The European Green Deal and Circular Economy

Last updated: 18 January 2026

What is the European Green Deal?

The European Green Deal (“Green Deal”), launched in 2019, is the European Union’s flagship decarbonization strategy. The Green Deal sets the target of a carbon-neutral Europe by 2050 (i.e., net zero). To help achieve this aim, EU Member States have pledged to reduce emissions by at least 55% by 2030, compared to 1990 levels.

The measures and regulations introduced as part of the Green Deal strategy seek to incorporate climate and environmental objectives into all sectors of the economy, so the impact will be felt by all businesses operating in the EU. A key building block of the Green Deal, particularly relevant to product manufacturers and resellers, is the Circular Economy Action Plan.

What is the Circular Economy Action Plan?

The latest Circular Economy Action Plan (CEAP) was adopted by the European Commission in March 2020, following the adoption of its first CEAP in December 2015. The CEAP identifies 35 legislative and nonlegislative actions to improve the circularity of products in the EU market. It targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and that the resources used are kept in circulation within the EU economy for as long as possible.

As of January 2026, key legislative developments resulting from the CEAP include the following:

• The Sustainable Batteries Regulation
  
  
• The Packaging and Packaging Waste Regulation
  
  
• The Ecodesign for Sustainable Products Regulation
  
  
• The EU’s proposed greenwashing regime under the proposed Green Claims Directive, and the Empowering Consumers in the Green Transition Directive
  
  
• The Directive on common rules promoting the repair of goods
  
  
• The Industrial and Livestock Rearing Emissions Directive (IED 2.0)
  
  
• The new Waste Shipment Regulation
  
  
• The Regulation on preventing plastic pellet losses to reduce microplastic pollution
  
  
• The Proposal for a Regulation on circularity requirements for vehicle design and on management of end-of-life vehicles

The CEAP also provides for nonlegislative actions, such as the adoption of a new Strategy for Sustainable and Circular Textiles.

A major step for the EU’s transition toward a more circular economic model under the Green Deal will be the forthcoming Circular Economy Act. The European Commission is expected to publish a legislative proposal for this act in the fourth quarter of 2026 (see below for details).

Directive on common rules promoting repair of goods

The Directive on common rules promoting the repair of goods (“Repair Directive”) entered into force on 30 July 2024, and will apply in EU Member States from 31 July 2026 at the latest. It aims to prevent the premature disposal of repairable goods by consumers through measures that enhance incentives for repair, including the following:

• An obligation on manufacturers of certain products (subject to reparability requirements) to repair those products within a reasonable time and for a reasonable price
  
  
• The establishment of a new online platform called the European Repair Platform for consumers to locate repairers
  
  
• The extension of the legal guarantee after repair in the Sale of goods Directive by an additional year
  
  
• National measures to promote repairs, to vary by member state, but to include at least one financial (e.g., a repair voucher) or nonfinancial (e.g., training or information campaign) measure
  
  
• The establishment of a standardized European Repair Information Form for consumers to compare different repair offers

The Repair Directive is an important part of delivering the European Commission’s priority of green transition in the European Green Deal, and it complements the Ecodesign for Sustainable Products Regulation in trying to extend the lifetime of consumer products.

Upcoming Circular Economy Act

On 1 August 2025, the European Commission launched a public consultation and a call for evidence as part of its preparation of the Circular Economy Act. This was done to support the impact assessment process by gathering insights from stakeholders and the public to better understand challenges and opportunities for expanding circular economy practices. The Circular Economy Act is intended to accelerate the EU’s transition to a more circular economic model, strengthening economic security, resilience, competitiveness and decarbonization. The act aims to create a single market for secondary raw materials, increase the availability of high‑quality recycled materials and boost demand for such materials within the EU. The European Commission is expected to publish a legislative proposal for this act in the fourth quarter of 2026.

Why should your business care?

Sustainability requirements will apply to virtually all physical goods placed on the market in the EU and will therefore impact nearly all sectors. Circular economy measures will have a transformative effect on the EU market, significantly curtailing the use of the “take, make, break and throw away” model across almost all product categories. Businesses should begin considering how they can adapt and modify their products to ensure they can meet these stringent new requirements.

What comes next?

The EU will continue to monitor and implement the range of actions proposed under the CEAP. Product companies will need to track the individual legislative developments applicable to their business so that they can ensure compliance as and when they enter into force.