Is the Circular Economy growing now?
In our circular economy deck, you will find everything you need to understand the market
SUMMARY
Yes, the Circular Economy is growing now. The clearest growth is in resale, repair, recycling infrastructure, circular materials and compliance technology, even though the global economy itself is becoming less circular in physical terms.
That gap is the most important thing to understand. Circular businesses can gain customers, revenue and capacity while virgin-material consumption grows even faster, pushing the global share of secondary materials down.
Europe shows the problem particularly well. Its circular material use rate reached a record 12.2% in 2024, but hitting the EU's 23.2% target by 2030 would require progress roughly sixteen times faster than the historical pace since 2015.
Investment has become substantial without returning to boom conditions. Circular Economy funding remains far above its 2018 base, but broad investment peaked in 2021 and recent plastics investment has been roughly flat rather than accelerating.
Capital also favors the easiest parts of circularity to finance. In plastics, 83% of tracked private investment went into collection, sorting and recycling in 2024, while reuse and refill received just 1%.
Resale is the strongest commercial proof that circular consumption can scale without waiting for regulation. Vinted, Depop, The RealReal and ThredUp are all expanding at meaningful rates across different resale models, and large incumbents are buying into the category.
Industrial recycling is scaling too, but more capacity does not automatically mean better economics. Republic Services processed more material while falling recycled-commodity prices erased much of the financial benefit, showing how exposed circular businesses remain to virgin and commodity pricing.
Textiles and batteries reveal a different constraint: timing. Long-term purchase agreements are creating credible demand for textile-to-textile recycling, while battery recyclers have sometimes built capacity years before enough end-of-life EV batteries exist to keep those plants full.
Regulation is becoming a bigger growth engine. European repair rights, packaging requirements, producer-responsibility systems and Digital Product Passports are turning circularity from a voluntary sustainability initiative into an operating and compliance requirement for thousands of companies.
The capital geography is also lopsided. High-income economies receive most formal Circular Economy investment, while much of the world's repair, collection, reuse and recycling work is still carried out informally in lower-income markets with far less access to financing.
The result is a Circular Economy that is commercially real but still systemically small. Circular businesses are growing faster than circularity itself, and the next test is whether that growth becomes large enough to reduce the economy's dependence on virgin materials rather than simply process more waste after it has already been created.
This market map, featured in our circular economy deck, highlights top companies and startups in the circular economy
Is the Circular Economy actually growing right now?
Yes, the Circular Economy is growing commercially right now, even while the global economy is becoming less circular in physical terms.
That split is the key to the whole question. Resale platforms are growing at double-digit rates. Repair has gained new legal support in Europe. Large waste companies are adding recycling capacity. Textile recyclers are signing long-term purchase agreements with major retailers. Governments are putting recycled content, repairability, reuse and product traceability directly into regulation.
Yet Circle Economy's latest global material benchmark points in the opposite direction at the system level. Secondary materials represented 9.1% of global material use in 2018 and only 6.9% in 2025. Virgin material consumption has grown faster than the world's ability to recover and reuse materials.
So there is a real Circular Economy growth story, just a narrower one than the phrase suggests. Businesses that keep products and materials in circulation are getting bigger. Their share of the entire physical economy remains too small to reverse the broader trend.
Circle Economy's 2026 report adds another useful perspective. It estimates that roughly €25.4 trillion of economic value is lost every year through resource inefficiency, premature disposal and underused assets, against €82.6 trillion of global GDP in its calculation. That figure is model-based rather than industry revenue, but it shows the size of the economic problem circular businesses are trying to attack.
If you want more recent data on this point, please see our latest circular economy report.
If circular businesses are growing, why is the world becoming less circular?
The world is becoming less circular because our appetite for new materials is growing faster than reuse and recycling can keep up.
Circle Economy's decline from 9.1% secondary-material use in 2018 to 6.9% in 2025 represents a 2.2 percentage-point drop. In relative terms, the circular share has fallen by about 24%.
The denominator explains a lot. UNEP says global extraction of natural resources has tripled over roughly the past five decades. Under its current-trajectory scenario, resource extraction could rise another 60% between 2020 and 2060.
That creates a brutal catch-up problem. Imagine recycled-material use grows 20%, while total material consumption grows 30%. The recycling industry has expanded, yet the economy ends up less circular because virgin materials took an even larger share.
