Report: Circularity Could Unlock €25.4trn for the Global Economy

Why It Matters

Unlocking the $27.7 trillion value gap would transform profitability and sustainability, making circularity a strategic imperative for governments and corporations alike.

Key Takeaways

• Global circularity gap wastes about $27.7 trillion annually.
• End‑of‑life waste accounts for the largest loss at $10.9 trillion.
• Circularity metric fell to 6.9% in 2025, down from 7.2% in 2023.
• Energy losses represent $9.5 trillion of wasted value each year.
• Shifting to circular models could boost productivity and supply‑chain resilience.

Pulse Analysis

The latest Circularity Gap Report reframes waste as a massive economic leak rather than merely an environmental concern. By quantifying the "value gap"—the difference between generated economic output and the value retained after material and energy use—the study reveals that roughly $27.7 trillion disappears each year due to linear production models. This figure dwarfs traditional sustainability estimates and highlights how conventional metrics like GDP overlook hidden costs such as resource depletion, pollution, and premature product disposal. The report’s methodology, which blends functional and created value, provides a more holistic lens for decision‑makers.

A deeper dive into the five identified loss pathways shows where the biggest opportunities lie. End‑of‑life waste alone represents $10.9 trillion, while energy inefficiencies and processing losses together exceed $10 trillion. Notably, the circularity metric—a measure of recycled or reused material share—has slipped to 6.9% in 2025, indicating that progress on material reuse is stagnating despite rising consumption. These trends suggest that without systemic change, resource productivity will remain flat, eroding competitiveness and inflating costs across sectors ranging from manufacturing to food production.

For businesses and policymakers, the report makes a clear case: adopting circular strategies is no longer a niche sustainability initiative but a core economic driver. Companies that redesign products for longevity, invest in closed‑loop supply chains, or improve asset utilization can capture a share of the $27.7 trillion value gap, enhancing margins and reducing exposure to volatile raw‑material prices. Meanwhile, governments can incentivize circular investments through tax credits, standards, and public‑private partnerships, fostering resilience in the face of geopolitical shocks and climate risks. As the global economy grapples with inflationary pressures and resource constraints, circularity offers a pragmatic pathway to sustainable growth.