated approach creates a robust policy environment for achieving SDG 12.

Strategic Focus Areas and Policy Mechanisms

The proposal identifies several key areas for intervention to accelerate the transition to a circular economy.

• Electronic Waste Management: A priority will be placed on improving the collection and recycling of electronic waste, of which less than 40% is currently recycled in the EU. This focus is critical for achieving SDG 11 (Sustainable Cities and Communities) by improving urban waste management and SDG 12 by addressing a hazardous and resource-rich waste stream.
• Extended Producer Responsibility (EPR): The CEA may introduce modifications to EPR schemes. These schemes are a vital policy tool for implementing the principles of SDG 12, ensuring that producers bear responsibility for the entire lifecycle of their products.
• Critical and Secondary Raw Materials: The Act intends to create conditions that make the domestic recycling of critical raw materials more attractive than their export. This measure supports the Critical Raw Materials Act and contributes to resource security, a key aspect of SDG 9 and SDG 12. There is consideration for “export monitoring” of strategic secondary raw materials to manage supply and demand imbalances.

Stakeholder Perspectives and Global Implications

The development of the CEA involves extensive stakeholder engagement and carries significant international implications, reflecting the interconnected nature of SDG 17 (Partnerships for the Goals).

• Industry Concerns: European recycling industry confederations have voiced concerns over market distortion caused by low-cost imports of virgin and recycled plastics from countries with lower environmental and labor standards. They argue that addressing this threat is urgent to protect the EU’s domestic recycling industry and ensure progress towards SDG 8 and SDG 12.
• Public Consultation Process: The Commission has invited input from all stakeholders, including businesses, NGOs, and third-country trading partners, until November 6. This inclusive approach is fundamental to SDG 17, ensuring that diverse perspectives inform the final legislation. An impact assessment will specifically consider effects on small and medium-sized enterprises, competitiveness, and international trade.

SDGs Addressed in the Article

• SDG 8: Decent Work and Economic Growth – The article discusses the economic aspects of the circular economy, including the cost competitiveness of recycled materials versus virgin materials, the impact on small and medium-sized enterprises, and the overall competitiveness of the EU market.
• SDG 9: Industry, Innovation, and Infrastructure – The focus on the “Clean Industrial Deal,” creating a “single European market for circular products,” and supporting initiatives like the Ecodesign for Sustainable Products Regulation directly relates to upgrading industries and fostering innovation for sustainability.
• SDG 12: Responsible Consumption and Production – This is the central theme of the article. The Circular Economy Act (CEA) aims to “minimize waste across its lifecycle,” increase recycling (especially for e-waste), promote the use of secondary raw materials, and establish extended producer responsibility (EPR) schemes.
• SDG 17: Partnerships for the Goals – The article touches upon international trade dynamics, mentioning potential impacts on “third country trading partners,” “export monitoring” of strategic raw materials, and addressing the influx of imports from non-EU countries.

Specific SDG Targets Identified

1. SDG 12: Responsible Consumption and Production

   • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
     • The article states the CEA aims to create products “designed to optimize the resources used” and “reduce feedstock costs” by fostering a larger supply of high-quality recycled materials.
   • Target 12.4: By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle… and significantly reduce their release to air, water and soil…
     • The article highlights that a priority of the CEA is “ensuring collection, recycling and demand for electronic waste” and managing waste through initiatives like the Waste Framework Directive.
   • Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.
     • The CEA’s core purpose is to “minimize waste across its lifecycle.” The article explicitly mentions the goal to increase recycling and make changes to extended producer responsibility (EPR) schemes to manage waste more effectively.
   • Target 12.7: Promote public procurement practices that are sustainable, in accordance with national policies and priorities.
     • The article mentions that the CEA could make changes to “public procurement criteria” to foster the market for secondary raw materials.

2. SDG 8: Decent Work and Economic Growth

   • Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation…
     • The article directly addresses this by citing the EU’s goal to “make 24% of the region’s materials circular by 2030” and tackling the “higher cost of recycled materials” to improve their competitiveness and decouple economic activity from virgin resource extraction.

3. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes…
     • The article describes the CEA as part of the “Clean Industrial Deal,” which is designed to create a “single European market for circular products” and support regulations like the Ecodesign for Sustainable Products Regulation, pushing industries towards cleaner, more efficient processes.

4. SDG 17: Partnerships for the Goals

   • Target 17.11: Significantly increase the exports of developing countries…
     • The article discusses the global trade implications of the CEA, noting it could include “measures to make recycling of critical raw materials waste within the Union more attractive than their export” and explore “export monitoring” and “export restrictions.” This directly impacts trade flows with third countries.

Indicators for Measuring Progress

1. Circular Material Use Rate

   • The article explicitly states a goal to “make 24% of the region’s materials circular by 2030.” This percentage serves as a direct, quantifiable indicator for measuring progress towards a circular economy (relevant to Targets 8.4 and 12.2).

2. Recycling Rate of Specific Waste Streams

   • The article mentions that “less than 40% [of electronic waste] is recycled in the EU.” This figure is a baseline indicator, and tracking its increase would measure progress towards environmentally sound waste management (relevant to Target 12.4).

3. Growth Rate of the Recycling Industry

   • The article cites a report from Plastics Recyclers Europe noting that their industry’s growth “saw slowed growth in 2023, down to 6%, compared to 17% in 2021 and 10% in 2022.” This growth percentage is an economic indicator of the health and expansion of the circular economy sector.

4. Export and Import Data for Secondary Raw Materials

   • The article mentions the need for “export monitoring” of strategic secondary raw materials and concerns about “low-cost, unverified imports of both virgin and recycled plastics.” Data on the volume and value of these trade flows would be a key indicator for assessing market stability and the effectiveness of the CEA’s trade measures (relevant to Target 17.11).

Summary of SDGs, Targets, and Indicators

Source: esgdive.com