This is happening across construction materials, plastics, metals, consumer goods and energy infrastructure. New recycling plants can be genuinely useful and commercially successful without moving the global percentage much. Those two measurements have to stay separate.
As this chart shows, and as featured in our circular economy deck, search interest in eco-friendly brands has been growing steadily
Is Europe getting more circular fast enough?
Europe is getting more circular, but the improvement is far too slow to call it a real acceleration today.
Eurostat's latest complete annual data puts the EU circular material use rate at 12.2% in 2024, the highest recorded level. It was 11.8% one year earlier in the previous publication, and the longer comparison shows an increase of about 1 percentage point since 2015.
The Netherlands reached 32.7%, Belgium 22.7% and Italy 21.6%, so much higher levels are already possible inside developed European economies. Twenty-one EU countries improved between 2015 and 2024.
The problem is speed. The EU wants its circular material use rate to reach 23.2% by 2030. From the 2024 level, that means another 11 percentage points in six years, or roughly 1.83 points per year.
Between 2015 and 2024, Europe improved at around 0.11 point per year. We calculate that the EU would need to move roughly sixteen times faster than that historical pace to hit the 2030 target.
Europe gives us one of the clearest examples of the Circular Economy tension today: directionally positive, painfully slow in absolute terms.
| Measure | Circular material use | What it shows |
|---|---|---|
| EU in 2015 | ~11.2% | Starting point |
| EU in 2024 | 12.2% | Record high |
| 2030 EU target | 23.2% | Another 11 points needed |
| Historical pace, 2015–2024 | ~0.11 point/year | Slow progress |
| Pace needed from 2024 to 2030 | ~1.83 points/year | About 16× faster |
Are investors putting more money into the Circular Economy now?
Circular Economy investment is much larger than it was several years ago, but the broad funding data does not show a new boom today.
Circle Economy and KPMG tracked nearly $164 billion invested in circular businesses between 2018 and 2023. Annual investment rose from around $10 billion in 2018 to $42 billion in 2021, then dropped to $28 billion in 2023.
That leaves a mixed trajectory. The 2023 level was still 2.8 times the 2018 level, which is substantial structural growth. It was also one-third below the 2021 peak.
A more recent plastics dataset reaches a similar conclusion. The Circulate Initiative tracked $18 billion of private investment in plastic circularity during 2024. That was roughly flat year over year and well below the $25 billion annual average recorded between 2018 and 2023.
IFC's newer Circular Economy Investment Tracker confirms that the capital pool itself has become large. Across electronics and appliances, packaging and textiles, it found $198 billion invested through 6,804 transactions between 2018 and 2024.
Circular Economy investment today looks established rather than surging. Investors clearly treat circular businesses as a serious category, while the latest aggregate numbers give us little evidence that capital deployment is accelerating past its previous peak.
This chart, featured in our circular economy deck, shows annual venture capital investment in circular economy startups
Is Circular Economy funding going to the models that reduce waste most?
Usually no. Most Circular Economy capital still goes toward handling products and materials late in their life rather than designing waste out earlier.
Circle Economy's finance work found only 4.7% of tracked investment going into circular design and production. Much more capital flowed toward established areas such as repair, resale and recycling.
Plastics make the imbalance even clearer. The Circulate Initiative found that 83% of private plastic-circularity investment in 2024 went to value recovery, including collection, sorting and recycling. Circular design and production received 15%. Reuse and refill attracted only 1%.
Those numbers make commercial sense. Investors understand recycling plants, waste contracts and repair businesses. Reusable packaging networks can be harder because they require reverse logistics, collection infrastructure, repeated customer behaviour and enough cycles per container to make the economics work.
Still, this funding mix limits how much the Circular Economy can change material consumption. Recovering a bottle after use helps. Avoiding the disposable bottle can remove more virgin-material demand altogether.
For now, capital remains heavily concentrated around recovery.
| Circular plastics activity | Share of 2024 private investment |
|---|---|
| Collection, sorting and recycling | 83% |
| Circular design and production | 15% |
| Reuse and refill | 1% |
| Other activities | ~1% |
If you want more recent data on this point, please see our latest circular economy report.
Is secondhand resale the clearest Circular Economy winner?
