This chapter identifies and analyses the main challenges for cities and regions to accelerate the circular economy transition thanks to the results of the OECD Scoreboard on the Governance of the Circular Economy, applied to 64 surveyed cities and regions. It provides 53 policy recommendations to make the 12 governance dimensions of the OECD Checklist for Action work in practice.
The Circular Economy in Cities and Regions of the European Union
Abstract
A number of governance dimensions can enable the transition to the circular economy in cities and regions. The OECD (2020[1]) Checklist for Action identifies 12 factors for cities and regions to promote, facilitate and enable the circular economy (Box 3.1). These dimensions are not all making progress at the same pace in cities and regions, with some of them more advanced in their development and implementation. By using the OECD (2020[1]) Scoreboard on the Governance of the Circular Economy across 64 surveyed cities and regions, results show that for half of the sample, regulation, data and financing conducive to the circular economy are either planned or in development, suggesting room for improvement in those areas (Figure 3.1). The results for each governance dimension presented in this chapter reflect the self-perception of the surveyed cities and regions and do not represent the OECD’s assessment. This chapter offers 53 policy recommendations aimed at ensuring the effective implementation of the 12 dimensions (Table 3.1).
Note: Based on 64 responses to the questions on the level of advancement for each governance dimension. Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved” for each of the 12 governance dimensions. Responses selecting "not applicable" have been excluded from the graph. This graph clusters the responses as follows: (i) In place and implemented; (ii) Not fully implemented; (iii) Planned.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
The OECD (2020[1]) Checklist for Action supports decision-makers in promoting (by clarifying roles and responsibilities, developing a circular economy strategy, and enhancing a circular economy culture and transparency), facilitating (by fostering co-ordination, policy coherence, engaging stakeholders and implementing the circular economy at scale) and enabling (by adapting regulations, mobilising financing, building capacities, supporting innovation and generating data and assessment) the transition to the circular economy.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, OECD Urban Studies, OECD Publishing, Paris, https://doi.org/10.1787/10ac6ae4-en.
The Checklist for Action focuses on 12 key governance dimensions (Figure 3.2), namely: (i) Roles and responsibilities; (ii) Strategic vision; (iii) Awareness and transparency; (iv) Co-ordination; (v) Policy coherence; (vi) Stakeholder engagement; (vii) Appropriate scale; (viii) Regulation; (ix) Financing; (x) Capacity building; (xi) Innovation; (xii) Data and assessment.
The Checklist for Action is accompanied by the OECD (2020[1]) Scoreboard on the Governance of the Circular Economy, which helps governments identify the level of advancement towards the implementation of each of the 12 governance dimensions. Figure 3.3 shows the graph visualisation that provides an overview of the level of circularity of a city or region for each of the 12 circular economy governance dimensions of the checklist. This helps identify in which dimensions the city or region is best performing and where further action is needed. The figure presents the traffic light system visualisation (red for “Planned”, yellow for “Not fully implemented” and green for “In place and implemented”) that shows at a glance in which areas the government performing the self-assessment would need to improve.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, OECD Urban Studies, OECD Publishing, Paris, https://doi.org/10.1787/10ac6ae4-en.
Roles and responsibilities reflect the capacities of governments to establish who does what in policymaking (e.g. priority setting and strategic planning) and implementation (e.g. financing and budgeting, data and information, stakeholder engagement). Clarifying these tasks can pave the way for subnational governments to act as a role model and lead by example, using circular economy principles (e.g. reuse, durability, reparability, purchase of second-hand or remanufactured products) in public policies (OECD, 2020[1]). Cities and regions responding to the survey indicate a certain level of progress towards the implementation of actions leading towards circular economy models, from preventing waste generation, using secondary material, etc. (22%), while others (27%) state the existence of a clear commitment and leadership (Table 3.2).
Note: Based on 64 responses to the question: “Roles and responsibilities: Is your city/region a role model for the transition towards the circular economy?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]) OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Unclear roles and fragmentation of responsibilities across departments. While there are several municipal and regional departments that oversee policies related to the circular economy (e.g. sustainability, municipal waste, social and solidarity economy), they often do not have a clear mandate on the circular economy. Mostly, they may engage in activities on an ad hoc basis without formalised roles. In the majority of cases, waste departments (often in the lead) are trying to expand their activities from collection and treatment to reduction and reuse, while non-waste sectors are minimally involved or excluded. This inconsistency limits the potential for cohesive and comprehensive action across sectors.
Overlapping responsibilities in waste management. In many cities and regions, the decentralised nature of waste management, with overlapping responsibilities between municipalities, provinces and environmental agencies, exacerbates these challenges and leads to inefficiencies and inconsistent practices.
Inconsistent co-ordination across levels of government. Guiding frameworks, such as national circular economy strategies, fail to specify "who does what", leaving gaps in operationalising the circular transition at subnational levels. Many cities and regions find that the roles of subnational authorities in implementing national circular economy strategies remain ambiguous, leading to inconsistencies in approach and delays in advancing co-ordinated efforts.
Weak political willingness and leadership. When the circular economy is perceived as an end per se and not as a means to an end, local and regional governments may find it difficult to justify action and dedicate funds to it compared to other urgencies, such as health, social services and the environment. This may also be due to the lack of political willingness and leadership to advance with this systemic agenda on the circular economy.
Limited integration of circular economy criteria into public procurement policies. Public procurement processes lack systematic inclusion of circular economy criteria, such as requirements for eco-design, reused materials, or circular business models (e.g., Product-as-a-Service or collective purchasing). While some voluntary criteria exist (e.g., encouraging bio-sourced or recycled materials), generally they do not provide sufficient incentives or mandates for adopting circular practices in public operations, limiting the role of cities and regions in leading by example.
Policy recommendations
Key actions
A Checklist for Action: Roles and responsibilities
✓ Establish clear roles and responsibilities.
✓ Apply circular models within the government according to the “practice what you preach” principle.
✓ Prevent waste generation in municipal events and daily activities.
✓ Promote the use of secondary materials, sustainable products and build in a circular manner from roads to buildings.
✓ Adopt business models shifting from ownership to services.
✓ Implement green public procurement including circular economy principles.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Go beyond waste to break down silos and ensure that the circular economy is not confined to specific areas such as waste management departments. For instance, departments of finance or urban planning, could be best placed to take the lead and act as co-ordinators.
Appoint a lead to assign clear leadership roles and ensure accountability and policy continuity. Appointed individuals or teams could act as focal points to drive the circular economy agenda forward and facilitate collaboration among stakeholders.
Foster constructive dialogue to identify how circular economy practices can benefit the city/region in terms of cost saving, reduction of negative environmental impacts, material productivity, etc. Once the departments that can play a role in the circular economy transition have been mapped (e.g. departments for entrepreneurship, innovation, strategic planning, and commerce) a regular dialogue between departments on topics like circular procurement can help sustain demand for circular services and ensure consistent policy implementation.
Establish dedicated governance structures, such as multi-level committees that involve both policymakers and technical experts. They can provide a structured approach to decision-making, co-ordination, and progress monitoring.
Adopt transition brokers as intermediaries between the government, the business and the civil society to (i) establish a circular economy programme, (ii) help build circular initiatives, (iii) upscale successful circular initiatives, and (iv) mainstream the circular economy.
Be bold to lead by example. Cities/regions can undertake several activities to lead by example, although some may be experimental and only show results in the long term. The European Commission’s Circular Economy Action Plan argues that “a whole new range of sustainable services, product-as-service models and digital solutions will bring about a better quality of life, innovative jobs and upgraded knowledge and skills”. Some actions would consist of:
Designing public buildings and spaces for flexibility, adaptability, and long-term use, reducing the need for frequent redevelopment.
Encouraging the adoption of construction techniques that minimise resource use, incorporate recycled materials, and maximise energy efficiency.
Integrating circular business models into procurement practices, prioritising products with extended lifespans, repairability, and reuse potential.
Using Product-as-a-Service models in the operation and maintenance of municipal or regional assets, such as building equipment and furniture, to reduce waste and promote efficiency.
Establishing departments or programmes dedicated to the circular economy provides a centralised authority to co-ordinate initiatives, support local businesses, and remove barriers. In Rotterdam, the Netherlands, circular economy initiatives are the responsibility of the Rotterdam Circular support programme, led by the Rotterdam Municipal Executive and the Rotterdam Port Authority. Rotterdam Circular is responsible for the implementation of the Rotterdam Circularity Programme (2019-23). The tasks of the Rotterdam Circular include removing identified barriers to the circular transition, as well as setting requirements in public procurement processes to encourage entrepreneurs to supply circular products or services.
Appointing a transition manager in six Dutch regions (Utrecht, Gelderland, Nijmegen, Friesland, Brabant, and the Amsterdam Metropolitan Area) between 2015 and 2018 led to the establishment of regional partnerships, such as collaboration between businesses and knowledge institutions in Friesland for the valorisation of organic waste, and the development of sector-specific pilot projects in Gelderland focusing on construction and demolition waste. Transition managers also facilitated systemic change by aligning regional priorities with circular economy principles, including creating long-term agendas and securing stakeholder commitment for initiatives such as circular procurement in the Amsterdam metropolitan area.
Sources: City of Rotterdam (City of Rotterdam, 2019[3]), From Trash to Treasure - Rotterdam Circularity Programme 2019-2023, https://rotterdamcirculair.nl/; Cramer, Jacqueline M. (2020[4]), The Function of Transition Brokers in the Regional Governance of Implementing Circular Economy—A Comparative Case Study of Six Dutch Regions, https://doi.org/10.3390/su12125015.
Strategic vision refers to the development of a comprehensive circular economy strategy, building on (i) an analysis of stocks and flows; (ii) a mapping of existing circular economy-related initiatives; (iii) clear and achievable goals, actions and expected outcomes; (iv) budget and resources; (v) a shared understanding and co-creation with stakeholders to build consensus and vision; (vi) a monitoring and evaluation framework (OECD, 2020[1]). Survey responses reveal that there is room for improvement towards a circular economy vision with clear goals that are consistently achieved and monitored. In the most advanced of the cases, circular economy strategies are in place, but results are not yet determined (27%), while for the majority of respondents (39%) a strategic vision is still in the planning or development phase (Table 3.3).
