Circular Economy: Regulatory obstacles to a circular economy on selected high potential markets

Circular economy systems keep the added value in products for as long as possible and eliminate waste. There are various strategies or options for increasing circularity, e.g. ecodesign, resource efficient processes, remanufacturing, various types of reuse and recycling, industrial symbiosis, cascading, etc. The objective of this study is to identify the most promising potential markets linked to circular economy, which are currently closed or under-performing due to regulatory obstacles or regulatory gaps.

The study

  • Identifies concrete value chains, subsectors, economic activities within priority sectors for the circular economy and gathers economic data to underpin the related market potential.
  • Identifies key areas with the highest potential for economically viable market opportunities and conduct further analysis on regulatory barriers, preventing these markets from full development.
  • Identifies the regulatory framework for the specific areas and analyses the barriers to circularity. It evaluates the functioning of the internal market and potentially lost market opportunities related to these barriers.
  • Provides specific and detailed examples (through case studies) of the barriers’ impacts and the most promising options for resolving them.

The study combines literature, economic data, and experience from actors in the selected economic sectors (business owners, sector representatives, etc.) to analyze the specific regulatory barriers and (policy) options to remove them. The results are complemented with information on other barriers such as market barriers.

Fraunhofer ISI contributed three in-depth case studies: recycling of steel, recycling of copper and recycling of solvents. In the screening process work was also carried out on recycling of plastics and tinplate.

The study confirms that the realization of a circular economy is hampered by legislation. The nature of the different barriers encountered can be summarized in the following categories: (1) the lack of definitions and the occurrence of gaps in legislation, (2) unclear definitions of targets in legislation, (3) the definition of hard numerical limits in legislation, for example, considering the CLP Regulation, (4) lacking or incomplete implementation or enforcement, (5) differing and conflicting national implementations of a legislation, (6) legislations that conflict with each other because they represent conflicting values (e.g. stringent material contamination limits versus the use and uptake of secondary materials). The study recommends, among other things, a harmonization of the internal market for secondary materials and material streams from which those can be recovered to retain value and materials within the European Union. Moreover, it is recommended that product design legislations consider the full-life cycle of the respective products.


08.04.2015 - 08.04.2016


  • European Commission (DG GROW)


  • Fraunhofer ISI

  • Thinkstep

  • Wuppertal Institut für Klima, Umwelt, Energie