Steel and plastics lead emissions savings as circular strategies emerge as key tools for Europe’s climate, energy, and economic resilience.
A newly released report from the European Commission’s Joint Research Centre (JRC) outlines a powerful climate opportunity hiding in plain sight: the circular economy. If fully implemented across four energy-intensive sectors — steel, plastics, aluminium, and cement/concrete — circular economy strategies could eliminate up to 231 million tonnes of CO₂ equivalent emissions annually by 2050.
RELEVANT SUSTAINABLE GOALS
This represents a major share of the nearly 15% of total EU emissions currently produced by these industries. According to the report, focusing on circular practices such as material reduction, reuse, and recovery could also improve the bloc’s energy and economic security, reduce dependence on imported raw materials, and strengthen trade resilience.
“Circular economy measures are not only an environmental imperative,” the report notes, “but a strategic lever to secure Europe’s future competitiveness.”
Sector-Specific Impact: Steel and Plastics Hold the Greatest Potential
The analysis reveals that the steel and plastics sectors offer the largest CO₂ savings potential:
- Steel: Up to 81 million tonnes CO₂e reduction annually
- Plastics: Up to 84 million tonnes CO₂e reduction annually
These two sectors alone account for over 70% of the emissions savings potential identified in the report. When combined with aluminium and cement/concrete, the estimated impact of circularity measures falls between 189 and 231 million tonnes of CO₂e saved per year — a substantial contribution to EU climate neutrality goals.
Circular strategies in these industries wouldn’t just cut carbon — they would also reduce energy consumption and fossil fuel dependency across the EU:
- Electricity and fossil fuel demand could drop by 4.7% compared to 2023 levels.
- Lower consumption of raw materials like iron ore (−22%) and bauxite (−11%).
- Improved trade balance by €35 billion, primarily from reduced raw material and energy imports.
By minimizing the need for resource-intensive production processes, the EU would become more insulated from volatile energy markets and global supply chain disruptions — both critical in an increasingly uncertain geopolitical landscape.
Economic and Strategic Gains: Competitiveness Through Circularity
The findings support broader EU goals under recent policy frameworks, including the EU Competitiveness Compass (January 2025) and the Clean Industrial Deal (February 2025). Both documents identify the circular economy as a central pillar of a sustainable, resilient, and competitive industrial future.
The report highlights that circularity is more than just recycling — it includes upstream interventions like eco-design, improved product lifespans, and Green Public Procurement policies to influence market demand and boost sustainable production practices.
“Circularity is a core enabler for achieving both economic growth and environmental targets,” the report states, “and should be embedded in EU industrial strategy going forward.”
From Potential to Policy: Recommendations for Implementation
To realize the full benefits of circularity, the report calls for decisive policy action and cross-sector collaboration. Key recommendations include:
- Investing in technologies to improve the quality and consistency of recycled materials
- Designing products for longer use and easier disassembly
- Leveraging public procurement to create demand for circular products
- Strengthening collaboration between policymakers, industry leaders, and innovators.
These actions align with the EU’s broader sustainability agenda and provide a clear roadmap to close the implementation gap between climate targets and industrial emissions.
As Europe seeks pathways to meet its 2050 climate neutrality commitments, the circular economy offers a rare trifecta: emissions cuts, economic resilience, and energy security. The JRC’s findings provide a compelling case for embedding circularity into the heart of industrial transformation.
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