Yes, resale is currently the cleanest example of Circular Economy growth showing up directly in transactions, revenue, users and acquisitions.
Vinted's 2025 results are unusually strong for a business already operating at scale. Marketplace GMV jumped 47% to €10.8 billion and revenue climbed 38% to €1.1 billion. Vinted remained profitable while investing more heavily in Germany, payments and logistics, and an investor transaction this spring valued the company at €8 billion.
Depop gives us a second large example with a different customer base. It generated $1.075 billion of merchandise sales in 2025, up 36.3%. Its first-quarter 2026 merchandise sales then reached $348.9 million versus $233.5 million a year earlier, which works out to roughly 49% growth.
eBay closed its Depop acquisition this summer. The final cash paid was around $1.4 billion after purchase-price adjustments, giving a large incumbent direct ownership of one of fashion resale's fastest-growing platforms.
Luxury resale is moving too. The RealReal reported a record $617 million of quarterly GMV in its latest results, up 22%, marking its fourth consecutive quarter above 20% GMV growth.
ThredUp adds another useful data point because its economics are improving alongside volume. Its 2025 revenue increased 19.5% to $311 million, active buyers rose 29.5% to 1.65 million and orders increased 25.3%. Adjusted EBITDA reached $13.5 million, up from $8.7 million.
Strong growth is showing up across peer-to-peer resale, managed apparel resale and luxury consignment at the same time. That breadth makes resale much harder to dismiss as one company's success.
| Company | Latest scale | Recent growth |
|---|---|---|
| Vinted | €10.8B annual GMV | +47% |
| Depop | $1.075B annual GMS | +36.3% |
| The RealReal | $617M quarterly GMV | +22% |
| ThredUp | $311M annual revenue | +19.5% |
This chart, featured in our circular economy deck, shows why Back Market is winning in the circular economy
Is repair finally becoming a real growth market?
Yes, repair is getting a fresh commercial push today because regulation is making it easier for consumers to repair products instead of replacing them.
Repair itself is already enormous. IFC, the ILO, Circle Economy and the World Bank estimate that 121 million to 142 million people work in circular activities globally. Repair and maintenance account for roughly 46% of those jobs, or at least 65 million people.
What changed recently is the policy environment. New EU right-to-repair rules started applying this summer. Consumers can request repairs for products that are technically repairable under EU law, including smartphones, tablets, washing machines and vacuum cleaners. Manufacturers also face requirements around repair information and reasonably priced spare parts.
Choosing repair during the liability period can extend the legal guarantee by at least another 12 months. A European repair platform is also scheduled to connect consumers with repairers.
The European Commission's impact assessment estimated that the policy package could generate about €4.8 billion in additional growth and investment over fifteen years, alongside much larger consumer savings.
That should help formal repair networks, spare-parts suppliers, diagnostics providers, refurbishers and repair marketplaces. We still need real usage data before claiming that European consumers have suddenly changed their behaviour, but the commercial conditions around repair are clearly better than they were a few years ago.
Are recycling companies adding enough capacity to matter?
Yes, recycling companies are adding industrial-scale capacity, although commodity prices can wipe out some of the financial benefit surprisingly quickly.
WM gives us a useful sense of scale. During 2025, nine new or automated recycling facilities added about 817,000 tons of annual recycling capacity. The company recovered almost 16.8 million tons of material for recycling during the year.
Republic Services is expanding too. Its Indianapolis Polymer Center began operating in 2025, adding another large facility specifically designed to process plastics and produce recycled material suitable for higher-value applications.
Then the economics turned less friendly. Republic's average recycled-commodity price fell from $164 per ton in 2024 to $135 in 2025, an 18% decline.
Higher recycling volumes from new facilities helped revenue, while lower commodity prices offset those gains. Republic ultimately reported no net year-over-year revenue change from the combined effect of recycling processing and commodity sales.
That tells us more than another plant announcement. Physical recycling capacity can grow while recycling revenue stalls because the output is still exposed to commodity markets. Republic estimates that a $10-per-ton movement in recycled commodity prices changes annual revenue and operating income by around $13 million at its current mix and volumes.
The Circular Economy needs more capacity, and that capacity is arriving. Stable economics are proving harder.
This chart, featured in our circular economy deck, shows annual funding in circular economy startups
Are plastics becoming more circular, or are we mostly recycling more?
