Dr Piotr Sosnowski from the Faculty of Management, University of Lodz comments on the topic.
According to the Circularity Gap Report 2023, the global economy is only 7.2% circular, down from 9.1% in 2018. In recent months, the European Union has begun to withdraw from some of the Green Deal commitments, while in the US, Donald Trump's return to power in 2025 could mean another wave of environmental deregulation. At the same time, rising living costs are influencing consumer choices, who are increasingly less likely to choose pro-environmental products. Companies that recently boasted of a strategy based on the circular economy are beginning to revise their goals. In the face of these challenges, the question arises: does the circular economy still have a future?
The circular economy is an economic model that assumes reducing waste through closed material circulation. It is a response to the traditional linear economy model, based on the "take – use – throw away" scheme. Thanks to the principles such as reduction, reuse and recycling, it is possible to reduce the demand for raw materials, reduce CO₂ emissions and create new jobs. According to the Circularity Gap Report 2020, implementing the circular economy has the potential to reduce global greenhouse gas emissions by 39% and reduce the consumption of primary raw materials by 28%.
One of the countries that has gone the furthest in the transformation to a circular model is the Netherlands. As a pioneer in this area, Amsterdam is conducting research projects into new ways of recycling and reusing materials. The Netherlands' goal is to completely switch to a closed-loop system by 2050. However, not all countries are following suit.
The Green Deal, a set of regulations aimed at achieving climate neutrality by 2050, was one of the key pillars of sustainable development in the European Union. However, in recent months, serious problems have arisen with its implementation. Farmers in many countries are protesting against new regulations that increase production costs. The automotive industry, represented by companies such as Volkswagen and Stellantis, is pushing for an easing CO₂ restrictions.
Governments in some EU member states, including Germany, under pressure from industry and farmers, have begun to delay the introduction of new regulations related to the European Green Deal. The Federation of German Industries (BDI) has called on the government in Berlin to focus on economic growth when creating climate policy, suggesting a correction to the assumptions of the Green Deal. In addition, EU countries in the EU Council have approved changes to the Common Agricultural Policy, abolishing some requirements related to the decarbonisation of agriculture, such as the obligation to set aside land. These actions indicate growing pressure to adapt ambitious climate goals to current economic and social realities. This is a signal that the ambitious goals of the Green Deal may be difficult to achieve in the current economic and political conditions.
There are also alarming signals coming from the US. During Donald Trump's presidency, the US withdrew from the Paris Agreement and eliminated over 125 environmental regulations. The Joe Biden administration has reversed some of these decisions, but Donald Trump's return to power in 2025 may once again halt pro-environmental policies. We can expect plastic straws and coal to once again become symbols of American independence. The US also has a huge problem with recycling – only 9% of plastic is recycled, while the rest ends up in landfills or is exported to Southeast Asian countries.
Consumer attitudes are also changing. In the face of inflation and rising living costs, people are increasingly less likely to choose pro-environmental products, which are often more expensive than traditional alternatives. According to the EY Future Consumer Index, 67% of consumers stated that high prices significantly discouraged them from buying pro-environmental products. At the same time, according to the “Circular Voice” report prepared by Stena Recycling, 80% of Polish consumers consider it important for manufacturers to use recycled materials in their products.
Given all these changes, the circular economy has indeed reached a crossroads. It is like a diet – everyone agrees that it is worth it, but when push comes to shove, it is hard to give up quick and convenient solutions. On the one hand, its advantages are undeniable – it can reduce the consumption of raw materials, limit CO₂ emissions and create new jobs. On the other hand, political and economic realities are causing many countries and companies to start withdrawing from it. The question remains whether the circular economy will survive. Much depends on political decisions in the coming years and on whether consumers and businesses are willing to pay higher costs for the good of the environment. If not, we may face a return to an economic model based on mass consumption and waste of resources.
Bibliography:
1. Circular Dutch economy by 2050, 16.02.2025, https://www.government.nl/topics/circular-economy/circular-dutch-economy-by-2050
2. De Ceuvel, 16.02.2025, https://deceuvel.nl/en/
3. de Wit, M., Hoogzaad, J., & von Daniels, C. (2020). Circularity Gap Report 2020. https://www.circle-economy.com/resources/circularity-gap-report-2020
4. Europejski Zielony Ład, 16.02.2025, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_pl
5. Fraser, M., Haigh, L., & Soria, A. C. (2024), Circular Gap Report 2023, https://www.circularity-gap.world/2023
6. Kędzierski, R., Komisja Europejska zmienia kurs? Politico: Możliwy zwrot w sprawie Zielonego Ładu - Money.pl, 17.02.2025 https://www.money.pl/gospodarka/komisja-europejska-zmienia-kurs-politico-mozliwy-zwrot-w-sprawie-zielonego-ladu-7118099873078080a.html
7. OECD (2022), Global Plastics Outlook: Economic Drivers, Environmental Impacts and Policy Options, OECD Publishing, Paris, https://doi.org/10.1787/de747aef-en.
8. Rogers, K. (2022). Future Consumer Index: In crisis, but in control. https://www.ey.com/en_us/insights/consumer-products/future-consumer-index-in-crisis-but-in-control
9. Surdykowska, A. (2022), Polacy oczekują produktów wykonanych z materiałów pochodzących z recyklingu, Stena Recycling. https://www.stenarecycling.com/pl/aktualnoci-publikacje/aktualnosci/2022/8-na-10-polakow-chce-produktow-wykonanych-z-materiaow-pochodzcych-z-recyklingu/
Source: Dr Piotr Sosnowski
Edit: Faculty of Management, University of Lodz