Building a circular future: How policies, measures, and models can drive the Green Transition
By Patricia Fortes, NOVA University of Lisbon, and Marianne Zanon Zotin, Utrecht University
The words circular economy are now everywhere, from policy speeches in Brussels to sustainability pledges by global companies. But what does it really mean to move away from a “take–make–dispose” model, and how can this transition help us tackle climate change? The CIRCOMOD project explores this question. Our deliverable, Review of Circular Economy (CE) policy questions, knowledge gaps, and measures, brings together insights from policy frameworks, real-world strategies, and cutting-edge modelling tools. The result is a roadmap to better understand where the circular economy stands in the green transition—and where it can go next.
Why the Circular Economy Matters
The linear economy of extraction, use, and disposal is pushing us beyond planetary boundaries. Half of all global greenhouse gas emissions come from resource extraction and processing. If we are to keep global warming below 1.5°C, we cannot simply switch to renewable energy or deploy carbon removal technologies—we must also radically change how we use products and materials.
This is where the circular economy comes in. By extending product lifetimes, designing smarter, reusing, refurbishing, and recycling, we can reduce both emissions and resource consumption. But turning this vision into reality requires the right mix of policies, practical measures, and robust tools to assess their impacts.
Europe’s Circular Economy Policies: Ambition and Gaps
The European Union has been a pioneer in embedding circularity into its climate neutrality strategy. From the Circular Economy Action Plan to the Right to Repair Directive, Brussels has produced a dense forest of policies. Our review examined 24 major EU laws and regulations since 2000, including the Waste Framework Directive, Packaging Directive, and Ecodesign Directive.
We found a strong focus on recycling. In fact, most directives still target downstream activities like recycling and collection rates. However, smarter product-use policies—such as refusing, rethinking, and reducing—remain underrepresented, even though they hold the greatest potential to cut material footprints.
Priority has been given to electronics, ICT, vehicles, packaging, plastics, textiles, and construction. Yet buildings, despite their massive footprint, remain underregulated. Most indicators and targets are still biased toward recycling rates, with limited metrics on consumption reduction or wellbeing impacts. Furthermore, jobs, equity, and wellbeing are rarely integrated into circular economy policy.
What Measures Really Matter?
Our team screened more than 2,000 academic and grey literature studies and conducted a deep analysis of 197 key papers on CE measures with climate relevance. The findings reveal both promising opportunities and persistent gaps:
– Buildings and vehicles: Lifetime extension, lightweighting, material substitution, and reuse of components could deliver major emission reductions.
– Consumer goods: Biodegradable packaging, reuse schemes, and cascading use of bioproducts show potential, though they face barriers to scaling up.
– Infrastructure and machinery: Digitalization, modular design, and reuse of old infrastructure can slow material loops.
– Industrial supply chains (steel, cement, chemicals, aluminium): These “hard-to-abate” sectors require breakthroughs in material efficiency, reuse of industrial by-products, and high-quality recycling.
– Refuse and slowing loops: Strategies such as repair, refurbish, and repurpose remain underexplored, even though they could bring the biggest gains.
Figure 1 : Coverage of sectors and R-strategies of the reviewed studies
Figure 2: Coverage of R-strategies per sector of the reviewed studies. Percentages indicate the share of studies per sector that cover each R-strategy
The Role of Modelling and Data
Understanding the full potential of circular strategies requires more than intuition. This is where modelling and data come in. Advanced tools can simulate material flows, energy use, and greenhouse gas emissions across sectors, helping policymakers anticipate outcomes before implementing measures.
Different models offer different perspectives. Some zoom in on the life cycle of a single product, exposing hidden environmental impacts. Others step back to assess the economy as a whole, tracking how policies ripple through industries and trade. Material flow analysis reveals how steel, cement, and other materials move through products, while integrated assessment models connect climate, energy, and economic systems to show how circular strategies—such as material substitution—contribute to emission reductions. Yet, most still lack detailed representation of materials.
In short, each approach has strengths but also blind spots. No single model can capture the full picture. CIRCOMOD combines these approaches to identify which strategies are most effective and how they interact. This holistic perspective ensures that circular economy policies are not just aspirational but grounded in evidence.
The Role of Modelling and Data
Understanding the full potential of circular strategies requires more than intuition. This is where modelling and data come in. Advanced tools can simulate material flows, energy use, and greenhouse gas emissions across sectors, helping policymakers anticipate outcomes before implementing measures.
Different models offer different perspectives. Some zoom in on the life cycle of a single product, showing the hidden environmental impacts of materials. Others step back to look at the economy as a whole, tracking how policies ripple through industries and trade. Material flow analysis can reveal how steel or cement and other materials moves through products, while integrated assessment models are strong at connecting climate, energy, and economic systems. They can show how circular strategies (for example, substituting materials) link to greenhouse gas reductions and climate targets.but they usually lack detailed representation of materials.
In summary each approach has its strengths, but also blind spots, i.e., no single model can capture the full picture. CIRCOMOD brings together these analytical approaches to map which strategies are most effective, and how they interact. This holistic perspective ensures that circular economy policies are not just aspirational but grounded in evidence.
Our review highlights that circular economy efforts still rely too much on recycling, while more impactful strategies such as refusing, reducing, and extending product lifetimes remain underdeveloped, especially in hard-to-abate sectors like steel, cement, and buildings. Because no single model can capture the full complexity of these transitions, CIRCOMOD is developing an integrated framework that links material, economic, energy, and behavioural perspectives to identify which strategies deliver the greatest climate benefits.
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