Copenhagen – A dual assessment published by the European Environment Agency (EEA) on April 21, 2026, highlights that Europe’s circular economy ambitions can only become a reality if the transition creates a “win-win” situation for both the business sector and the people. According to the analysis, the key to future success lies in dismantling the barriers that hinder circular business models from scaling, and in ensuring the quality and social fairness of the hundreds of thousands of new jobs being created across the continent.
The Three Dimensions of Scaling and Market Barriers
The EEA’s first major finding indicates that the widespread adoption of circular business models in Europe is not yet evident. Companies and startups that make circularity central to their operations—aiming to reduce environmental and climate pressures—currently encounter significant obstacles when attempting to grow or scale.
According to the Agency’s report, achieving the overarching economic, social, environmental, and climate goals of the EU requires three distinct types of scaling to occur simultaneously:
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Scaling out: Businesses must reach more customers and actively expand into new markets.
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Scaling up: There is a crucial need to help change the structural and regulatory systems within which businesses operate.
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Scaling deep: Policies must enable the cultural and behavioral shifts of citizens and consumers.
Moving Beyond Traditional Waste Management
The briefing emphasizes that most existing circular business models continue to focus predominantly on waste management and end-of-life product handling. The EEA argues that significantly more support is needed to implement alternative models. Solutions that enable extended product lifetimes or promote increased reuse through renting, leasing, and sharing on a broader scale must be prioritized, as these approaches could generate far larger positive impacts.
To enable these emerging circular businesses, specific policy actions are required. The EEA recommends improved regulations that offer a level playing field, promote cost-lowering technological innovations, encourage financing and insurance models friendly to circular businesses, and support social innovation and grassroots projects aimed at changing consumer behavior.
A Booming Job Market with Quality Concerns
The EEA’s second briefing, titled ‘Just transition to a circular economy’, quantifies the labor market and social impacts of this transformation. The data demonstrates significant regional growth:
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Between 2014 and 2023, the number of jobs linked to the circular economy in the EU-27 countries grew by 10 percent.
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This growth means that by 2023, the sector employed approximately 4.4 million people across the European Union.
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Furthermore, according to the EU’s Clean Industrial Deal, Europe’s remanufacturing market alone has the potential to create half a million (500,000) new jobs by 2030.
Despite the job creation boom, the Agency warns of underlying quality risks. While the circular economy is generating new employment, some of these roles are currently low-paid or insecure. Simultaneously, higher-skilled and better-paying roles often benefit already advantaged social groups.
Leena Ylä-Mononen, EEA Executive Director, highlighted the core of the issue: “People must be at the heart of Europe’s circular economy ambitions. This move to circularity will add to our prosperity and emerging circular businesses need a fair playing field, while workers must benefit from decent jobs, skills development and opportunities.” The institution stresses that integrating fairness and inclusion into policymaking is not just an ethical obligation; it strengthens social cohesion, economic resilience, and public trust, all of which are conditions for delivering actual environmental benefits.
Preparing for the EU Circular Economy Act
The assessments published by the EEA are part of the preparatory work for the European Commission’s upcoming EU Circular Economy Act, expected later this year. This legislative package aims to accelerate the transition by establishing a Single Market for secondary raw materials, increasing both the supply and demand for high-quality recycled materials, and ultimately boosting the EU’s economic security, resilience, competitiveness, and decarbonization efforts.
Verified Source:
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Original EEA Press Release: Creating win-win for business and people key to success of circular economy