Plastics are becoming better recycled in some parts of the market, while reuse remains stubbornly small.
The Ellen MacArthur Foundation's Global Commitment gives us an unusually useful comparison because participating brands and retailers represent roughly one-fifth of the global plastic-packaging market.
Since 2018, those companies reduced virgin-plastic use by about 6%. Across the broader global market, virgin-plastic use increased 13% over the comparable period.
The difference is even larger in recycled content. Global Commitment companies increased their share of post-consumer recycled material by 11 percentage points, compared with roughly 1 point across the wider market. Participating recyclers increased recycled-plastic production by 61%, versus about 28% for the market.
Reuse is where progress becomes much weaker. Reusable packaging still represented only about 1.2% of packaging among participating brands and retailers in the latest dataset.
Investment patterns point to the same bottleneck. As we saw above, only 1% of tracked private plastic-circularity investment in 2024 went to reuse and refill.
Plastic circularity is moving fastest once the packaging already exists. Recycled content, collection and processing are improving. The bigger behavioural shift toward containers that circulate repeatedly is barely moving.
If you want more recent data on this point, please see our latest circular economy report.
Is textile circularity moving beyond secondhand clothes?
Yes, textile circularity is moving into industrial recycling, but current capacity remains tiny compared with the amount of clothing and fabric thrown away.
The demand side is becoming more credible. H&M has a seven-year, $600 million offtake agreement with Syre for textile-to-textile recycled polyester. H&M's latest sustainability reporting still identifies Syre as a core part of its strategy for replacing virgin materials.
Syre has also expanded its work with Target. The companies say the partnership could enable the use of 70,000 metric tons of polyester produced from end-of-life textiles, with meaningful product integration expected by 2030.
That starts to look like an industrial supply chain rather than a sustainability pilot.
The denominator is still huge. European Commission estimates put EU textile waste at about 12.6 million tonnes in 2019. Only around one-fifth was separately collected for reuse or recycling.
If we compare Syre's proposed 70,000-ton Target volume with that historical EU waste figure simply to understand the order of magnitude, it comes to roughly 0.6%.
The comparison uses different geographies and should not be read as market share. It does show how much industrial recycling needs to scale before textile-to-textile systems materially change the sector's overall material flow.
Europe is also pushing the supply side through regulation. Member States now have to establish producer-responsibility systems for textiles and footwear, making producers help fund collection, sorting, reuse and recycling.
Textile circularity has clearly moved beyond resale. Scale remains the unresolved part.
This chart, featured in our circular economy deck, compares the main business model options for refurbished tech sellers
Is battery recycling booming too early?
Yes, battery recycling is growing fast, and some of the industry built capacity well before enough end-of-life EV batteries were available to fill it.
The IEA's latest battery-recycling work still shows a large mismatch heading toward 2030. In China, projected recycling capacity sits around 1.3 TWh against roughly 0.15 TWh of domestic recyclable feedstock. Outside China, capacity is around 0.53 TWh against approximately 0.28 TWh of feedstock.
Manufacturing scrap fills part of the gap for now. The bigger wave of used EV batteries arrives later as today's electric vehicles reach the end of their lives.
That timing problem has already hurt companies. Ascend Elements, once one of the most heavily financed U.S. battery-recycling startups, entered Chapter 11 this spring. Its liquidation plan was confirmed recently.
At the same time, Redwood Materials keeps attracting capital and customers. Redwood closed a $425 million Series E earlier this year, with Google joining existing investors. It has since expanded work with General Motors across the battery lifecycle and with Rivian around energy storage.
Redwood also shows how the business model is evolving. Used EV batteries can retain enough capacity to serve as stationary storage before being broken down for raw materials. That gives a recycler another way to make money while waiting for the end-of-life battery stream to become much larger.
Battery recycling still looks like a major Circular Economy growth market. The difficult part is matching factory capacity, feedstock availability and battery chemistry at the right moment.
Can circular materials compete when virgin materials are cheap?
Sometimes, but cheap virgin materials remain one of the biggest brakes on Circular Economy growth.
Republic Services gives us a very practical example. Its recycled-commodity price dropped 18% in 2025 even while new recycling infrastructure increased volume. Processing more material did little for revenue because the material itself became less valuable.
