The Circular Economy Act must deliver demand-side measures for recycled materials

FEAD considers insufficient and volatile demand for recycled materials to be the main structural barrier currently holding back Europe’s circular economy. While specific waste streams may face collection, sorting or quality constraints, Europe does not face a general structural shortage of recyclable material. Without predictable demand, additional collection, sorting and recycling capacity cannot become economically viable.

FEAD therefore highlights demand-pull measures as a priority for the Circular Economy Act (CEA) to address current market failures and provide investment certainty. Demand also featured prominently in stakeholder feedback collected during the Commission’s 30 April workshop, as reflected in the workshop survey:

FEAD’s key recommendations for the CEA:

1. Safeguard recycled-content targets through a harmonised definition of ‘recycled content’ across EU legislation, ensuring that only post-consumer waste counts towards mandatory targets.
2. Introduce a “Made in Europe” component (EU + UK + EFTA) in all existing and future recycled-content targets, to ensure EU circularity policies also support European recycling capacity.
3. Introduce a horizontal recycled-content requirement for plastics and accelerate product-specific requirements under the ESPR, prioritising products with high potential for recycled-content uptake.
4. Use public procurement as a binding demand driver for European recycled materials and products containing them.
5. Use EPR eco-modulation to reward verified European post-consumer recycled content.

I. The CEA must safeguard the integrity of recycled content

Recycled-content requirements are a necessary regulatory intervention to fix market failures and stimulate a circular economy in Europe. To deliver, the framework must be robust: it should generate additional demand, provide investment visibility, avoid unnecessary overregulation and close loopholes that would allow targets to be met without strengthening recycling markets.

Ensure recycled content addresses market failures and supports recycling

Recent discussions, on the ESPR delegated acts, the End-of-Life Vehicles Regulation and the amendment of the Critical Raw Materials Regulation, have shown a tendency to broaden the materials eligible to meet recycled-content targets. While this could facilitate compliance for manufacturers, it will certainly reduce the needed demand for post-consumer recycled materials and therefore weakening the investment signal for recycling capacity. Recycled-content targets should not simply accommodate existing practices and recognise material flows that are already integrated. They must create a new and predictable market for waste that has been collected, sorted and recycled after consumer use. Starting with realistic, progressively increasing targets can give manufacturers time to adapt while providing recyclers with the certainty needed to invest.

FEAD therefore calls on the CEA to safeguard the definition of recycled content by ensuring that only post-consumer waste is counted. Biobased materials and pre-consumer waste must be categorically excluded from the definition of recycled content. Pre-consumer and post-industrial material and by-products, which are already captured within controlled industrial loops, should not dilute targets intended to stimulate additional collection, sorting and recycling. Biobased content should remain a distinct policy concept and should only qualify as recycled where it results from genuine biowaste recovery processes. Post-consumer waste is collected from dispersed sources and is more exposed to contamination, loss of traceability and quality variation. Its treatment is therefore more complex and costly. A clear focus on post-consumer material is necessary to correct this market failure and ensure that recycled-content rules generate genuinely additional circularity.

Ensure recycled content obligations strengthen European recyclers

Recycled-content obligations must also translate into demand for European recycling capacity. Experience from packaging legislation has shown the risk that new obligations can be met through imported material without sufficient guarantees on origin, recycling conditions or environmental performance. FEAD therefore calls for a “Made in Europe” component in all existing and future recycled-content targets. The framework should distinguish between:

1. European post-consumer recycled material, from waste collected, sorted and recycled in Europe (+UK +EFTA), which should benefit from the “Made in Europe” component;
2. imported recycled material, which should be eligible only where strong and effectively enforceable mirror requirements guarantee equivalent environmental, social and quality standards, backed by effective verification and market surveillance.

II. Demand boosting measures in the CEA

The Commission has indicated, on the one hand, that recycled content targets will only be introduced via ESPR delegated acts, to ensure consistency across EU legislation. On the other hand, it has also referred to the revision of procurement legislation as an exercise in centralising existing rules, with no additional sectoral provisions foreseen.

The ESPR delegated act process is, however, inherently slow: it addresses sustainability in its broadest sense, then applies it in a targeted manner to specific product categories. The current working plan includes only a limited number of final and intermediate product categories, while recycled content and recyclability as horizontal requirements are foreseen only for electrical and electronic equipment. FEAD does not seek to replace the ESPR architecture, but its pace does not match the urgency facing circular economy. The Commission should therefore accelerate work under the ESPR, prioritising products where there is high technical potential for recycled-content uptake and where recycling activities can already respond to additional demand.

Recyclers need demand certainty now to justify long-term investment in sorting and processing capacity. FEAD therefore considers that the approach should be reversed: the CEA should define key recycled content targets that can later be superseded, where applicable, by product-specific ecodesign or sustainability criteria. This could be done in a more cross-sectoral manner, and should in particular be the case for plastics.

FEAD calls for:

• Recycled-content targets that create additional demand for post-consumer recycled materials, with clear and harmonised rules on what can count towards compliance;
• A horizontal requirement for plastic recycled content in the CEA, combined with accelerated work under the ESPR on product-specific targets, prioritising products with high potential for recycled-content uptake;;
• A “Made in Europe” component in all existing and future recycled-content targets, ensuring that EU demand-side measures support post-consumer waste collected, sorted and recycled in Europe while applying robust equivalent requirements to imports;
• Public procurement provisions ensuring a binding preference for European recycled materials, and for products manufactured using them. This could be achieved either through the CEA or the revised procurement legislation, but foreseeing only an obligation to ‘assess’ circularity falls short of of the market signal needed to make European recycling markets viable;
• Cross-sectoral, mandatory eco-modulation of EPR fees to reward verified European post-consumer recycled content (made in the EU/UK/EFTA).

FEAD, the European Waste Management Association, represents the entire waste management value chain, from collection and sorting to recycling, energy recovery, and final disposal. It brings together the private waste and resource management industry across Europe through its 21 national member associations and associate members, which collectively represent over 3,000 companies. Together, the sector provides more than 500,000 local jobs and fuels €5 billion in investments into the economy every year. For more information, please contact: info@fead.be