Note: Based on 63 responses to the question: “Strategic vision: Is a strategic vision for the transition towards the circular economy developed and implemented?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Lack of long-term vision and strategic framework. Several cities and regions lack a stand-alone strategy for the circular economy, resulting in fragmented efforts and missed forward-looking targets. They may also focus on short-term, time-limited projects (e.g. specific pilots, EU-funded initiatives) that lack the scope for continuity. Finally, in some cases, existing frameworks are not fully articulated or implemented, lacking specific actions, timelines and integration into municipal and regional activities.
Difficulties in implementation. Often strategies are not accompanied by the human and financial resources that would be required to implement and scale up circular economy projects and initiatives.
Insufficient engagement of local actors. Some municipalities within a region often lack the capacity or engagement necessary to align with and implement circular economy goals at the regional level and they are often insufficiently engaged in circular economy strategies, leading to uneven implementation and limited impact at the local level. Additionally, efforts to engage local actors are often sporadic, and participation is not sufficiently supported through funding, technical assistance, or capacity building.
Lack of a systems approach. Circular economy principles are often integrated into waste management plans and fail to adopt a systemic, cross-sectoral approach. For example, there may be little or no consideration to identify how the circular economy can help reduce greenhouse gas emissions or have a positive net effect on job creation provided that workers acquire the skills required by the green transition, as argued by the EC Action Plan.
Challenges in monitoring results. Circular economy frameworks often lack practical and measurable indicators, with baselines and targets either undefined or not detailed enough for effective monitoring and implementation. The lack of robust data systems limits the ability to track progress and evaluate the impact of circular economy initiatives.
Policy recommendations
Key actions
A Checklist for Action: Strategic vision
✓ Inform the strategy by an analysis of stocks and flows.
✓ Map existing circular-economy-related initiatives.
✓ Define clear and achievable goals, actions and expected outcomes.
✓ Allocate necessary financial and human resources.
✓ Share and co-create with stakeholders to build consensus and vision.
✓ Link the strategy with various sectoral strategies.
✓ Regularly monitor and evaluate results.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Clearly identify what a circular economy strategy is for. The circular economy, as a means to an end, can contribute to the goals of carbon neutrality, economic growth while pursuing a just transition, or boosting innovation and creating job opportunities. As such, a strategy should be able to identify goals and actions that, by managing resources and material in a circular way, would determine a broader social, economic and environmental vision for the city/region.
Foster a whole-of-system approach, including upstream innovations (e.g. circular design, shared economy models) and downstream processes (e.g. repair, recovery, recycling) that cover the entire life cycle of products.
Prioritise, be realistic and inclusive. Priority policy areas for circular economy implementation, such as the built environment, tourism, food and water, should be selected on the basis of their potential to reduce environmental impacts, address pressing needs and support wider economic and governmental priorities. In addition, intermediate targets would allow for a gradual progress evaluation. Finally, as result of the co-creation process, it is important to identify the role of various stakeholders in implementing the shared vision.
Share to change, by regularly communicating progress towards circular economy goals, making achievements and challenges publicly available. This transparency will help build trust among stakeholders, including citizens and businesses, and ensure that the public is informed about the impact of ongoing circular economy initiatives.
By constitutionally obliging authorities to facilitate resource efficiency and material loop closure, the Canton of Zurich, Switzerland, set a precedent for institutionalising circular economy practices.
Specific targets within the 2019 strategy Beyond Recycling: A strategy to make the circular economy in Wales a reality helped the Welsh government (United Kingdom) determine a progressive direction for action: to reduce waste by 26%, avoidable food waste by 50%, zero waste to landfill, and increase recycling by 70% by 2023; to reach 33% reduction in waste and 60% in avoidable food waste by 2030. In 2050, the Welsh Government envisions a scenario where the county uses the equivalent to a one planet worth of resources, a 62% reduction in total waste and become net zero carbon.
To support the implementation of its Circular Economy Roadmap, the Eurométropole of Strasbourg (EMS) and the French Agency for Ecological Transition (Agence de l’environnement et de la maîtrise de l’énergie, ADEME) signed the 2020-23 Waste and Circular Economy Contract of Objectives (Contrat d’Objectifs Déchets et Économie Circulaire, CODEC) in 2020, aiming to (i) mobilise economic players to action towards a circular economy, (ii) reduce household waste from 248 kg to 233 kg per capita in the 2018-23 period, and (iii) reduce the production of all managed and assimilated waste from 448 kg to 430 kg per capita in 2023 relative to 2018. The CODEC also identified key areas of intervention, including eco-design, industrial and territorial ecology, responsible consumption and the extension of products’ lifecycles in the region.
Sources: Zero Carbon Academy (2023[5]), Circularity in cities: the case of Zurich, https://www.zerocarbonacademy.com/posts/circularity-in-cities-the-case-of-zurich; Welsh Government (2021[6]), Beyond Recycling - a strategy to make the circular economy in Wales a reality, https://www.gov.wales/written-statement-beyond-recycling-strategy-make-circular-economy-wales-reality; Eurométropole of Strasbourg (2024[7]), Roadmap: Circular economy of the Eurométropole of Strasbourg.
Awareness and transparency involve fostering a circular economy culture by raising awareness among citizens, businesses, and stakeholders; promoting sustainable production and consumption; and enhancing trust through transparent practices that remove cultural barriers and increase social acceptance. Almost 70% of cities and regions put in place dedicated awareness campaigns for stakeholder groups and some of them declare to be advanced in terms of awareness raising (Table 3.4).
Note: Based on 63 responses to the question: “Awareness and transparency: Is a circular economy culture promoted?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Lack of awareness of what the circular economy is and how to get there. The circular economy is still often perceived as a synonym for sustainable waste management or as a way to brand small-scale initiatives of reuse or service sharing (e.g. bikes). The lack of understanding of the circular economy by public administrations limits the integration of circular principles into urban development and environmental resource management.
Awareness campaigns focusing on waste management (e.g. zero waste, repair) rather than the full range of circular economy upstream and downstream actions that would require collaborations and partnerships along different value chains. As a result, the business community is often unaware of the regulatory and economic instruments available to facilitate the transition, while citizens understand the concept of the circular economy as recycling.
Information fragmentation on circular economy opportunities. Businesses struggle to identify available tools such as subsidies, grants and regulations to support the transition to a circular economy. There is often no centralised communication channel, such as a dedicated website or office, to provide consolidated resources and guidance on circular economy initiatives.
Limited support for responsible consumption and sustainable production. Efforts to build trust and promote sustainable choices, such as the use of certificates, labels and awards, are either absent or under-utilised, reducing incentives for the uptake of circular solutions. Regional and local initiatives to raise awareness of circular economy principles, such as reuse centres or sustainable consumption guides, remain underdeveloped or unimplemented. Without mechanisms to meaningfully engage citizens, circular economy initiatives risk low participation and limited behaviour change.
Policy recommendations
Key actions
A Checklist for Action: Awareness and transparency
✓ Develop clear communication.
✓ Create spaces for dialogues and practice exchange.
✓ Set up communication campaigns to show the impacts of the circular economy, how citizens and different actors can contribute to it and share success stories.
✓ Develop a dedicated website to share knowledge, good practices concerning the circular economy.
✓ Organise events for knowledge sharing, networking and the promotion of the circular economy at the local level, as well as conferences and seminars at schools and universities.
✓ Use social media to provide quick updates and information on the topic and related events.
✓ Promote certificates, labels and awards that can enhance trust and lead to more conscious production and consumption choices.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Develop “circular dialogues” for sectors lagging behind the circular transition and showcase the costs and benefits of the implementation of circular business models.
Set up targeted awareness-raising initiatives (e.g. youth, tourists, business) to inform on how many resources are consumed per capita in the city/region, how waste is treated, and the benefits of reuse and reduced consumption.
Showcase best practices and use “circular ambassadors” from companies to exemplify positive results in awareness-raising campaigns amongst businesses and investors.
Launch a people-centred campaign for the circular economy building on traditional practices and local sectors, highlighting local heritage, knowledge, identity, and history. For example, the campaign could incorporate images of local actors, such as individuals and/ or companies’ employees, the city/region can emphasise the role these stakeholders play in transitioning to a circular economy and inspire actionable steps. The campaign could focus on "R-strategies" such as reduce, reuse, repair, recycling, among others.
To raise awareness, the city of Ljubljana, Slovenia, designed a website in which 38 circular practices are listed. Measures concern retrofitting of public buildings, shared bicycle fleet, reuse of tyres and others.
To promote sustainable consumption, Paris, France, launched in 2023 a city map to help residents find places to consume sustainably (e.g. repair shops, solidarity shops, resource centres, bicycle workshops).
In 2024, the government of France announced a new sustainability label for electric and electronic equipment titled “Sustainability Index”. Its objective, as part of France’s law against waste, is to combat planned obsolescence by informing citizens on their choices of electronic equipment and holding producers accountable for product reparability and endurance. The Sustainability Index has been proposed as the evolution of the Repairability Index, introduced in 2021, and will progressively replace the latter, starting with washing machines and television sets in 2025. The index rates devices on a 0-10 scale based on two categories of criteria: Repairability, and Reliability. Repairability is assessed based on documentation, ease of disassembly, and the availability and price of spare parts. Reliability is measured by endurance, maintenance, and guarantee and quality assurance policies.
Since 2022, Circular Flanders, Belgium, has provided the Circular Ambassador Programme, a 7-day training course allowing participants to work on circular cases in various fields, including bioeconomy, circular construction, chemicals and plastics, manufacturing industry, food chain and water cycles.
