The EU Circular Economy Act: What Do We Know So Far?

The European Commission is expected to introduce a Circular Economy Act in 2026, with the objective of strengthening the EU market for secondary raw materials.

While the proposal is still in development, its direction builds on a broader policy framework that is already reshaping how products are designed, used, and managed across their lifecycle.

In a previous article, we explored the implications of the Ecodesign for Sustainable Products Regulation and how it is expanding requirements around durability, repairability, and material transparency. The upcoming Circular Economy Act can be seen as a complementary step - shifting attention from product design to material flows and market conditions.

From Product Requirements to Material Flows

Recent EU legislation has introduced more detailed expectations at product level, including:

• requirements on durability, repairability, and recyclability across a wider range of products (Ecodesign for Sustainable Products Regulation)

• strengthened access to repair and extended product lifetimes (Right to Repair Directive)

• improved access to data on materials and environmental performance (Digital Product Passport)

• strengthened waste management rules, including extended producer responsibility and textile waste requirements (Waste Framework Directive)

Taken together, these developments reflect a gradual shift from waste management toward product-level circularity.

They also place increasing attention on the quality and composition of materials used in products - what is often referred to as material “health.”

This concept sits at the core of the Cradle to Cradle Certified design approach, which has been influential in shaping early circular economy thinking. Within this framework, Material Health and Product Circularity are closely interdependent: the ability to safely circulate materials depends on their composition, just as circular design depends on how materials can be recovered and reused.

The Circular Economy Act is expected to build on this by addressing a related challenge:
how to ensure that materials recovered from products can re-enter the economy at sufficient quality and scale.

Product Design and Material Quality

Although the Circular Economy Act is likely to focus on materials, product design remains closely connected to its objectives.

The way products are designed directly influences whether materials can be recovered, separated, and reused effectively.

For example:

• complex material combinations can limit recyclability

• the presence of certain substances can restrict recovery options

• lack of disassembly can reduce material value at end of use

In this sense, circular material flows depend on decisions made much earlier in the product development process.

Information Flows and Material Value 

The development of circular material markets depends not only on material recovery, but also on access to reliable product information.

The introduction of the Digital Product Passport reflects this need, aiming to make data on materials, environmental performance, and product characteristics more accessible across value chains.

This type of information can support:

• better sorting and recovery processes

• more informed sourcing decisions

• improved traceability of materials

As requirements evolve, the ability to collect, structure, and communicate this data will become increasingly relevant.

Structured Approaches to Product Performance 

In parallel with regulatory developments, companies are adopting more structured approaches to understanding and improving product performance.

The Cradle to Cradle Certified® Product Standard evaluates products across five categories:

• Material Health 

• Product Circularity 

• Clean Air & Climate Protection 

• Water & Soil Stewardship 

• Social Fairness 

As an assessment body for Cradle to Cradle Certified®, Vugge til Vugge works with companies to assess products against these criteria and verify their performance. 

Such frameworks can help organisations align product development with emerging expectations around circularity, material quality, and transparency.

Looking Ahead

The Circular Economy Act is still under development, and further detail will be needed to understand its full implications. However, its anticipated focus on secondary materials highlights an important aspect of the transition to a circular economy: that product design, material quality, and market conditions are closely interrelated. 

For companies operating in the EU, this suggests a continued shift toward more integrated approaches - linking product development, material selection, and lifecycle considerations.