Creating win-win for business and people key to success of circular economy

Types of scaling

Growing circular businesses - scaling up, out and deep - remains one of the key challenges.

The widespread adoption and scaling of circular business models in Europe is not yet evident. There are several ways of scaling:

• scaling out by reaching more customers and expanding to new markets;
• Scaling up by helping change the structures business operate within; and
• scaling deep by enabling cultural and behavioural shifts of citizens and costumers.

The briefing argues that these types of scaling are needed if Europe's circular economy ambitions are to be met and for the EU to meet overarching economic, social, environmental and climate goals.

Way ahead

Most circular business models continue to focus predominantly on waste management and end-of-life product handling. More support is needed to implement and scale also other types of circular business models, such as those that enable extended product lifetimes, or those that promote increased reuse through renting, leasing or sharing on a broader scale that could generate larger impacts.

Similarly more actions must be done to enable emerging circular businesses, including through improved regulation and other policies that promote those business models that adapt circularity and offer a level playing field, promoting technological innovation that lowers costs, promoting financing and insurance that is friendly to circular businesses and promoting social innovation and grassroot projects to help change consumer behaviours.

Fair and just circular jobs

A separate EEA briefing 'Just transition to a circular economy' shows how integrating justice into circular economy policies can strengthen environmental and social outcomes. This will be important as a growing circular economy will lead to changes in Europe's jobs market.

Between 2014 and 2023, the number of jobs linked to the circular economy in the EU-27 grew by 10% to around 4.4 million, according to the EEA briefing. While the circular economy creates new jobs, some are low-paid or insecure, and higher-skilled roles often benefit already advantaged groups, highlighting the need to improve job quality, strengthen skills development and ensure more inclusive access to opportunities.

Circular economy policies are most effective when fairness, inclusion and broad participation are integrated throughout their design and implementation. These elements strengthen social cohesion, economic resilience and public trust, creating the conditions for effective implementation and the delivery of environmental benefits.

More information

The EEA circular economy briefings are the first two in a series of reports the EEA is producing this year ahead of the Commission's EU Circular Economy Act which aims to accelerate the transition to a more circular economy for Europe.

It aims to establish a Single Market for secondary raw materials, increase the supply of high-quality recycled materials and stimulate demand for these materials in the EU which in turn will help to boost the EU's economic security, resilience, competitiveness and decarbonisation.

The scaling business models in Europe briefing builds on an underpinning report from the European Topic Centre on Circular Economy and Resource Use.

The just transition to a circular economy briefing is based on three reports from the European Topic Centre on Circular Economy and Resource Use on a just circular economy; on operational frameworks and indicators; and on jobs, skills, and workforce inclusion.