The European Commission is preparing a Circular Economy Act for 2026, with preparatory analysis now formally listed in the Commission's 2025 work programme.

The Ellen MacArthur Foundation has published a coordinated appeal from European businesses pressing Brussels to match or exceed the ambition of the bloc's 2020 Circular Economy Action Plan on circular materials.

The appeal, hosted on the foundation's website, gathers signatories from companies operating across manufacturing, packaging, retail, and waste management.

These sectors absorb the bulk of the EU's post-consumer material flows and carry the heaviest compliance load under the bloc's extended producer responsibility regimes.

What is the Circular Economy Act meant to do?

The act sits inside the political guidelines of Ursula von der Leyen's second Commission, published in July 2024 as part of a renewed industrial strategy.

Brussels reaffirmed the file in September 2024.

The Commission tied the legislation to industrial competitiveness, single-market integration, reduced import dependence on critical raw materials, and circular material use rates for major resource categories.

It will formally succeed the March 2020 Circular Economy Action Plan. That earlier framework delivered the Single-Use Plastics Directive, Right to Repair rules, recycled-content thresholds for plastics packaging, the updated Packaging and Packaging Waste Regulation, and the Ecodesign for Sustainable Products Regulation (ESPR).

What are businesses asking for?

Signatories want Brussels to convert the existing patchwork of circular-economy rules into a single enforceable framework with binding horizontal instruments.

Specific asks cover binding recycled-content targets across steel, aluminium, plastics, and textiles, harmonised end-of-life reporting, mandatory product-as-a-service models in defined categories, and restrictions on the destruction of unsold goods.

Several items overlap with measures already embedded in ESPR and the revised Waste Shipment Regulation.

The Waste Shipment Regulation took effect in May 2024 and tightened export rules for plastic scrap, requiring pre-consent for shipments leaving the OECD area.

Industry argues these instruments lack horizontal reach. They need architectural backing from the new act.

Compliance costs across the 27 member states are substantial under the current regime.

Companies want one harmonised framework to forestall divergent national interpretations of EU circular-economy law that complicate cross-border product placement.

How is the Commission sequencing the file?

The Commission's 2025 work programme lists preparatory analysis for the act.

An impact assessment and stakeholder consultation are slated for the second half of 2025, with a formal proposal targeted for 2026.

Once tabled, the text moves through the European Parliament and Council under the ordinary procedure.

Interinstitutional negotiations could run into 2027. Disagreement could centre on recycled-content mandates or product-as-a-service requirements.

What is the Ellen MacArthur Foundation's role?

The foundation, established in 2010 by Dame Ellen MacArthur following her round-the-world sailing record, has become the main non-governmental convener of European business engagement on the file.

Its reporting on circular product standards and urban material flows has fed Commission thinking since the 2015 Circular Economy Package.

The foundation runs the Circular Economy in Cities programme and convenes the Circularity Gap Reporting initiative, which has tracked global material circularity since 2018.

It has backed mandatory recycled-content rules for packaging and textiles during recent ESPR and Packaging and Packaging Waste Regulation negotiations.

The foundation has framed the appeal as a demand for Brussels to convert the existing patchwork into a single, enforceable framework with binding instruments.

What happens next?

Watch for the Commission's impact-assessment consultation in late 2025 and any leaked draft chapters before year-end.

The act's interplay with the Critical Raw Materials Act — in force since May 2024 with binding 2030 benchmarks for extraction, processing, and recycling capacity — will shape how recyclers schedule capex through the end of the decade.

Recyclers want clarity on how secondary raw materials count toward those 2030 benchmarks.

The European Recycling Industries' Confederation and other sector bodies are expected to submit detailed positions during the public consultation phase.

The decisive milestone remains the 2026 Commission proposal. That date determines whether the act clears the current mandate or rolls into whatever configuration follows the 2029 European Parliament elections.