The transition towards a circular economy is one of the European Union’s central industrial policy priorities. With the Circular Economy Act (CEA) expected in 2026, a further decisive step is set to follow: away from linear value chains and towards a system in which resources are used for as long as possible, reprocessed and kept within the cycle.
This topic is becoming increasingly important, particularly for energy- and resource-intensive industries. They operate in an environment shaped by security of supply, rising costs and growing regulatory requirements. The new regulatory framework provides guidance while at the same time setting clear impulses for more sustainable industrial practices.
Background: Why a Circular Economy Deal?
Europe is facing several structural challenges that are accelerating the transition towards a circular economy:
- High dependency on raw material imports
- Rising energy and material costs
- Ambitious climate targets up to 2050
- Increasing global competition for resources
At the same time, current developments highlight the need for action: the share of secondary raw materials remains comparatively low, while resource consumption continues to be high. The circular economy offers a strategic approach to combine ecological and economic objectives.
What is the Circular Economy Act 2026?
The Circular Economy Act (CEA) is a planned EU regulatory framework, with a proposal expected in 2026. It builds on existing initiatives such as the Circular Economy Action Plan and the European Green Deal.
The main objectives include:
- Establishing a functioning single market for secondary raw materials
- Promoting recycling, reuse and repair
- Reducing waste and emissions
- Strengthening Europe’s strategic autonomy
The Act is also closely linked to industrial policy initiatives and aims to better connect sustainability with competitiveness.
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CEA Key objectives and measures
The Circular Economy Deal follows a holistic approach across the entire value chain – from product development to recycling.
1. Sustainable product design
A large share of a product’s environmental impact is already determined at the design stage. The EU therefore focuses on this as a key lever.
The focus is on:
- Product durability
- Repairability and ease of maintenance
- Recyclability of materials
The objective is to design products from the outset in such a way that they can be used for as long as possible and efficiently returned to the cycle at the end of their life.
2. Strengthening secondary raw materials
A functioning market for recycled materials is a key prerequisite for a circular economy.
Planned measures include:
- Expansion of an EU-wide market for secondary raw materials
- Harmonised quality standards
- Stronger demand through industry and public procurement
The aim is to ensure that raw materials are used multiple times rather than being lost after a single use.
3. Waste prevention and recycling
European circular economy policy follows the so-called waste hierarchy, in which waste prevention has the highest priority. At the same time, recycling remains a central building block to keep already used resources within the economic cycle.
In practice, the focus in many areas has long been on recycling. With the Circular Economy Act, however, the EU is pursuing an extended approach: waste should be avoided wherever possible – and where it cannot be avoided, it should be processed to a high standard and reused.
In concrete terms, this means:
- Extending product lifecycles through maintenance, refurbishment and reuse
- Higher-quality recycling, returning materials in consistent quality
- Reducing downcycling, where materials lose quality
- More efficient use of existing resources instead of using new primary raw materials
This integrated approach not only strengthens environmental protection, but also security of supply. Materials remain in circulation for longer, dependencies on imports decrease and industrial processes become more sustainable.
In technical applications in particular, it becomes clear that the responsible handling of existing resources is a key lever for a functioning circular economy – and a central component of future industrial standards.
4. Economic and strategic relevance
The circular economy is not only an environmental objective, but also a strategic factor for Europe as an industrial location.
Key effects include:
- Reduced dependency on raw material imports
- Stabilisation of supply chains
- Increased resource efficiency
- Strengthening of competitiveness
This makes the circular economy an increasingly important economic success factor.
CEA Relevance for industry and energy infrastructure
For industrial applications – particularly in the field of energy infrastructure – there are concrete opportunities and challenges.
Opportunities
- More efficient use of existing resources
- Reduction of disposal and material costs
- Contribution to ESG and sustainability targets
- Development of new business models in refurbishment and reuse
Challenges
- Adaptation of existing processes
- Investment in new technologies
- Implementation of regulatory requirements
In specialised applications in particular, it becomes evident that the targeted treatment and reuse of materials is a key component of a sustainable and economically stable future.
Example of circular economy in practice: EOS® Closed-Loop Model
A practical example of circular value creation can be found in the transformer industry.
Within the so-called Closed-Loop Model of Electrical Oil Services (EOS®), used insulating oils are systematically collected, processed and restored to a like-new condition before being returned to the technical cycle. This approach combines resource efficiency with security of supply. It enables the substitution of primary raw materials, significantly extends the service life of existing materials and ensures that technical requirements as well as regulatory standards are reliably met.
Find out more here:
LEARN MORE ABOUT THE BENEFITS OF THE EOS® CLOSED LOOP MODEL IN THE FOLLOWING VIDEO:
Conclusion: The Circular Economy Act marks a system change with significant impact
The Circular Economy Deal 2026 marks an important step towards a circular industrial system. It combines ecological objectives with economic necessity and creates a framework for long-term transformation.
The key developments can be clearly summarised:
- Resources are becoming a strategic factor
- The circular economy is becoming a competitive factor
- Sustainability is increasingly embedded in regulation
For companies, this means that those who adopt circular processes at an early stage and make efficient use of existing resources can not only meet regulatory requirements, but also secure long-term economic advantages.
Further insights into the practical implementation of the circular economy as it relates to the transformer industry can be found here:
- What are the pros and cons of the CEA for the transformer industry?
- What does the CEA Circular Economy Act mean for Electrical Oil Services?
- Used oil disposal: What type of used transformer oil does Electrical Oil Services accept?
