The European Union used 12.2% recycled materials in 2024, the highest circular material use rate on record, but only marginally above the previous year and just one percentage point higher than in 2015.
Reaching the EU’s target of roughly doubling circular material use by 2030 will therefore require more than expanding recycling capacity inside the bloc. It will require Europe to address the international supply chains through which products, waste and secondary raw materials actually move.
That challenge is becoming central to the European Commission’s Circular Economy Act, which is scheduled for adoption in 2026. The legislation is intended to establish a Single Market for secondary raw materials, increase the availability of high quality recycled materials and stimulate demand for them across the EU. The Commission has also explicitly linked the initiative to economic security, competitiveness and reducing dependence on imported raw materials.
Those objectives address a genuine industrial vulnerability. But the structure of Europe’s circular economy cannot be understood solely through what happens within EU borders. Many of the products entering European markets are manufactured elsewhere, while the collection, sorting, repair and recycling systems needed to make those products circular often sit in the countries where production takes place.
That creates a policy problem for Brussels. Rules covering recycled content, product information, producer responsibility, waste shipments and secondary materials can be designed in Europe, but their effectiveness depends partly on systems outside the bloc.
The EU’s circular material use rate has increased substantially over the longer term, from 9.1% in 2008 to 12.2% in 2024. Yet progress has been slow in recent years. The rate increased by only 0.1 percentage points between 2023 and 2024. At the same time, performance differs sharply between member states. The Netherlands reached 32.7% in 2024, compared with 1.3% in Romania.
The Commission’s objective is to reach about 24% by 2030. Achieving that would require a much faster increase than Europe has delivered over the past decade.
The pressure is particularly relevant for sectors such as textiles, plastics and electronics, where European consumption is embedded in global production networks.
Bangladesh illustrates the problem. As the world’s second largest garment exporter, the country is a major source of textile products entering European value chains and generates substantial volumes of pre consumer textile waste. SWITCH2CE, a program implemented by the United Nations Industrial Development Organization and co funded by the EU and Finland, has been examining how that waste can become part of more formal circular value chains.
The project’s research also highlights a problem that European policy can easily miss: circular systems frequently depend on informal actors.
In Bangladesh’s garment industry, waste known locally as Jhut moves through networks of factories, collectors, traders and recyclers. SWITCH2CE research found that transactions often lack formal contracts and that there is no established regulatory framework clearly defining waste ownership across the supply chain. Tax and customs arrangements can also make recycling less competitive. The research identifies a 7.5% VAT on the collection and sale of textile waste by spinning mills and a combined VAT burden of 22.5% on certain Jhut transactions as barriers to investment in recycling.
This matters for the EU because a European recycled content requirement does not automatically create a European supply of recycled material. If the material originates in a manufacturing country, the collection and processing infrastructure there becomes part of Europe’s circular supply chain.
The EU’s Ecodesign for Sustainable Products Regulation establishes the framework for Digital Product Passports, which are intended to provide information about products and their sustainability characteristics across their life cycle. The objective is to make information on issues such as materials, durability and repairability more accessible to businesses and consumers.
But a passport does not create reliable information by itself. Data quality depends on the companies, suppliers, recyclers and waste handlers that generate and update it.
This becomes particularly complicated when a product crosses several jurisdictions before reaching a European consumer. Material composition may be recorded by a manufacturer in one country, assembly may occur in another, the product may enter Europe through a third country and its end of life may ultimately be managed somewhere else.
A system built primarily around European reporting requirements could therefore produce a highly standardized interface while retaining inconsistent data underneath.
The international dimension is already visible in SWITCH2CE’s work. Its projects bring European companies together with suppliers, governments and other stakeholders in developing economies to test circular business models before they are scaled. The project’s focus includes plastics packaging, textiles and garments, and ICT and electronics.
That approach is particularly relevant to digital product passports because the information architecture needs to function across the entire value chain rather than only at the point where a product enters the EU market.
The role of informal waste workers is another area where a Brussels centered approach could produce unintended consequences.
In many developing economies, informal collectors and traders already perform functions that formal waste management systems have not fully replaced. Their networks can determine whether valuable materials are recovered or lost to disposal.
SWITCH2CE has explicitly examined the position of waste handlers in Bangladesh’s textile sector, recognizing their role in the transition toward more circular systems.
The policy challenge is therefore not simply to formalize those activities. Formalization without a viable economic model could remove existing collection capacity without creating an equivalent replacement.
The Bangladesh case instead points toward a more complicated solution: improve traceability and working conditions, clarify ownership, create viable recycling economics and connect informal operators with formal value chains where appropriate.
For European policymakers, this means that compliance mechanisms need to reflect how materials actually move through producer countries. A rule that assumes a fully formalized collection system may work on paper while excluding the actors responsible for recovering a significant share of the available material.
Electronics provides a different example of why environmental objectives alone are unlikely to create circular markets.
The SWITCH2CE One Circle pilot in Egypt has focused on repair, refurbishment and formal e waste management for mobile devices and network equipment. By the end of 2025, the initiative had repaired and reused more than 400 network modules, sold more than 1,300 refurbished smartphones through Orange Egypt and collected more than 10,000 kilograms of electronic waste through formal channels.
The project demonstrates that circularity can be built around existing commercial activities rather than treating recycling as an isolated environmental service.
The economic dimension is important because consumers and businesses ultimately determine whether products remain in circulation. Refurbished devices need to be reliable, competitively priced and supported by warranties. Repair businesses need access to parts and technical skills. Recyclers need sufficient material volumes and predictable economics.
The Egyptian experience has consequently moved beyond waste collection toward an integrated system involving repair, refurbishment, resale and formal treatment. The project is expanding these activities in 2026 while also supporting regulatory development.
For the EU, that suggests a broader interpretation of circularity. Demand for recycled feedstock is important, but extending product lifetimes can reduce the volume of material entering waste streams in the first place.
The EU has considerable regulatory influence because companies that want access to its large consumer market have strong incentives to comply with European product standards. That dynamic has helped extend EU environmental requirements beyond the bloc.
Circularity, however, creates a different challenge because the policy objective depends on physical systems outside Europe.
A recycled content requirement can create demand, but producers need access to suitable recycled feedstock. A Digital Product Passport can improve transparency, but suppliers need compatible data systems. Extended producer responsibility can assign obligations to manufacturers, but collection and recycling networks still have to exist where products and production waste are generated.
The Commission itself has recognized the need for global engagement. Its Clean Industrial Deal describes reliable international partnerships as important to European resilience and links circularity with efforts to diversify supply chains and reduce dependencies.
The question is whether that international dimension will become embedded in the Circular Economy Act itself.
The Commission’s April 2026 stakeholder workshop on the legislation highlighted measures aimed at reducing dependence on imported critical raw materials, simplifying the regulatory framework for secondary raw materials and improving access to circular feedstocks within the Single Market. The Commission has also been consulting stakeholders throughout the impact assessment process.
Those measures could materially improve Europe’s internal market for secondary materials. But they will not by themselves resolve the cross border problems that determine whether those materials can be collected, processed, certified and traded in the first place.
The next stage of EU circular economy policy therefore has to move in two directions simultaneously. Europe needs stronger internal markets for secondary materials, while its trade and industrial relationships with producer countries need to support the infrastructure and data systems that make those materials available.
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