Sources: City of Ljubljana (2024[8]), Circular economy examples in the City of Ljubljana, https://www.ljubljana.si/en/ljubljana-for-you/environmental-protection/towards-circular-economy/examples-of-circular-economy/; City of Paris (City of Paris, 2023[9]), Resource centres, recycling centres, repairers, solidarity shops, mapping, https://cdn.paris.fr/paris/2019/07/24/dc4e4f012a6cc1d7ff585f8fe4de282f.pdf; Government of France (2025[10]), Indice de durabilité, https://www.ecologie.gouv.fr/politiques-publiques/indice-durabilite; Circular Flanders (2022[11]), Turnover in the circular economy, https://cemonitor.be/en/indicator/effects/socio-economic/turnover-in-the-circular-economy/.
Co-ordination entails fostering collaboration across local, regional, and national levels of government to align objectives, address shared circular economy challenges, and prevent asymmetries or gaps in information among key actors. Survey results show that only 3% of cities and regions consider that co-ordination mechanisms across levels of government are functioning and leading to actions that are monitored and revised (Table 3.5). In 51% of cases co‑ordination mechanisms existed but were not fully implemented or had an experimental basis.
Note: Based on 57 responses to the question: “Co-ordination: Are co-ordination mechanisms across levels of government (e.g. regional, national, supranational) to implement circular economy initiatives in place?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Limited vertical co-ordination. Vertical co-ordination between national and subnational governments remains largely underdeveloped, with many strategies and action plans failing to incorporate formal mechanisms for such collaboration. Cities and regions signal that, in many cases, national frameworks do not adequately account for the roles of local governments or establish pathways for multi-level governance. Similarly, national and regional initiatives often overlook critical local challenges, such as resource management or waste classification, thereby limiting their impact. Local governments are frequently excluded from the design and implementation of national and regional circular economy strategies. This hinders their ability to align local priorities with broader goals and exacerbates the gap between strategic frameworks and practical application.
Fragmented horizontal co-ordination. Horizontal co-ordination across regional and local departments is often ad hoc and project-specific, with few formal mechanisms to ensure systematic collaboration. For instance, local and regional departments tasked with circular economy responsibilities lack clear structures or consistent communication protocols, resulting in policy misalignments and inefficiencies.
Instability in governance structures. Interdepartmental co-ordination groups, where they exist, are often temporary or lack the institutionalisation required for long-term impact. This reduces their ability to provide consistent support for circular economy initiatives. Also, the delayed establishment of dedicated co-ordination mechanisms, when foreseen in circular strategies, represents a challenge for implementing actions.
Policy recommendations
Key actions
A Checklist for Action: Co-ordination
✓ Strengthen co-ordination across levels of government.
✓ Consider the following options:
❏ Create ad hoc co-ordination bodies, such as committees, commissions, agencies or working groups.
❏ Organise ad hoc meetings for city-province-region-state co-ordination.
❏ Develop joint projects on the circular economy.
❏ Create shared databases and information systems.
❏ Set contracts/deals with the national government as tools for dialogue, for experimenting, empowering and learning.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Establish a circular forum for municipalities within metropolitan areas to foster dialogue and co-operation. The forum can identify shared challenges, prioritise actions and set common goals to enhance the co-ordination and scalability of circular economy initiatives. Regular meetings and collaborative workshops can ensure alignment on strategies, facilitate resource-sharing, and avoid duplication of efforts.
Initiate and maintain an open dialogue with the national government to align circular economy policies, funding schemes, and regulations. Cities and regions could advocate for national-level support to enable experimentation, ensuring that innovative projects receive adequate resources and regulatory flexibility for implementation.
Engage in international networks (e.g., EU circular economy platforms, OECD initiatives) to exchange knowledge and experiences. These platforms provide access to cutting-edge research, policy recommendations, and funding opportunities while fostering partnerships with like-minded governments and institutions. Engaging in such networks strengthens the capacity of local and regional authorities to implement circular economy strategies, align with global sustainability goals, and position themselves as leaders in the transition to a resource-efficient economy.
ReLondon, a circular economy partnership between the Mayor of London and London's boroughs, UK, has been running a built environment programme in 2024 to strengthen collaboration between London's 33 local authorities, the GLA and industry partners to accelerate the transition to a circular economy in the built environment. The programme is developing an evidence base for new policy, facilitating knowledge sharing and capacity building, and supporting practical implementation through action groups in partnership with industry. The programme aims to disseminate all circular economy actions undertaken by local authorities in recent years, set commitments to embed circular economy principles in public building projects, and develop the necessary physical and digital infrastructure to facilitate circular supply chains in Greater London.
The Brussels Regional Programme for a Circular Economy (BRPCE) established a multi-level governance structure to enhance co-ordination among stakeholders. It comprises 111 measures across four strategic areas, including governance measures aimed at reinforcing co-operation between different levels of government. The BRPCE Steering Committee, composed of the prime minister, responsible ministers, and associated ministers, oversees implementation, meeting biannually or as needed to make key decisions. It includes regional partners such as Brussels Environment, Brussels Economy and Employment, and the Brussels Planning Agency, among others. Operational co-ordination is managed by an inter-agency committee involving Brussels Environment, impulse.brussels, Bruxelles-Propreté, and Innoviris, which oversee the programme’s day-to-day execution.
Sources: ReLondon (2023[12]), Built Environment, https://relondon.gov.uk/built-environment, OECD (2023[13]), The Circular Economy in Tallinn, Estonia, https://doi.org/10.1787/06abc3de-en.
Policy coherence involves integrating circular economy principles into different policy areas, such as environmental, industrial and regional development policy. This systemic approach requires aligning policies, engaging different actors around common goals, and continuously adapting policies to drive system-level change. Based on the Scoreboard, cities and regions argue having identified synergies across policies, but in the best of cases, these synergies have only partially been implemented (54%) (Table 3.6).
Note: Based on 60 responses to the question: “Policy coherence: Is the circular economy initiative linked to other strategies, plans and programmes developed by the local/regional government (e.g. smart, green, sustainable, etc.)?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Lack of cross-cutting perspective. The circular economy is frequently treated as an additional policy priority rather than as a strategic, cross-cutting framework that could help achieve multiple objectives.
The waste-centric perspective of the circular economy. In some cases, circular economy policies are limited to waste management and recycling, without extending to more transformative strategies such as reduction, reuse or resource refusal. This narrow focus limits the scope of circular economy initiatives and their contribution to regional objectives.
Misalignment across strategies. Many cities and regions face the challenge of misalignment when integrating circular economy principles into their policy frameworks. This issue often arises when sectoral strategies, developed independently, fail to align their objectives and focus areas, leading to fragmented efforts and missed opportunities for comprehensive action.
Policy recommendations
Key actions
A Checklist for Action: Policy coherence
✓ Identify synergies across policies and plans (e.g. climate adaptation, mobility, land use)
✓ Strengthen co-ordination across policies and governmental departments (horizontal co-ordination)
✓ Embrace adjustments throughout the policy cycle, with implications on how institutions, processes, skills and actors are organised
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Map sectoral initiatives (e.g., agriculture, water management, urban planning, tourism) to identify those that could benefit from circular economy principles. This mapping could assess existing initiatives that already refer to circular economy concepts and explore potential synergies, overlapping objectives, and complementary policies. This process would guide the integration of circular economy principles into broader local/regional development and innovation strategies.
Align circular economy principles with broader priorities, such as climate action and regional development, to maximise impact and foster synergies across sectors. This alignment would position circularity as a central pillar for achieving sustainability, enhancing industrial competitiveness, and fostering inclusive economic growth.
Integrate the circular economy into climate action plans. Cities aiming for ambitious goals like carbon neutrality can use the circular economy as a tool to reduce emissions, shift consumption patterns and ease pressure on natural resources. This alignment ensures that circular economy policies are not developed in isolation but become part of the overarching climate agenda.
Recognise the circular economy as a driver of innovation and development. The circular economy could contribute to regional goals through dematerialisation, resource efficiency and nature regeneration.
The Province of Zuid-Holland, Netherlands, has integrated circular economy principles into its spatial strategy. The 2022 Circular Zuid-Holland Spatial Strategy, which promotes long-term multi-stakeholder collaboration, recognising that circular supply chains often cross municipal boundaries and are hindered by fragmented regulations.
In France, the Eurométropole of Strasbourg (EMS) is leveraging the Areas Committed to Ecological Transition label, awarded by the ADEME, to guide municipalities in strengthening their circular economy strategies. The EMS has actively sought to enhance its rating, aiming to improve its score from one to three stars by 2024, reflecting a deeper integration of circular economy principles. In Ireland, the Northern and Western Regional Assembly has embedded circular economy objectives into its Regional Spatial and Economic Strategy (2020-2032). This strategy supports waste self-sufficiency, resilient infrastructure, and low-carbon urban development, aligning with broader national and European sustainability goals.
The circular economy is identified as a means to contribute to environmental objectives and is integrated in many local/regional initiatives, including Valladolid in Spain (where the climate agreement includes the circular economy as a contribution to the 2030 decarbonisation mission, and implements circular economy principles into urban water, energy, waste and mobility sectors), Braga in Portugal (which integrated the circular economy in its Climate Action Plan, Energy Plan and Sustainable Climate Plan), Bodø in Norway (included in the Climate and Energy Plans, Waste Management and Municipal Master Plans), Møre and Romsdal in Norway (where the Environment, Climate and Energy Strategy 2023-2026 includes the circular economy as a focus area to reduce greenhouse gas emissions and minimise pressure on natural resources).
Zuid-Holland, Netherlands has integrated circularity into its 2020-2023 Clean Energy for Everyone implementation programme, which aims to reduce carbon emissions by 49% by 2030, being one of the pillars of the production of energy from waste by implementing waste-to-energy solutions. The Province also plans to publish an integrated energy and industry strategy, embedding circularity within its sustainable industry framework. In Berlin, Germany, the Senate Department for Economy, Energy, and Public Enterprises commissioned a 2023 study on the potential of a circular industry, highlighting key enablers such as mandatory recycled material use and digital product passports.
