{"id":18955,"date":"2026-05-25T10:33:53","date_gmt":"2026-05-25T08:33:53","guid":{"rendered":"https:\/\/ultimabozza.it\/circular-economy-inertia-costs-84-billion-a-year\/"},"modified":"2026-05-25T12:40:31","modified_gmt":"2026-05-25T10:40:31","slug":"circular-economy-inertia-costs-84-billion-a-year","status":"publish","type":"post","link":"https:\/\/ultimabozza.it\/en\/circular-economy-inertia-costs-84-billion-a-year\/","title":{"rendered":"Circular economy, inertia costs 84 billion a year"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\" id=\"h-\">Europe is lagging behind. Not by a small margin, and not on a minor objective: <strong>the transition to the<a href=\"https:\/\/ultimabozza.it\/en\/circular-economy-can-reduce-eus-climate-impact-by-22-percent\/\">circular economy<\/a><\/strong>, one of the pillars of the continent&#8217;s industrial competitiveness, is <strong>proceeding at a speed that is light years away from what is required<\/strong>. This is certified by a report by the European Environment Agency (EEA), <em><a href=\"https:\/\/www.eea.europa.eu\/en\/analysis\/publications\/unlocking-the-circular-economy-investment-needs-barriers-and-enabling-conditions\">Unlocking the circular economy: investment needs, barriers and enabling conditions<\/a><\/em>. And each year of inaction costs an estimated 84.5 billion euros in lost benefits.   <\/p>\n\n<h3 id=\"h-il-ritardo-che-pesa\" class=\"wp-block-heading\">The delay that weighs<\/h3>\n\n<p class=\"wp-block-paragraph\">The circular material use rate in the EU grew by just 1.5 percentage points between 2010 and 2024. A result that clashes with the <a href=\"https:\/\/commission.europa.eu\/topics\/competitiveness\/clean-industrial-deal_en\">Clean Industrial Deal<\/a> &#8216;s goal of raising this indicator to 24 percent by 2030, which would require doubling it from current levels. Linear economic models-high demand for raw materials, short-lived products, waste growth-continue to dominate the European market despite years of national strategies and community action plans.  <\/p>\n\n<p class=\"wp-block-paragraph\">The problem is not the lack of policies, but their implementation. Most member states have national strategies for the circular economy, but implementation is weak, uneven and focused mainly on the waste and recycling side. Private investment in the sector has stabilized at around 0.8 percent of GDP since 2019, without significant acceleration despite the strengthening of the regulatory framework.  <\/p>\n\n<h3 id=\"h-il-divario-da-colmare\" class=\"wp-block-heading\">The gap to be bridged<\/h3>\n\n<p class=\"wp-block-paragraph\">To fully implement the circular economy policies already adopted by the EU would require an additional \u20ac82 billion each year until 2040. This is a 68 percent increase over current investment levels, or 2 percent of all annual investment in the European economy. <\/p>\n\n<p class=\"wp-block-paragraph\">The report devotes ample space to structural barriers holding back investment, distinguishing between those of a financial and economic nature.<\/p>\n\n<p class=\"wp-block-paragraph\">On the financial front, one of the main issues is the inadequacy of definitions used by financial institutions. Sustainability reporting standards still do not allow the benefits of circular models to be fully quantified. Added to this is the fragmentation of the single market: a second matter classified as &#8220;waste&#8221; in one member country may be considered a &#8220;product&#8221; in another, making it impossible to achieve the economies of scale needed for cross-border circular markets.  <\/p>\n\n<p class=\"wp-block-paragraph\">On the economic front, the underlying problem is that the environmental and social costs of linear production are not incorporated into market prices. This &#8220;unpriced externality&#8221; creates a persistent cost advantage for linear models over circular ones, reducing the attractiveness of circular investments for private investors. This is compounded by inadequate tax incentives: VAT is applied twice to the same used products, making second-hand goods relatively more expensive than new ones; repair, reuse and remanufacturing activities do not benefit from significant tax breaks; and fossil fuel subsidies artificially lower the cost of virgin raw materials.  <\/p>\n\n<h3 id=\"h-le-leve-per-accelerare\" class=\"wp-block-heading\">Levers to accelerate<\/h3>\n\n<p class=\"wp-block-paragraph\">The report does not limit itself to diagnosis but points to the tools available to unlock the transition, all along the product value chain.<\/p>\n\n<p class=\"wp-block-paragraph\">Upstream, at the design and production stage,differentiated taxation that penalizes the use of virgin raw materials and rewards the use of recycled materials can help level the playing field.<\/p>\n\n<p class=\"wp-block-paragraph\">In the mid-chain, in-use phase, and in product life extension, repair vouchers and dedicated industry funds can make repairable products more affordable for consumers.<\/p>\n\n<p class=\"wp-block-paragraph\">Downstream-in collection, recovery, and recycling-taxes on landfills and incineration discourage final disposal. Taxes on waste exports could finance domestic recycling capacity. <\/p>\n\n<p class=\"wp-block-paragraph\">Doubling the rate of circular material use could increase European GDP by 0.5 percent by 2030. The European remanufacturing market could grow from 31 billion today to 100 billion by the same date. The transition could generate up to 700,000 new jobs in the repair, remanufacturing and recycling sectors.  <\/p>\n\n<p class=\"wp-block-paragraph\">These are numbers that speak for themselves. <strong>The circular economy<\/strong> is not an additional cost imposed on businesses by environmental <strong>regulation-it is one of the most concrete economic opportunities facing Europe<\/strong>. The question is not whether to invest, but how to do it in a coordinated, rapid and sufficiently ambitious way. <\/p>\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>European Environment Agency report: additional 82 billion needed every year until 2040. But the cost of not doing so is higher <\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"googlesitekit_rrm_CAowscnaCw:productID":"","_app_feed_target":"","footnotes":""},"categories":[1612],"tags":[2181],"class_list":["post-18955","post","type-post","status-publish","format-standard","hentry","category-circular-economy","tag-circular-economy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.5 (Yoast SEO v26.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Circular economy, inertia costs 84 billion a year &#8226; Ultima Bozza<\/title>\n<meta name=\"description\" content=\"European Environment Agency report: additional 82 billion needed every year until 2040. 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