Summary: The EU Circular Economy Act (CEA) is not law yet. The European Commission ran its consultation from August 1 to November 6, 2025, and plans to table the proposal in the second half of 2026 (the Commission work programme says Q4 2026). The Act is meant to create a single market for secondary raw materials, harmonise end-of-waste rules, and tackle fragmented extended producer responsibility (EPR) schemes. Binding duties will only follow after Parliament and Council agree the text, so no CEA obligation applies to your business today. Obligations that already apply sit in other laws, such as the Packaging and Packaging Waste Regulation (PPWR, main obligations from August 12, 2026) and the Ecodesign for Sustainable Products Regulation (ESPR).
What is the EU Circular Economy Act, and is it in force?
The Circular Economy Act is a planned EU law, and it is not in force: the Commission has announced it but has not yet had it adopted by Parliament and Council. The European Commission opened its consultation and call for evidence on August 1, 2025. Feedback closed on November 6, 2025. The proposal is scheduled for the second half of 2026, and some Brussels briefings point to September, while the official work programme says Q4 2026.
After the proposal, the ordinary legislative procedure begins. That usually takes well over a year. Whatever the Act finally requires, expect application dates in 2028 or later.
What problem is the Act trying to solve?
It targets stagnant circularity and a fragmented market for recycled materials. According to the Commission’s call for evidence, the EU circular material use rate rose only from 10.7% in 2010 to 11.8% in 2023. Electronic waste grows by about 2% a year, yet only around 40% is recycled.
Divergent national waste definitions and end-of-waste criteria make it hard to move recyclates across borders. National EPR schemes add more friction. The Commission has signalled that it wants to address both, including through a digital one-stop shop for registration and reporting. The EU’s own Clean Industrial Deal frames the ambition as raising circularity from about 12% to 24% by 2030. Treat that as a policy target, not a binding company-level quota.
What is the Act expected to contain?
The consultation documents point to several building blocks, but none is final:
- A single market for secondary raw materials: harmonised end-of-waste criteria and easier cross-border movement of waste and recyclates.
- Demand-side measures: mandatory criteria for circular public procurement and possibly recycled-content requirements for selected products.
- EPR simplification: less fragmentation between national schemes, with a possible digital one-stop shop.
- E-waste and critical raw materials: measures to raise recovery of materials from electronics and batteries.
Claims that the Act will “mandate” specific recovery rates or quotas go beyond what the Commission has published. We will update this post when the proposal text appears.
How does the Act fit with the Competitiveness Compass?
It is one of the tools the Commission names for the Compass and the Clean Industrial Deal. The Competitiveness Compass, shaped by the Draghi report, rests on closing the innovation gap, a joint roadmap for decarbonisation and competitiveness, and reducing dependencies. Circularity serves the third pillar most directly. The EU depends on third countries, above all China, for most of its heavy rare earths. Recovering critical raw materials from e-waste and batteries is one way to cut that exposure. Scaling the market for secondary materials can also lower feedstock and energy costs for steel, chemicals and metals.
What already applies to your business today?
Several circularity duties are already law, and they matter more for 2026 compliance than the Act itself.
- EU, PPWR: the main obligations apply from August 12, 2026.
- EU, ESPR and Digital Product Passport (DPP): the DPP comes from the ESPR, not from the CEA. The DPP registry went live on July 20, 2026, but no delegated act sets product-specific requirements yet. The textile act is expected in 2027. The ban on destroying unsold apparel has applied to large companies since July 19, 2026.
- Germany: the Kreislaufwirtschaftsgesetz (KrWG) and the Verpackungsgesetz (VerpackG). Producers must register in the LUCID packaging register, and unregistered packaging cannot be sold. ElektroG covers electrical equipment.
- UK: packaging EPR under the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, and a deposit return scheme for drinks containers planned for 2027.
- US: no federal EPR law. State laws lead, including California’s SB 54 on packaging and plastics, plus packaging EPR laws in states such as Oregon and Colorado.
- Canada: provincial EPR programmes, for example Ontario’s Blue Box regulation, plus the federal single-use plastics prohibitions.
For the detail on producer duties, read our guide to extended producer responsibility in 2026. For the plastics side, see how the Global Plastics Treaty process could shape packaging rules.
Where are the investment opportunities?
The clearest opportunities lie in recycling capacity, material recovery from e-waste and batteries, and data infrastructure for product traceability. The Commission’s own diagnosis, a fragmented market and low recycling rates, points to unmet demand. Public funding such as InvestEU and the Innovation Fund can support circular projects, but eligibility depends on each call, so check the current terms before planning around them.
How should businesses prepare before the proposal lands?
Prepare for the laws that already apply, and keep watching the CEA. Practical steps:
- Close PPWR gaps now: main obligations apply from August 12, 2026.
- Map product data: material composition and supplier data will feed the DPP once delegated acts arrive.
- Assess secondary-material supply: test whether recycled inputs meet your quality needs, in case recycled-content requirements follow.
- Track the proposal: contribute through trade associations while the Commission and Parliament refine the text.
Frequently Asked Questions
When will the Circular Economy Act apply?
No date is fixed. The Commission plans to propose it in the second half of 2026, and legislative negotiations normally take a year or more, so binding application is unlikely before 2028.
Does the Act apply to companies outside the EU?
Probably to those selling products into the EU, as with most EU product rules, but the scope is not published yet. UK, US and Canadian exporters should watch the proposal text.
Is the Digital Product Passport part of the Circular Economy Act?
No. The DPP is set up under the ESPR. The CEA may build on it, but product-specific DPP requirements still depend on ESPR delegated acts, which have not been adopted for any product group.
Is the 24% circularity target legally binding on companies?
No. It is an EU-level policy ambition from the Clean Industrial Deal. Company duties will come from specific rules such as the PPWR, the ESPR and, later, the CEA.
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