Sources: City of Valladolid (City of Valladolid, 2023[14]), Acuerdo climatico de la ciudad de Valladolid, https://www.valladolid.es/es/actualidad/noticias/ayuntamiento-valladolid-aprueba-acuerdo-climatico-objetivo: City of Braga (City of Braga, 2024[15]), Braga Municipal Climate Action Plan, https://bragaverde.pt/wp-content/uploads/2024/05/pmac-braga_volume-ien.pdf; OECD (2024[16]), The Circular Economy in the Eurométropole of Strasbourg, France, https://doi.org/10.1787/34437543-en; OECD (2024[17]), The Circular Economy in Zuid-Holland, Netherlands, https://doi.org/10.1787/d568d66e-en; OECD (OECD, 2024[18]), The Circular Economy in Berlin, Germany, https://doi.org/10.1787/459defe7-en.
Stakeholder engagement emphasises the promotion of collaboration between public, private and non-profit actors by facilitating the exchange of information, sharing of experiences and agreements. There is no prevalent model for stakeholder engagement, as according to the Survey sample, activities are either planned or in development (36%), in place, but either not implemented or not fully implemented (37%) or in place and functioning at various degrees (27%) (Table 3.7).
Note: Based on 62 responses to the question: “Stakeholder engagement: Is collaboration across the public, private and not-for-profit sectors fostered to boost the transition?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Low business and citizen engagement. Despite existing initiatives, involving businesses and citizens in the circular economy remains a significant challenge for most cities and regions. Overall, although universities, research centers, and technological institutes are engaged in promoting the circular economy, their involvement is often restricted to isolated initiatives rather than being integrated into broader multi-stakeholder frameworks.
Limited engagement beyond small-scale initiatives. Outside of specific sectors where the integration of circular economy principles is more widely implemented (e.g. the built environment in some cities and regions), where some companies independently adopt circular practices, fostering broad participation across industries and communities remains a significant hurdle for cities and regions.
Ineffective multi-stakeholder mechanisms. Mechanisms designed to foster stakeholder co-operation, such as advisory councils or participation platforms, have not prioritised the circular economy or made full use of stakeholder networks. Tools such as interactive maps for stakeholder engagement are not fully exploited and remain relatively unknown. In some cases, mechanisms involve fewer stakeholders than originally planned, excluding key groups such as consumer organisations, trade unions and neighbourhood associations. Initiatives such as webinars and onsite meetings often prove ineffective, and businesses and residents are not consistently represented in the decision-making processes for circular economy strategies.
Project-based engagement and lack of continuity. Collaboration between governments, businesses and research institutions is often on an ad hoc or project-specific basis, limiting the development of a cohesive and active ecosystem to drive the transition to a circular economy. While some regions have achieved isolated successes in stakeholder engagement, these efforts lack continuity and are not based on open, sustained dialogue.
Policy recommendations
Key actions
A Checklist for Action: Stakeholder engagement
✓ Engage with academia and research centres to build knowledge, experiments and carry out specific analyses on flow, stocks and material input and outputs.
✓ Find solutions to close, narrow and slow the loops, for example digitalising information and data.
✓ Create interactive online platforms to encourage stakeholders to exchange information with each other on their needs and monitor the activities and updates of the platform.
✓ Provide opportunities for collaboration through multi-stakeholder platforms.
✓ Stimulate demand for new solutions (e.g. modular buildings) to be developed through joint actions between knowledge centres and the business sector.
✓ Identify possible pilots and experimentations that would involve research and development (R&D) and university departments, based on the needs of the municipality or the regional government (e.g. circular activities in sector such as mobility, tourism, food, waste, bioeconomy, etc.).
✓ Collect academic and business proposals to put in place circular activities with social impact and consider support for implementation (e.g. financial support for students).
✓ Create coworking spaces for cross-fertilisation amongst several actors.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Map stakeholders by considering their interests, influence, and potential contributions to a circular economy roadmap/ strategy. As part of this exercise, it would be important to identify "less visible" actors with relevant capacities and resources for the circular economy transition.
Create a community of experts. The community could include representatives from industries, as well as academia, NGOs and government bodies. Joint problem-solving sessions, the development of action plans and the establishment of evaluation and monitoring mechanisms would help to prioritise and implement circular economy actions.
Integrate circular economy concepts into existing stakeholder engagement initiatives, such as those focused on waste management. Regular meetings could be used to identify leading actors in circular economy efforts and integrate them into broader strategic discussions, ensuring that both established and emerging stakeholders are involved.
Involve actors from industrial areas and startup incubators, in the development of future circular economy strategies. These networks can provide innovative solutions and entrepreneurial insights to support the transition, particularly in areas such as business model innovation and sustainable product development. Consider establishing formal co-operation agreements with universities and research centres to support long-term circular economy research and innovation.
Support bottom-up initiatives by providing funding, technical assistance, amongst others. Creating an enabling environment through simplified regulations, capacity-building programmes, and networking opportunities could ensure that bottom-up solutions contribute effectively to broader circular economy objectives while engaging citizens and businesses in meaningful ways.
Use a variety of engagement platforms such as surveys, interviews, roundtable discussions and co-design workshops to gather local insights and ensure that the strategy reflects the needs and priorities of all stakeholders. Regular workshops, co-design sessions, and community forums will facilitate the identification of circular economy opportunities and ensure collective ownership of the transition process.
Showcase progress and results. Transparent communication about achievements, challenges, and next steps of circular economy initiatives could ensure sustained engagement and a collective focus on overcoming barriers.
The increasing academic focus on the circular economy is evident in the rise of scientific publications on the topic, particularly in the EU27, where the share of related articles surged from 0.01% in 2010 to 1.29% in 2023. In Central Macedonia (Greece), the One-Stop Liaison Office fosters collaboration between universities, research centers, and industry, enhancing circular innovation pathways. Similarly, Berlin’s House of Materialisation drives applied research on sustainable business practices, creating real-world applications for circular economy principles. Likewise, in the Valencia Region (Spain), the Network of Chairs for the Transformation of the Economic Model unites five regional universities to support public policy design and knowledge dissemination in critical areas such as circular water management, digitalisation, and climate change adaptation.
In Bodø, Norway, the CityLab Stakeholder Platform (2019-2023) combined physical and virtual engagement methods, integrating 3D visualisations to facilitate community input on urban development. A dedicated information portal ensures structured feedback from citizens, civil society organisations, and local businesses, enhancing transparency and participatory governance.
In Apeldoorn, Netherlands, a co-design process for public space renovation maps collaboration among stakeholders, leveraging digital tools to structure participation and communication strategies throughout project phases. Seville, Spain, has developed a centralised City Simulation Platform that integrates multiple software tools and datasets to advance circularity objectives. This includes a Construction and Demolition Waste Flow Optimisation Instrument, which supports efficient waste management, and a Wellbeing Monitoring Tool, which assesses the social impacts of circular interventions. By facilitating data exchange and promoting informed decision-making, these platforms enhance cities' ability to implement systemic circular economy strategies.
Sources: OECD (2024[19]), The Circular Economy in Central Macedonia, Greece, https://doi.org/10.1787/19f00380-en; OECD (2024[18]), The Circular Economy in Berlin, Germany https://doi.org/10.1787/459defe7-en; European Commission (2025[20]), Scientific articles on circular economy, https://www.eea.europa.eu/en/circularity/thematic-metrics/enabling/scientific-articles-on-circular-economy; CityLoops (2025[21]), CDW Replication Package 2, https://cityloops.eu/fileadmin/user_upload/RP2-stakeholder_engagement.pdf.
Appropriate scale involves implementing circular economy solutions at the most relevant level, across administrative boundaries, to strengthen urban-rural linkages and regional synergies. This includes supporting small-scale pilots, fostering industrial-urban symbiosis and working with service providers to effectively test and scale circular initiatives. Almost half (51%) of survey respondents reported that circular economy initiatives are experimented at various scales and favour urban-rural linkages, where appropriate and in some cases, they are embedded into a territorial approach (Table 3.8).
Note: Based on 59 responses to the question: “Appropriate scale: Are circular economy initiatives implemented at the most appropriate scale?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Limited territorial approach. Many circular economy initiatives are confined to micro or meso-level projects, without a broader territorial scope. For example, in many regions, industrial symbiosis projects remain restricted to industrial areas and have not expanded into commercial areas or neighborhoods, preventing the full realisation of a territorial approach to circular economy transition.
Barriers to circular supply chains. Circular supply chains, which often span multiple municipalities or regions, face logistical challenges due to the multiplicity of permits required for the transport of secondary materials. This hampers the efficient functioning of circular supply chains and reduces the effectiveness of circular economy strategies. This fragmentation limits the functionality of circular supply chains and discourages businesses from adopting circular practices on a larger scale.
Waste management challenges. In some cities and regions, waste management systems are inefficient and contribute to resource mismanagement. Waste management practices remain siloed and often focus narrowly on recycling or waste treatment, such as incineration, which may occur outside the region. Fluctuating costs for waste incineration further complicate waste management, diverting focus from strategies to reduce waste generation and reuse materials. Moreover, the lack of harmonised methodologies and targets for waste sorting, collection and treatment across jurisdictions undermines the scalability of circular economy practices.
Limited upscaling. Pilot projects, such as in the building sector, are often experimental and restricted to specific areas. In many cases, not only do they fail to address the broader requirements of a holistic circular economy, such as resource reuse, lifecycle extension, and secondary material markets, but they also lack the scale and integration needed for systemic impact.
Policy recommendations
Key actions
A Checklist for Action: Appropriate scale
✓ Facilitate territorial linkages between urban and rural areas.
✓ Facilitate neighbourhood or community-based plans and initiatives.
✓ Experiment circular economy projects at small scales (e.g. a university campus, a neighbourhood, a city district).
✓ Identify industrial and urban symbiosis opportunities.
