European businesses spend more than twice as much on raw materials as they do on labor or energy, according to EU figures—a structural imbalance that policymakers believe can be addressed by accelerating the shift to a circular economy.
The built environment illustrates both the scale of the challenge and the potential gains. The World Economic Forum estimates that adopting circular practices—such as reuse of demolition materials and large-scale recycling—could reduce the sector’s carbon footprint by up to 75% by 2050 compared to constructing new buildings from virgin resources. Yet today, the Ellen MacArthur Foundation reports that just 20–30% of construction waste is recycled in Europe, while McKinsey & Co. data shows only 1% of demolition materials are reused. For flat glass, recycling rates remain close to zero.
Policymakers are attempting to close this gap. The forthcoming EU Circular Economy Act, due in 2026, aims to double the share of recycled material in the bloc’s economy. By reducing reliance on imported inputs, the legislation is also framed as a competitiveness measure—protecting European supply chains from geopolitical shocks while creating a single market for secondary raw materials. But current regulatory frameworks still create friction. Definitions of “end-of-waste,” inconsistent safety standards, and overlapping rules across member states limit companies’ ability to integrate reclaimed materials at scale.
The financial dimension is equally daunting. Analysts estimate that adapting Europe’s physical and infrastructure assets to a circular model will require €230 billion in upfront investment. Advocates argue the long-term returns justify the cost: the circular economy could generate €1.5 trillion in economic value by 2040 through new markets, reduced material expenditure, and lower emissions. Governments are already experimenting with incentive structures. Denmark’s deposit-refund scheme, which has driven a 93% recycling rate for bottles and cans, demonstrates how modest consumer-facing policies can have system-wide impact.
Corporate initiatives are beginning to align with this policy trajectory. Companies like VELUX are piloting reverse logistics and service-based business models: collecting and disassembling used roof windows in the Netherlands, extending the lifespan of decades-old installations in Denmark, and integrating maintenance programs in Germany. Such projects underscore that circularity is not limited to product design but extends across service models and supply chain management.
Global networks are amplifying these efforts. The World Economic Forum’s Global Lighthouse Network, which highlights firms deploying advanced manufacturing and circular practices, points to early adopters who are simultaneously improving competitiveness and lowering environmental impact. The lesson emerging is that circularity is less an environmental add-on than a structural shift in how value is created and maintained.
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The post Unlocking Cost Savings and Sustainability Through Circular Construction first appeared on www.circularbusinessreview.com.