Plastic recyclers face a similar problem whenever virgin resin prices fall. A buyer may prefer recycled resin for environmental reasons, but price-sensitive customers can move back toward virgin material when the discount becomes large enough.
Battery recycling has its own version of the same issue. Lithium iron phosphate batteries contain less nickel and cobalt than older chemistries, so the recoverable material can be worth less even though recycling remains useful for supply security and waste management.
Circular businesses operate under an awkward set of economics. They have to collect, transport, inspect, sort, clean and reprocess materials that a virgin-material producer can often manufacture at enormous scale from standardized inputs.
This helps explain why regulation keeps appearing in successful circular markets. Recycled-content mandates create guaranteed demand. Producer-responsibility fees make disposal more expensive. Repair rules can extend useful product life. Reuse targets can justify collection infrastructure that would otherwise struggle to reach scale.
Without those changes, many circular materials run into a basic problem: the linear alternative is still too cheap.
If you want more recent data on this point, please see our latest circular economy report.
This chart, featured in our circular economy deck, shows the revenue mix across customer segments in the circular economy
Is regulation now doing more for Circular Economy growth than consumer demand?
Yes, regulation is becoming one of the strongest growth drivers in the Circular Economy right now because companies increasingly have to build circularity into products and packaging.
Europe has moved unusually quickly in recent weeks. Its new packaging rules are now applying across the EU. They require changes around packaging design, recyclability, recycled plastic content, reuse, refill and waste prevention, with major requirements tightening toward 2030.
That changes the customer base for circular suppliers. Packaging companies, consumer brands, retailers and importers can no longer treat circular packaging entirely as a voluntary sustainability project.
The Digital Product Passport is moving from policy language into actual infrastructure as well. The EU's Digital Product Passport Registry is now operational. Companies can access the registry and its testing environment, and the Commission recently published updated guidance for the battery passport.
Certain large batteries will be the first major category required to use Digital Product Passports. Iron and steel, textiles, aluminium, tyres, furniture and other products are scheduled to follow through later delegated rules.
This creates a new software and data layer around the Circular Economy. Manufacturers will need structured information about product composition, identity and other regulated data. Repairers, recyclers, customs authorities and market-surveillance bodies will be able to use that information at different points in the product's life.
California is pushing in the same direction from another angle. Permanent rules implementing its packaging producer-responsibility law took effect this year. By 2032, the state requires a 25% reduction in single-use plastic, 100% recyclable or compostable covered packaging and a 65% recycling rate for single-use plastic packaging and food-service ware. A meaningful part of the required reduction is supposed to come from elimination, reuse or refill.
Regulation creates demand conditions before it creates measurable material outcomes. Still, the policy environment has shifted enough that circularity is becoming a compliance problem for thousands of companies rather than a branding exercise for a smaller group of sustainability leaders.
Is Circular Economy growth mostly happening in rich countries?
Financially, yes. Circular Economy investment remains heavily concentrated in richer economies even though much of the world's repair, reuse and recycling work happens elsewhere.
IFC's latest Circular Economy Investment Tracker covers $198 billion invested between 2018 and 2024 across electronics and appliances, packaging and textiles.
Only $14 billion went to low- and middle-income countries. That works out to 7% of the total.
Capital is concentrated even within that smaller pool. China, India, Mexico, Thailand and Türkiye captured nearly 90% of investment flowing to low- and middle-income markets.
The average disclosed transaction was also much smaller there: about $22 million versus $52 million in high-income economies.
The employment pattern looks very different. More than half of global circular employment is informal, according to the IFC-led employment study, with more than 74 million informal circular workers. Much of that work sits in lower-income economies through repair, collection, reuse and recycling.
Capital and labour are geographically misaligned. Rich countries are funding automated recycling plants, marketplaces, advanced materials and compliance systems. Developing economies already perform large amounts of circular activity, often through smaller and informal businesses with much less access to financing.
| IFC investment tracker, 2018–2024 | Result |
|---|---|
| Total investment tracked | $198B |
| Transactions | 6,804 |
| Markets receiving investment | 97 |
| Investment into low- and middle-income countries | $14B |
| LMIC share of investment | 7% |
This chart, featured in our circular economy deck, shows how recommerce marketplace technology has evolved over time
So, is the Circular Economy growing now?