✓ Evaluate partnerships with local or metropolitan service operators to apply the circular economy at the metropolitan level.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Create testbeds and living labs for circular economy solutions. These spaces should enable the development, testing and scaling of innovative technologies and business models aimed at closing, narrowing and slowing material loops. Cities can designate specific neighbourhoods or districts as innovation hubs where businesses, residents, and researchers can test new circular practices, such as material-sharing platforms, decentralised recycling systems, or bio-based materials.
Start small and scale up by launching small-scale circular economy initiatives in specific areas such as university campuses, neighbourhoods, or local districts, with the idea of scaling them up. These pilots would serve as testing grounds to assess the feasibility, scalability and impact of circular economy strategies before wider implementation.
Link urban and industrial symbiosis by identifying and developing synergies between urban development projects and existing industrial symbiosis clusters, focusing on the exchange of materials, energy and space. Options could include projects such as the use of industrial waste heat for district heating, the establishment of shared composting facilities for nutrient recovery, or the promotion of local remanufacturing of textile waste.
Since 2013, three symbiotic clusters have been created in the Eurométropole of Strasbourg (EMS) - CLES, Rhenan Ecoparc and Plaine des Bouchers. Created in 2013, Coopérations Locales et Environnementales en Synergies (CLES) is an industrial symbiosis complex that brings together 32 companies from the Port of Strasbourg. From 2020, 23 companies within the existing Rhenan Ecoparc have identified more than 70 possible symbiotic links between themselves through workshops. In 2023, the EMS launched an initiative to create a new industrial symbiosis network in the south of its territory (Plaine des Bouchers), but no further official information is available on this project.
ECO3 is a public-private partnership established in 2014 and led by the City of Nokia, Finland, based on collaboration between private companies and universities. By 2020, the ECO3 network will include 28 partner organisations from different industries. Since the start of industrial symbiosis activities, an estimated EUR 70 million in committed investments have been achieved and around 200 jobs have been created. ECO3 uses urban inputs and outputs in its operations: for example, the integration of a biogas plant in ECO3 triggered a tender for gas-powered vehicles in the city and the construction of two private filling stations for commercial use.
In 2023, the Region of Central Macedonia invested EUR 2.3 million in the construction of the first industrial symbiosis park (i.e. Circular Economy Park) in Thessaloniki, which is expected to connect more than 60 industrial companies by 2027. To guide the early development of the park, the region has launched an action plan for the period 2023-2027. The action plan foresees a series of steps: (i) defining the boundaries of the symbiotic system, (ii) recording and categorising the input and output flows of the participating industrial units, (iii) identifying possible symbiotic actions, (iv) checking the compatibility and possible synergies between the companies, (v) creating cohabitation scenarios for sharing space and resources, and (vi) evaluating the scenarios. The regional government plans to launch the industrial symbiosis area by 2027.
In 2022 the Møre and Romsdal County Council launched the 2023-2026 Strategy for Environment, Climate and Energy (Fylkesstrategi for miljø, klima og energi). The County Council supports five industrial symbiosis pilot projects: one to test the potential for regional algae production using CO2 from an incineration plant; one on the exchange of by-products across business; two on the optimisation of resources in the and Sunndal Industrial parks; one to facilitate circular value chains for aluminium. These pilot projects are supported by the Skaparkraft project, which has allocated EUR 1.5 million per year from 2022 to 2032 for the development of circular value chains.
Since 2020, the Region of Valencia has been trying to stimulate innovation and material exchange between companies. Projects led by the Technological Institute for Metalworking, Furniture, Wood, Packaging and Related Industries (AIDIMME) have identified opportunities for cross-sector collaboration by creating an intelligent digital ecosystem, developing diagnostic and feasibility analysis tools (e.g. Circulariza), promoting industrial symbiosis potential and facilitating co-operation. Recent projects have focused on more specific issues, such as the recovery of valuable materials from industrial waste, including wastewater, heavy metals (chromium, copper) or automotive catalysts. AIDIMME developed and launched SIMBYLAY, a free web platform where companies in any sector can sell or donate their surpluses to other companies. Similarly, but with a focus on the hospitality sector, the ECO-ONE platform developed by the Hotel and Tourism Business Association of the Region of Valencia (HOSBEC) allows hotels to sell and buy second-hand furniture. In addition, the Valencia Innovation Capital initiative, developed by the Valencia Region Foundation for Strategic Promotion, Development and Urban Promotion, uses the city as a testing ground, bringing together actors (e.g. technology centres, SMEs) to develop solutions to urban challenges.
Sources: Lander Svendsen (2021[22]), Guide: How can municipalities support the development of industrial symbiosis, https://symbiosecenter.dk/wp-content/uploads/2021/01/Guide-how-can-municipalities-support-the-development-of-industrial-symbiosis-final-version.pdf; Thessaloniki Chamber of Industry (2023[23]) Action plan for the creation of a circular economy park in Sindos; Municipality of Paterna (2025[24]); Simbiosis Industrial, https://www.lokinn.com/sinergias/paterna-ciudad-empresas; ECO-ONE (2020[25]), La primera plataforma de compra y venta de muebles entre hotels, https://eco-one.es/mercado-segunda-mano/?utm_source=newsletter&utm_medium=email&utm_campaign=hosbec.
Regulation means adapting regulatory frameworks to support the transition to a circular economy and includes clarifying regulatory uncertainties, allowing local adaptation, encouraging experimentation and using tools such as Green Public Procurement (GPP) to promote eco-efficiency and eco-design while guiding market transformation. Responses to the survey report that the majority of cities and regions are in the phase of identifying regulatory barriers or adapt regulation towards the circular transition (Table 3.9).
Note: Based on 58 responses to the question: “Regulation: Is regulation fit to foster the transition to a circular economy?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Fragmented regulatory landscape and barriers. Both public and private actors face significant challenges in navigating the complex and often fragmented regulatory frameworks that define waste management and circular economy initiatives. Companies transitioning to circular business models face regulatory barriers when trying to use recovered materials as substitutes for virgin materials. The complex processes for obtaining end-of-waste classification or by-product status, combined with stringent certification requirements, discourage companies from adopting circular solutions. Existing regulations, including building codes, taxation and certification standards, predominantly favour linear economic practices. The lack of systemic alignment with circular economy principles, such as reuse, reduce and rethink resource use, undermines the effectiveness of regulatory frameworks and perpetuates a reliance on waste management over prevention and resource reuse.
Implementation and enforcement issues. Despite the existence of legal frameworks, such as commercial waste regulations or green public procurement laws, their implementation remains limited in many cities and regions due to enforcement challenges and capacity issues, resulting in low compliance rates. In many cases, efforts to introduce mechanisms such as pay-as-you-throw (PAYT) systems are hampered by legal delays and a lack of supporting digital infrastructure.
Limited integration of Life Cycle Analysis (LCA). Public procurement frameworks, while capable of integrating LCA criteria, often lack the internal capacity and clear guidance to do so effectively, resulting in missed opportunities to promote sustainable design and production practices.
Policy recommendations
Key actions
A Checklist for Action: Regulation
✓ Identify cases in which it is possible to adapt the regulation (e.g. land use, permits) at the local level.
✓ Establish a dialogue with the national government on needed regulatory frameworks updates when the responsibility goes beyond that of cities and regions.
✓ Implement green public procurement.
✓ Establish clear requirements in tenders to foster the use of circular economy principles:
Apply a life cycle analysis approach.
Carry out market analysis and stimulate demand.
Stimulate a dialogue among the governmental departments and areas involved in promoting the circular transition.
Consider dividing public tenders into lots that enable SMEs and local entrepreneurs to participate in tenders.
Create a monitoring and evaluation framework for green public procurement.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Use regulatory sandboxes to allow businesses and innovators to trial new processes, products, and business models under a controlled and supportive regulatory environment. This approach encourages experimentation while safeguarding environmental and social standards. The sandbox could be tailored to accommodate circular practices such as industrial symbiosis, material recovery innovations, and product-as-a-service models. Insights gained from the sandbox can inform permanent regulatory frameworks that remove barriers to scaling successful circular solutions.
Streamline and harmonise permits to provide clear, standardised guidelines and timelines for the application of circular economy principles in the building, transport, food and other sectors. This would reduce administrative burdens and encourage businesses to adopt circular practices. Digital platforms can further enhance efficiency by enabling real-time tracking and submission of required documentation.
Introduce circular economy targets for circular practices in priority sectors such as construction, packaging, electronics, and textiles. These targets should focus on waste reduction, material recovery rates, and the integration of secondary materials into production. For instance, public procurement requirements could consider minimum recycled content in packaging or require construction projects to achieve specific levels of material recovery in the end-of-life phase. Regular monitoring and enforcement mechanisms should ensure compliance and provide data to refine future policies.
In the United States, innovative policies are emerging at subnational level to increase producer responsibility and material recovery. Washington is set to become the first state to implement Extended Producer Responsibility (EPR) for solar panels in 2025, requiring manufacturers to fund the collection and recycling of photovoltaic panels. This initiative is expected to strengthen recycling markets, particularly for aluminium and glass, which are key components of solar panels. At the same time, efforts are being made to include solar panels in existing certification standards for recyclers to promote responsible materials management. Similarly, California's Plastic Pollution Prevention and Packaging Producer Responsibility Act requires that all single-use packaging and plastic food service ware sold in the state be recyclable or compostable by 2032. The law also sets targets for 65% recycling of these materials and a 25% reduction in their sale, encouraging a more circular approach to plastic use.
In 2024, the city of Valencia, Spain, launched an Urban Sandbox initiative to use urban spaces, infrastructure and events as testing grounds for innovation and circular economy projects for companies to develop new technologies or business models. These companies can carry out trials and test solutions before making significant investments. Examples of projects tested in the Urban Sandbox include a beach cleaning robot, which works in a similar way to domestic robots but is adapted for beach environments. Designated beach zones have been used to trial this technology. Another initiative involves retrofitting urban streetlights to serve a dual purpose, providing lighting and acting as charging stations for electric vehicles. In addition, sports facilities are being used to test new products and services aimed at reducing energy consumption while maintaining or improving quality and comfort standards.
