While the COVID-19 crisis has put many economic activities on hold, notably tourism, a pillar of Granada’s economy, it has also created a momentum towards more sustainable production and consumption patterns, in line with carbon neutrality goals. The pandemic also magnified the need for new urban paradigms while increasing awareness on the potential of the circular economy to transition to low carbon cities and regions, whilst also stimulating economic growth, creating jobs, and improving people’s lives and social well-being. This report summarises the findings of a two-year policy dialogue with the city of Granada in Spain, and provides recommendations and a vision to transition to a circular economy. It draws on Granada’s own experience with the transformation of a wastewater treatment plant into a bio factory in 2015, which contributed to increased water reuse and the production of new material from waste. The report argues that the city of Granada can play a role as a promoter, facilitator and enabler of the circular economy. This will require a collective and coordinated approach across all stakeholders and levels of government.