Yes. The Circular Economy is growing now, although the growth is much clearer in businesses, infrastructure and regulation than in the world's overall use of materials.
The commercial evidence is convincing. Vinted grew GMV 47%. Depop grew merchandise sales more than 36% before being bought by eBay. The RealReal is still growing GMV above 20%. Large waste companies are adding hundreds of thousands of tons of new recycling capacity. Textile recyclers are securing long-term demand from some of the world's largest retailers. Battery recycling and reuse continue attracting major capital even after a painful industry shakeout.
The policy evidence has become stronger lately too. European repair rights are now applying. New EU packaging requirements have started to bite. The Digital Product Passport Registry has gone live. California's packaging producer-responsibility system has moved into implementation.
Investment deserves a more cautious reading. Circular Economy financing is far above its 2018 base, while broad investment peaked in 2021 and the latest plastics data remains below its previous multi-year average. Capital also flows disproportionately toward recycling and other end-of-life solutions, with very little reaching reuse and refill.
Physical circularity is the hardest part of the answer. Global consumption of virgin resources keeps increasing faster than recovered materials can replace them. Europe's circular-material rate is improving, but reaching its 2030 target would require a dramatic acceleration from the historical pace.
That leaves a fairly sharp judgment. The Circular Economy is already a growing collection of real markets, especially resale, repair, recycling infrastructure, circular materials and compliance technology. Several of those markets look stronger today than they did a year or two ago.
The broader economic transition is much less advanced. For now, circular businesses are growing faster than circularity itself.
If you want more recent data on this point, please see our latest circular economy report.
OUR METHODOLOGY
This analysis tests whether the Circular Economy is growing now by separating commercial growth from progress in circularity across the economy as a whole. Business growth, investment, physical material flows, infrastructure, regulation and adoption can move at very different speeds, so we do not use a single market-size estimate as the answer.
We looked separately at system-level circularity, capital flows, business performance, industrial capacity, sector adoption and regulatory change. This lets us distinguish growth in circular businesses from an actual reduction in the economy's dependence on virgin materials.
For each dimension, we prioritized the most recent meaningful evidence available: reported company results, transaction data, operating capacity, investment flows, enacted regulation and measured material outcomes. Forecasts and broad market-size estimates received less weight when directly observed data was available.
We also avoided using isolated company announcements as proof of a market trend. Where possible, we looked for similar movement across several companies, business models or datasets. That is why the resale section, for example, compares Vinted, Depop, The RealReal and ThredUp rather than relying on one marketplace.
Comparisons depend on the question being tested. Current performance is compared with previous years, investment with earlier funding peaks, European circularity with the EU's 2030 target, and battery-recycling capacity with expected recyclable feedstock. The aim is to separate absolute growth from acceleration and capacity being built today from outcomes already visible in material flows.
Regulation, new processing capacity, long-term purchase agreements and large capital commitments are treated as forward-looking evidence of market formation. We do not assume that a new rule, plant or offtake agreement has already produced an equivalent improvement in global circularity.
Key system-level sources include Circle Economy's Circularity Gap Report 2025, Circle Economy's 2026 work on the global Value Gap, UNEP's Global Resources Outlook 2024, and Eurostat's circular material use data.
For investment and company-level growth, important sources include The Circulate Initiative's Plastics Circularity Investment Tracker, IFC's Circular Economy Investment Tracker, Vinted's 2025 results, Etsy's 2025 annual report covering Depop, The RealReal's Q2 2026 results, and ThredUp's full-year 2025 results.
Industrial and sector evidence comes from sources including WM's sustainability reporting, Republic Services' 2025 results, the Ellen MacArthur Foundation's Global Commitment 2025, H&M's materials reporting, Syre's Target partnership, and Redwood Materials' Series E announcement.
For regulation, we rely primarily on official sources: the European Commission on right to repair, the European Commission on textile producer responsibility, EUR-Lex for the EU Packaging and Packaging Waste Regulation, the European Commission's Digital Product Passport documentation, and CalRecycle's SB 54 implementation material.
The final judgment comes from the combined weight of those dimensions rather than a mechanical score. The evidence supports a clear distinction: Circular Economy businesses and infrastructure are growing, but physical circularity at the level of the entire economy is not yet improving at anything close to the same pace.
In our circular economy deck, we identify pain points entrepreneurs should prioritize
Related blog posts