The Province of Zuid-Holland, Netherlands, uses a variety of tools to promote sustainable practices, such as sustainable public procurement criteria, and a web tool to help organisations apply the ISO 20400 on Socially Responsible Purchasing. These tools are complemented by procurement strategies, support for buyer groups (e.g. research, knowledge, purchasing advice) and the Circular Procurement Acceleration Network (Versnellingsnetwerk Circulair Inkopen, VCI in Dutch). VCI connects public organisations to one another to facilitate the integration of circular principles into their procurement activities, from understanding what circularity means in procurement to selecting the right products.
The Berlin Tendering and Procurement Act (BerlAVG) and the subsequent Administrative Regulation on Procurement and the Environment (VwVBU) of 2021 contain comprehensive measures for green procurement, including information on environmental requirements, design guidelines and a list of procurement restrictions, such as disposable beverage packaging, disposable cutlery and tableware, and cardboard packaging with less than 70% recycled content. In addition, the VwVBU incorporates a Life Cycle Cost Analysis (LCA) for electrical equipment, road vehicles, data centres and passenger and freight elevators. The LCA analysis takes into account energy consumption, carbon and other pollutant emissions. While the current regulation has the potential to further reduce waste generation, it is not necessarily conducive to more innovative circular business models in internal procurement processes; the current regulation does not include or favour circular business models in procurement.
Sources: RSS (2023[26]), Local Government Funding for Solid Waste, https://apps.ecology.wa.gov/publications/documents/2307047.pdf; Valencia City Council (2024[27]), Valencia Innovation Capital Sandbox, https://www.valencia.es/web/sandbox/cas/inicio; IEEP (2017[28]), EPR in the EU Plastics Strategy and the Circular Economy: A focus on plastic packaging, https://zerowasteeurope.eu; OECD (2024[18]), The Circular Economy in Berlin, Germany, https://doi.org/10.1787/459defe7-en; OECD (2024[17]), The Circular Economy in Zuid-Holland, Netherlands, https://doi.org/10.1787/d568d66e-en.
Financing involves the mobilisation and efficient allocation of financial resources by facilitating access to different financial instruments, such as grants and venture capital, to support circular businesses, considering available budgets and funding opportunities. For 60% of surveyed cities and regions, financial instruments and/or a dedicated budget for circular economy initiatives and projects are planned or in development. (Table 3.10).
Note: Based on 57 responses to the question: “Financing: Are financial resources mobilised and efficiently allocated?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Limited financial power and competencies. Local and regional authorities often lack direct financial powers to provide structural support for circular economy activities. In many cases, financial support to businesses and organisations is limited by national or EU schemes, which restrict local authorities to ad hoc, project-based funding or temporary exemptions. Municipalities may also face fiscal constraints, such as the golden rule, which limits borrowing to capital investment. As circular economy initiatives often generate financial returns over an extended period of time, they may not meet traditional investment criteria, making it more difficult to secure funding.
Lack of a dedicated, long-term budget or ring-fenced funding for circular economy initiatives. While some frameworks, such as environmental funds or landfill taxes, have been envisaged or introduced, these mechanisms are not always operational, remain centrally managed or are insufficiently responsive to local needs. The absence of such funding streams leads to reliance on ad hoc or external sources, such as European programmes, which are not necessarily guaranteed in the long term. In some cases, circular economy activities are also redirected from waste management budgets, which focus primarily on downstream solutions, such as reducing landfill, rather than upstream initiatives such as separate collection, eco-design or prevention.
Challenges in mobilising private investment. Access to private finance remains a major challenge for circular economy initiatives. Private investors perceive the sector as highly risky due to the need to finance entire value chains rather than individual companies, as well as the competitive disadvantage of circular activities compared to dominant linear models.
Policy recommendations
Key actions
A Checklist for Action: Financing
✓ Facilitate access to finance and broaden the range of financial instruments for entrepreneurship.
✓ Liaise with the national government’s departments to clarify existing funding opportunities and with other cities to learn about their experience in catalysing financial resources.
✓ Create a scheme to offer subsidised loans or credit guarantees to companies following circular economy principles, in co-operation with private and semi-public financial institutions.
✓ Explore putting in place rewards to companies through corporate income tax, reduced VAT on products labelled as circular.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
De-risk investments in early-stage circular ventures to encourage private-sector participation and accelerate the development of scalable solutions. For example, Public-Private Partnerships (PPPs) can support the development of innovative solutions, such as circular industrial parks or resource-sharing platforms, that require substantial initial investment but offer significant long-term benefits.
Introduce green bonds to finance infrastructure projects such as modular construction initiatives, and sustainable transport systems. Tying bond issuance to measurable circular economy outcomes could help improve accountability, while attracting environmentally conscious investors. These bonds could be implemented to regenerate natural capital (e.g. restoring degraded soils); develop circular design to reduce waste and pollution; develop production processes that rely on or produce recycled resources; improve resource efficiency in supply chains; implement reverse logistics, including collection, segregation and recycling; and develop innovative technologies that enable circular business models (e.g. digital marketplaces) (Intesa Sanpaolo, 2024[29]).
Facilitate access to EU and international funding through dedicated support structures, such as advisory units or liaison offices, can help stakeholders navigate complex funding applications and maximise financial resources for circular initiatives. Additionally, governments can leverage co-financing mechanisms and partnerships with financial institutions to de-risk circular investments and ensure long-term economic viability.
Implement “pay-as-you-throw” (PAYT) schemes to incentivise citizens to reduce waste and foster reuse. The PAYT modulates waste management fees paid by users based on the amount of waste delivered to the waste management system (OECD, 2016[30]). It would provide an economic incentive for consumers to reduce and sort waste adequately at the source, reducing the amount of waste managed by local and regional authorities and improving the quality of collected recyclate, which could be used, for instance, to manufacture secondary material.
Green bonds offer city governments a viable mechanism to diversify their funding sources, reducing their reliance on public finances or the conventional banking system. This approach enables cities to finance projects that are in line with sustainability goals and might otherwise remain unfunded.
Toronto, Canada, has launched a green bond programme to help achieve its goal of net-zero greenhouse gas emissions by 2040. The programme channels green bond funds into the city's capital budget to support projects that integrate circular economy practices. Examples include using recycled or alternative materials in construction, adopting rental and maintenance-based consumption models, and upgrading infrastructure with advanced sustainable technologies.
Cape Town, South Africa, used a ZAR 1 billion green bond to address a severe water crisis between 2015 and 2018. The bond funded critical water management projects aimed at building resilience to future water shortages. To diversify its investor base, Cape Town also encouraged local residents to invest, promoting community engagement in sustainable urban development.
In the US, San Francisco has used green bonds to finance critical low-carbon and climate-resilient initiatives since 2015. Examples of financed initiatives include the rehabilitation of the Mountain Tunnel, an integral part of the Hetch Hetchy Regional Water System, which supplies drinking water to 2.7 million residents in the Bay Area.
In Norway, the Norwegian Agency for Local Government, part of the Ministry of Local Government and Regional Development, has issued green bonds to support municipal projects aimed at promoting a low-carbon and climate-resilient transition. These bonds have financed initiatives in several sectors, including energy-efficient building upgrades and improved waste management systems.
Lisbon, Portugal, allocated funds for participatory budgeting exclusively earmarked for environmentally friendly projects, amounting to EUR 2.5 million for the 2019-21 cycle. A total of 16 out of 251 proposals concerned the implementation of circular economy criteria into built environment projects.
In 2020, the city of Cleveland, United States, introduced the Circular Cleveland initiative, which included the Circular Cleveland Community Grants amounting to USD 40 771 from 2020 to 2023. The Circular Cleveland Grant Making Committee, composed of local residents engaged in circular economy efforts, selected recipients of funds based on their adherence to circular economy principles, community involvement and potential for initiative replication. Grant recipients used the funds to divert waste from landfills, reduce pollution, sustain the use of products and materials, and restore natural systems.
Between 2021 and 2024, the Netherlands offers subsidies for circular economy breakthrough projects that provide a total budget of EUR 400 000 for orchestrated efforts of 3-5 years. This subsidy requires an existing consortium of chain partners, a signed ambition document and an action plan to achieve a circular value chain. The subsidy is meant to implement the consortium’s action plan. The subsidy is aligned to the priority value chain included in the Dutch strategy A Circular Economy in the Netherlands by 2050 (i.e. plastics, consumption goods, construction, and manufacturing). The subsidy has been granted for projects in the construction, manufacturing, and textile industries.
In 2022, the city of Tübingen, (Germany) introduced a citywide tax on single-use plastic items as part of a broader strategy to promote reuse. The tax applies to EUR 0.50 for single-use food and drink packaging, including disposable coffee cups, food trays and takeaway boxes, and EUR 0.20 for single-use cutlery and straws. The tax on a single meal is capped at EUR 1.50. Data on the impact remains scarce, but city officials reported that an analysis of public waste bins in January 2022 showed a reduction of around 15%.
Sources: City of Toronto (2025[31]), Green Debenture Program, https://www.toronto.ca/city-government/budget-finances/city-finance/investor-relations/green-debenture-program/; WEF (2023[32]), What are Municipal Green Bonds and how are global cities using them to finance green projects?, https://www.weforum.org/stories/2023/11/heres-how-3-cities-are-using-municipal-green-bonds-to-finance-climate-infrastructure/; C40 (2022[33]), How to decide if green bonds are right for your city, https://www.c40knowledgehub.org/s/article/How-to-decide-if-green-bonds-are-right-for-your-city?language=en_US; OECD (2022[34]) Aligning Regional and Local Budgets with Green Objectives: Subnational Green Budgeting Practices and Guidelines; Sustainable Cleveland (2024[35]), What is Circular Cleveland?, http://www.sustainablecleveland.org/circular_cleveland; OECD (2024[18]), The Circular Economy in Berlin, Germany, https://doi.org/10.1787/459defe7-en; Zero Waste Europe (2022[36]), The Story of Tübingen, https://zerowasteeurope.eu/wp-content/uploads/2024/11/Tubingen-Case-Study.pdf.
