Circular economy could double industrial emissions savings in the EU
Applying circular strategies in the steel, aluminium, cement, and plastics sectors could save up to 231 million tonnes of CO₂ annually by 2050 and reduce dependence on imported raw materials, according to a report by the European Commission’s Joint Research Centre (JRC).
Energy-intensive sectors account for nearly half of Europe’s industrial emissions. Incorporating circular economy principles—such as material reduction, recycling, and reuse—would not only drastically cut greenhouse gas emissions but also strengthen the EU’s economic and energy autonomy. This is highlighted in the report Capturing the Potential of the Circular Economy Transition in Energy-Intensive Industries, published by the JRC.
The report quantifies, for the first time, the potential impact of circularity in these key industries for the European economy, which are also the most environmentally impactful: they are responsible for 44% of manufacturing sector greenhouse gas emissions.
The steel, aluminium, cement and concrete, and plastics industries are responsible for 44% of greenhouse gas emissions from the EU manufacturing sector.
According to the study, a scenario with ambitious circular measures could achieve annual savings of 64–81 Mt CO₂-eq in the steel sector, 12–14 Mt in aluminium, 38–52 Mt in cement and concrete, and 75–84 Mt in plastics. It would also reduce dependence on imported raw materials. For iron and critical materials for European industry such as bauxite, import demand would fall by 22% and 11%, respectively.
Fossil energy consumption and associated costs would also decrease significantly, helping to lower decarbonisation costs and reinforce the EU’s energy security.
JRC results indicate that while the energy transition is essential to achieve climate neutrality, circular actions not only reduce emissions but also generate economic and technological resilience. Emission reductions are 9 to 26 times greater than the reduction observed in the sectors’ Gross Value Added (GVA), demonstrating that circularity can reduce environmental impact without slowing economic activity.
Circular levers
Improving recycling quality, designing products for reuse and repair, increasing material efficiency, and revising construction sector standards that lead to overuse of cement, concrete, and steel are the most promising circular levers, according to the JRC. In the case of plastics, the key is to avoid incineration and promote high-quality recycling.
The report also proposes several policy measures to accelerate this transition: fiscal incentives to discourage primary material use, support for research and innovation in circular technologies, and mandatory incorporation of circularity criteria in green public procurement.