Capacity building focuses on strengthening human and technical resources through targeted training for public administrations, the private sector and civil society. It supports technical expertise, policy development and the implementation of circular economy tools while fostering knowledge sharing and co-operation through networks and city-to-city learning initiatives. Only 14% of surveyed cities and regions have specific capacity-building programmes in place, tailored to different needs and stakeholders and able to develop new skills and technical competencies (Table 3.11).
Note: Based on 59 responses to the question: “Capacity building: Does human and technical capacity match the challenges for setting and implementing a circular economy system?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Insufficient human resources. Many local and regional authorities lack sufficient, long-term and dedicated human resources to implement circular economy initiatives. This lack of staff, which is exacerbated in smaller municipalities, undermines the enforcement, intergovernmental co-ordination and stakeholder engagement necessary for systemic change.
Limited skills in public administrations. Public officials often lack specialised training in circular economy principles, and existing capacity-building efforts are limited to basic awareness-raising sessions. These initiatives do not provide advanced skills in cross-sectoral co-ordination, data-driven decision-making and strategic planning. This skills gap also limits the ability of regional and local authorities to align their actions with national and EU circular economy objectives. As a result, efforts to integrate broader circular concepts such as resource optimisation, extended asset lifecycles and systemic innovation remain underdeveloped.
Lack of skills in the private sector. The private sector faces challenges in developing a skilled workforce capable of driving circular economy practices. Current education and training initiatives dedicated to professionals from the private sector often focus on general environmental practices without explicitly linking them to a circular economy framework, leaving a gap in sector-specific expertise. While human capital development agendas emphasise the importance of a skilled workforce, they often do not directly address the specific competencies required for the circular economy.
Under-exploited public-private collaboration. Knowledge hubs and centres of competence focused on circular economy practices, while effective in supporting private businesses, are poorly integrated with public sector initiatives. This disconnect reduces opportunities for knowledge exchange, technical support, and the alignment of public and private efforts towards circular economy goals.
Policy recommendations
Key actions
A Checklist for Action: Capacity building
✓ Develop training programmes on the circular economy within municipal departments and for the private sector.
✓ Review and analyse the required skills and capacities for carrying out all the activities associated with designing, setting, implementing and monitoring the strategy.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Make sure training is fit for purpose by:
Being tailored to specific departmental needs, highlighting roles in supporting new business models, job creation, and workforce development.
Framing the circular economy as a systemic approach beyond waste management, encompassing resource efficiency and sustainable economic growth.
Addressing circular economy strategies, including refuse, reduce, redesign, and reuse, as well as business models like product-as-a-service and sharing systems.
Including hands-on knowledge of analytical tools, such as Life Cycle Assessment and Material Flow Analysis, to improve policy design and implementation.
Being designed for regional and municipal staff in collaboration with academia and local entrepreneurs.
Including practical and conceptual training, objectives, and monitoring mechanisms to strengthen skills critical to the transition.
Being updated regularly to reflect the evolving landscape and ensure consistency in shared knowledge, particularly for remote and underserved municipalities to avoid leaving any city or region behind in the transition.
Develop circular economy skills forecasts in collaboration with key partners (e.g. chambers of commerce, business associations) to map existing capacities and anticipate future needs. This will ensure that education and training programmes are aligned with the needs of the private and social sectors.
Participate in peer learning networks that can enable knowledge exchange on circular economy practices. Mentorship programmes and structured dialogues between frontrunners and learning cities can accelerate capacity-building. Networks such as the Circular Cities and Regions Initiative (CCRI) exemplify this approach.
Leverage AI to enhance circular economy workforce development, analyse labour market trends, predict job displacement, identify up and re-skilling needs, promote circular business models, optimise supply chains, and enhance training programmes. Key partners (e.g., academia, industry leaders, and innovation hubs) could ensure that workers are equipped with AI and digital skills relevant to circular economy roles.
The EIT Campus, funded by the European Institute of Innovation and Technology (EIT) and the European Union, offers a wide range of programmes in innovation, sustainability and entrepreneurship. These educational initiatives aim to support the skills transition needed for a greener and healthier Europe. The platform includes courses that combine artificial intelligence (AI) with the circular economy. Topics covered include (i) Data analysis, to improve knowledge of supply chains and product lifecycles; (ii) Predictive maintenance and resource optimisation, to analyse the performance of machinery and equipment; (iii) Circular design and product lifecycle management, to promote sustainable product development; (iv) Supply chain optimisation, using AI to identify efficient routes, reduce transport emissions and minimise excess inventory; and waste management and recycling, using AI-powered robots and machines to sort and process recyclable materials, improve resource recovery and drive a circular economy.
AISkills4CT, a project co-funded by the Erasmus+ programme, aims to equip agri-food professionals with targeted knowledge and skills in AI technologies. The initiative supports the development of a circular food chain models by integrating environmental, social, economic and digital dimensions. The main objective of the project is to raise awareness and train agri-food professionals on the use of AI along supply chains, enabling a digital transformation of their industries, with a particular focus on how AI could facilitate and support the implementation of circular economy principles.
Sources: EIT Campus (2023[37]), 5 top professional domains that combine AI and circular economy skills, https://eit-campus.eu/blog/5-top-professional-domains-that-combine-ai-and-circular-economy-skills; AISkills (2024[38]) AISkills4CircularTransition, https://www.aiskills4ct-erasmus.eu/;
Innovation in the circular economy involves sustainable technologies as well as new partnerships and business models. Local and regional governments can foster innovation by creating experimental spaces, stimulating demand as “launching customers”, building stakeholder networks, supporting incubators for circular projects and providing centralised services to reduce transaction costs and encourage entrepreneurial involvement in the transition. A total of 43% of surveyed cities state that the enabling environment for supporting circular business innovation is in place (e.g. regulation, funds), implemented on an experimental basis (e.g. with the municipality acting as a launching customer) and in some cases for both large and small enterprises (Table 3.12).
Note: Based on 57 responses to the question: “Innovation: Are tools in place to support circular business innovation?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Little dialogue between subnational governments and business actors to identify barriers to the expansion of markets for circular products and ways to address those barriers. According to the EC Action Plan, the sustainability challenge posed by key value chains requires urgent, comprehensive and co-ordinated actions, that will contribute to the response to the climate emergency and will feed into the EU Industrial Strategy, as well as into the biodiversity, Farm to Fork and forest strategies. Companies often act in isolation and according to their level of ambition. They are not always aware of circular economy funding and programmes when they exist, and they are disconnected from the territory in which they operate.
Lack of a market for circular products and services. Efforts to stimulate demand for circular products and services remain underdeveloped. Apart from isolated examples (e.g. the use of recycled concrete in construction), there is a lack of systematic initiatives to match producers of circular goods and services with potential buyers or users, which hinders the growth of circular markets across different sectors.
Limited ability to drive innovation. Shortfalls in funding, regulatory incentives, incubators, networks and public-private partnerships limit the ability to drive innovation and entrepreneurship in line with circular economy goals. In addition, the innovation agendas of cities and regions are not necessarily linked to the circular economy. While innovation ecosystems exist, their connection to circular economy objectives is often minor or non-existent.
Lack of mechanisms to support start-ups in scaling up their operations. Without adequate support, emerging circular businesses struggle to achieve market viability and long-term impact. While pilot projects for circular economy initiatives are often launched, challenges remain in scaling them up to wider applications. Small and medium-sized enterprises (SMEs) face significant burdens from lengthy, bureaucratic application processes and increasing data requirements for environmental reporting, which strain their limited capacities.
Policy recommendations
Key actions
A Checklist for Action: Innovation
✓ Create spaces for experimentation.
✓ Stimulate demand by being a launching customer.
✓ Create stakeholder networks for material chains.
✓ Create incubators to promote circular economy projects.
✓ Establish a single window for the circular economy for businesses.
✓ Promote public-private partnerships.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Engage with businesses as key allies in the transition to a circular economy, facilitating open dialogue across sectors to identify industry-specific challenges and co-develop tailored circular economy solutions.
Foster collaboration between niche innovators and regime actors, breaking existing path dependencies across them. To this end, for example, cities and regions can stimulate a dialogue between niche actors and procurement officers to seek innovative ideas and provide economic incentives.
Facilitate the scaling-up of circular business models. Support businesses with the potential to scale up business practices after the pilot phase by navigating administrative processes, providing technical and regulatory guidance, and facilitating business support services.
Support challenge-based innovation calls for small and medium-sized enterprises to address market needs and societal challenges, including within the plastics value chain.
Leverage technology by exploring how digitalisation, including artificial intelligence, can optimise supply chains, marketing and logistics.
Create knowledge transfer hubs to ensure effective knowledge exchange between academia and business on circular economy practices and include specialised research streams in academic networks focused on strategic sectors for circular models.
The Two Banks District in Paris, France, is the first "circular district" in Paris to bring together businesses to co-create innovative solutions for the management, operation and development of their activities on a 350-hectare site. The Two Banks District relies on a digital collaboration platform that connects large companies, entrepreneurs, NGOs, citizen groups and policymakers to share best practices and co-create solutions. More than 30 companies can share equipment and services, recycle and upcycle waste in a synergistic way, reduce single-use food packaging, use carpooling services and manage waste collectively.
Wallonia, Belgium, has piloted a challenge-based innovation call to support small and medium-sized enterprises in addressing market needs and societal challenges in the plastics value chain. By focusing on a specific challenge and identifying the most promising solutions, the challenge-based approach has guided stakeholders in prioritising their efforts and investments, ensuring that resources are directed to the areas of greatest need.
To promote the circular economy, the city of Almere in the Netherlands, in collaboration with the province of Flevoland and the Dutch central government, launched the UpCycle City ideas competition in 2017. The competition encouraged start-ups, businesses and research institutes to develop innovative business cases for resource reuse and sustainable investment plans. Two winners emerged, one proposing a reuse initiative for local street furniture and the other planning to set up a concrete plant using mineral streams from the city. Both winners received EUR 3 million in co-funding over 3 years to implement their respective projects.
In the Basque Country, Spain, the Basque Ecodesign Center (BEdC) operates as a partnership among private firms, industrial clusters and the Basque government. Its aims to position the Basque Country as a leader in eco-design in the European Union. The main focus of the BEdC is the development of innovative technical projects on eco-design, including (i) the integration of life cycle thinking in supply chains, (ii) environmental assessment and improvement of organisations and buildings through a life cycle approach, (iii) research into and pilots of new circular business models and (iv) projects aiming to change consumption patterns.
Sources: IHOBE (2025[39]), Basque Ecodesign Center, https://www.basqueecodesigncenter.net; (Les Deux Rives (2020[40]), Les Deux Rives, Quartier circulaire, lesdeuxrives.paris; Wallonia Clusters (2020[41]), Call for Projects: Benefit from EUR 15k to take up a circular economy challenge related to plastics, https://clusters.wallonie.be/federateur/en/news/call-projects-benefit-15k-eu-take-circular-economy-challenge-related-plastics; Amsterdam InChange (2025[42]), Week of the Circular Economy #1: Upcyclecentre Almere, https://amsterdamsmartcity.com/updates/news/week-of-the-circular-economy-1-upcyclecentre-alm.
Data and assessment involve the creation of comprehensive information systems to monitor, assess and improve circular economy policies and strategies. This includes the collection of environmental, social and sector-specific data, such as resource flows, waste streams, circular job creation and existing initiatives, to improve policy making and support the transition to a circular economy. More than half of survey respondents (55%) struggle with data, which is either not yet collected or in development (Table 3.13).
Note: Based on 58 responses to the question: “Data and assessment: Are data and information collected and available to explore circular economy-related opportunities?” Survey respondents were invited to select one of the following options: “Planned”, “In development”, “In place, not implemented”, “In place, partly implemented”, “In place, functioning”, “In place, objectives achieved”. Responses selecting "not applicable" have been excluded from the chart.
Source: OECD (2024[2]), OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU).
Gaps
Data gaps in monitoring material efficiency and consumption footprint. This gap highlights a lack of understanding of why the transition to a circular economy is needed. As a consequence, there is a limited sense of urgency, and the circular economy is often seen as a way to brand waste-related actions. The EC Action Plan calls for analysing how the impact of circularity on climate change mitigation and adaptation can be measured in a systematic way; improving modelling tools to capture the benefits of the circular economy on greenhouse gas emission reduction; improving circularity metrics and indicators on resource use, including consumption and material footprints to account for material consumption and environmental impacts associated to production and consumption patterns to assess the progress towards decoupling economic growth from resource use and its impacts in the EU and beyond. While data on waste management are currently available, data on resource use and material management are very rare, especially at the local and regional levels.
Data gaps on the social and economic impacts of circularity, such as job creation, workforce distribution and the adoption of circular business models, are often unavailable.
Limited disaggregated data. Statistics on municipal and industrial waste are often limited to national aggregates, providing little insight into regional or local progress. Key gaps include the lack of detailed data on resource flows, urban metabolism and material inputs and outputs.
Inconsistent methodologies and different standards across statistical agencies exacerbate data gaps and make metrics incomparable.
Inadequate mechanisms to monitor the progress of circular economy strategies. The lack of robust monitoring frameworks hampers evidence-based decision-making and policy adjustments. Data collection efforts often remain ad hoc and project-based, failing to establish a systemic and continuous approach.
Insufficient platforms for data exchange and collaboration. The lack of dedicated platforms or information systems for resource exchange and circular economy data sharing is a significant gap. Such platforms are essential for fostering collaboration between businesses, industries, municipalities and other stakeholders, enabling synergies to be identified and circular practices to be scaled up.
Policy recommendations
Key actions
A Checklist for Action: Data and assessment
✓ Collect data and information on the circular economy.
✓ Generate open data sources.
✓ Make relevant data publicly accessible, understandable and updated regularly.
✓ Monitor and evaluate targets and goals of a circular strategy in the short, medium and long terms.
✓ Use the monitoring framework to identify how “circular” the city or the region is and what works, what does not work and what can be improved.
Source: OECD (2020[1]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Make it right
Conduct resource mapping to optimise material flows and promote sustainable practices across industries and regions. This data would serve as a baseline for long-term circular economy planning and local market development.
Conduct urban metabolism analyses to quantify local/regional resource flows, evaluate environmental impacts, and support policy development for circular economy practices. Such analyses could:
Incorporate methodologies like material flow analysis, lifecycle assessments, and input-output analyses.
Identify key resource flows (e.g., energy, biomass, and construction waste) and unsustainable consumption patterns using tools such as geographic information systems (GIS).
Engage stakeholders to validate findings and prioritise interventions that align with regional development goals.
Use results to inform policy on resource efficiency, secondary resource valorisation, and market development for circular products and services.
Set up a governance structure to strengthen co-ordination amongst actors in charge of data collection, to avoid overlapping efforts and bridge the data gaps.
Prioritise indicators that best reflect the main trends related to the transition towards a circular economy and that can better adjust to the strategic objectives of the city/region.
Leverage digital tools and technologies for real-time data monitoring and decision-making: smart technologies, artificial intelligence, IoT (Internet of Things), and data analytics can help monitor resource flows and environmental impacts. These digital tools can track material usage, waste generation, waste recirculation and energy consumption, offering a dynamic, up-to-date view of local resource flows.
Cities, regions and national governments conduct material flow analysis at two different levels: macro and meso levels. At the macro scale, metabolism or flow analysis serves to guide large-scale policymaking, assess trends in resource use, and pinpoint key sectors and value chains where interventions are most needed. By examining material, water, and energy flows, countries and regions can develop strategies that address systemic inefficiencies and set priorities for circularity. At the meso scale, which focuses on specific sectors and value chains, metabolism analysis is used to identify inefficiencies within industries, redesign value chains, and inform sectoral and industrial policies. This level of analysis helps to uncover the potential for circular strategies within particular sectors, such as construction, textiles, or food, and highlights the flows of critical resources like nutrients and materials throughout these chains. At the micro scale, flow and metabolism analysis targets individual products, materials, or processes, optimising their design and assessing life cycle impacts. This scale looks at the use of materials and energy in production, consumption, and disposal, offering detailed insights that guide product-level improvements and reduce resource footprints.
Examples at macro level (countries, regions and cities):
Mexico, as part of laying the groundwork for its forthcoming strategy, conducted a metabolic analysis of its economy in 2024. This analysis assessed the inputs, uses, and outputs of three key resource flows at the national level: (i) materials, including biomass, fossil fuels, metallic and non-metallic minerals, mixed products, and waste streams; (ii) water, covering water use by type and sector, such as industrial activities and electricity generation, as well as sources, including surface and groundwater; and (iii) energy, examining Mexico’s electricity mix, disaggregated by energy source.
The Basque Country, Spain; Flanders, Belgium; and the Northern Netherlands, Netherlands, carried out regional metabolism analyses in 2018, 2020, and 2018, respectively. The Basque Country focused exclusively on material flows (according to the European classification of materials: biomass, metal ores, non-metallic minerals, and fossil energy materials/carriers), while Flanders adopted a broader scope that included material, water, and energy flows, along with indicators such as the food material footprint, material productivity, constructed area, greenhouse gas emissions from the agricultural sector, water consumption in the agricultural sector, land use, household electronic and electrical equipment new to the market, and the share of industrial waste that gets a second life. In 2018, the Northern Netherlands Region carried out a material flow analysis to identify priority areas for the circular economy, revealing significant opportunities for circular economy activities across the provinces.
Paris (France) and Amsterdam (Netherlands), conducted urban metabolism analyses in 2017. To enhance data-driven decision-making for its Circular Economy Plan 2017–2020, Paris identified the built environment, food, water, and energy sectors as highly strategic for the circular economy at the local level. In Berlin (Germany), the waste management concept requires a bi-annual material flow analysis of over 35 waste streams, including final treatment and environmental impact. In Rotterdam (Netherlands) priority flows that significantly impact the city's metabolism have been identified. Other cities, such as Manresa (Spain), which received European funds under the URBAN WINS (HORIZON2020) project, are currently developing their urban metabolism analysis.
Examples at the meso level (sectors and value chains):
The Netherlands has analysed the textile and construction value chains as part of its national circular economy efforts.
Castile and León (Spain) is developing a metabolism analysis of the food, water, and nutrients value chains under the European project REFLOW.
Paris (France) mapped the food value chain, from production to transformation and distribution. The material flow analysis of Paris revealed that the majority of organic waste is not further used.
Vejle (Denmark) conducted a metabolism analysis of the plastics value chain.
London (UK), sets indicators and conducts analyses on material flow and carbon footprint for food and fashion sectors, as well as jobs and skills related to the circular economy.
Sources: OECD (2024[2]) OECD Survey: The Circular Economy in Cities and Regions in the European Union (EU); Government of Mexico (2024[43]), Bases para la Elaboración de un Diagnóstico de la Estrategia Nacional de Economía Circular en México, https://www.gob.mx/semarnat/prensa/semarnat-presenta-las-bases-del-diagnostico-para-transitar-a-una-economia-circular; Circular Flanders (2025[44]), Circular Economy Monitor Flanders, https://cemonitor.be/; European Commission (2019[45]), Urban metabolism accounts for building Waste management Innovative Networks and Strategies, https://cordis.europa.eu/project/id/690047; (Statistics Netherlands, 2023[46]), Centrino (2025[47]) Building a local, circular food system in Paris, https://centrinno.eu/blog/building-local-circular-food-system/; Reflow (2021[48]), Urban metabolism for circular cities, https://reflowproject.eu/reflow-academy/reflow-webinar-1-urban-metabolism-for-circular-cities/.
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