Circular economy has slipped quietly into the vocabulary of diplomats. What started as a technical discussion among product designers, waste managers and environmental lawyers is now part of how major powers think about security, alliances and hierarchy. If twentieth century geopolitics turned on access to oil, twenty first century power will hinge on who controls the material metabolism of clean economies, from copper and lithium to the flow of discarded batteries and data about what sits inside them.
The European Union has been the most explicit about this shift. Its 2020 Circular Economy Action Plan sits alongside the Green Deal as a central plank of long term competitiveness policy and covers the whole product life cycle, from design rules and repair rights to waste targets and trade measures. The more recent Critical Raw Materials Act and the gradual roll out of the Carbon Border Adjustment Mechanism make clear that circularity is no longer framed only as internal housekeeping but as an instrument of economic security and external influence.
Read through the dense legal directives and the sprawling academic debate on circular economy policies and you see two stories at once. One is the familiar tale of fragmented regulation, weak enforcement and hesitant industrial change. The other, less acknowledged in the IR literature, is that Europe is slowly building a new kind of structural power around standards, data and the governance of material loops. The question is whether it can make that power coherent, legitimate and geopolitically sustainable.
Circularity as a field of power
At the core of circular economy thinking sits a simple proposition. If economic growth continues on a linear path of take, make, dispose, global material use will overshoot ecological limits and destabilise societies. The International Resource Panel’s 2024 Global Resources Outlook estimates that without new policies, global resource use will almost double by 2060, while targeted efficiency and circularity measures could significantly reduce environmental pressures and still support development.
In IR terms, that is not just an environmental scenario but a map of future bargaining positions. States that can decouple prosperity from raw input growth will be more resilient to price shocks, supply disruptions and climate policy tightening. States that remain locked into linear export profiles will find their terms of trade and fiscal bases increasingly vulnerable. Circularity therefore becomes a field where three types of power intersect.
First, there is control over access to critical raw materials and secondary materials. The EU, United States and China are all racing to secure supplies of lithium, cobalt, rare earths and other inputs that underpin clean energy and defence technologies. The EU’s Critical Raw Materials Act sets explicit targets for domestic extraction, processing and recycling, and links them to strategic partnerships with external suppliers. Washington’s Inflation Reduction Act mobilises tax credits to push investment into domestic manufacturing and critical minerals processing and recycling. China has spent more than a decade building a legal and industrial framework around resource efficiency, recycling and national resource security through its Circular Economy Promotion Law and successive plans.
Second, there is the less visible but equally important power to define standards and information systems. Decisions about what counts as “recycled content”, how durability is measured, what a “digital product passport” must reveal or how embedded emissions are calculated in tradeable goods all shape which firms, countries and technologies thrive.
Third, there is narrative power. Circular economy can be framed as a win win strategy that couples prosperity with sustainability, or as a new form of green protectionism that locks in Northern technological and regulatory advantages while pushing adjustment costs onto the South. The way Europe and other players tell this story in international fora will matter for legitimacy and for the coalitions that form around competing models of circularity.
Europe’s circular agenda between housekeeping and statecraft
Riccardo Losa’s systematic review of EU circular economy policies, which you excerpted, offers a helpful mirror. From inside the legal and policy community, what stands out is fragmentation. Energy labels, eco design rules, waste directives, chemical regulations and extended producer responsibility schemes all touch parts of the circular agenda but rarely line up into a coherent push that would change business models rather than merely optimise waste management. Design rules are still too weak to drive genuine durability and disassembly. Extended producer responsibility is locked on recycling tonnages more than on product life extension. Policies on reducing absolute material use are, at best, embryonic.
From an IR perspective, this fragmentation is not a side note. It is the principal constraint on Europe’s ability to project circular power externally. The EU’s traditional strength as a “regulatory superpower” has always depended on two domestic conditions: a large, unified internal market and relatively consistent rules that firms can treat as a single benchmark. If circular economy rules remain a patchwork of overlapping, sometimes contradictory instruments, they will be less able to set de facto global standards.
There is also a timing problem. The Circular Economy Action Plan is being implemented at the same time as the Green Deal Industrial Plan, the Critical Raw Materials Act, CBAM and digital trade and data legislation. Each of these instruments has its own constituency and logic. Industrial policy pushes for rapid deployment of low carbon technologies, sometimes even if they are not optimised for circularity. Trade policy is primarily concerned with carbon leakage and competitiveness, not with material loops. Data rules are framed around privacy and digital sovereignty, with limited attention to the information needs of circular value chains. Without careful coordination, these agendas risk talking past each other.
Seen from Beijing or Washington, this mixture of ambition and incoherence is both an opportunity and a threat. It opens room to challenge EU measures like CBAM as disguised protectionism and to compete for influence over global standards. At the same time, if Europe manages to reconcile its internal rules, it could lock in global practices around circular design, repairability and secondary material markets in a way that structurally advantages European firms and technologies.
The global race to “close the loop”
The European debate sometimes treats circular economy as a niche where the EU is unchallenged. That view has become outdated. China has been experimenting with circular economy policies since the mid 2000s, and its 14th Five Year Plan for circular economy explicitly ties resource efficiency, recycling and remanufacturing to national resource security and industrial competitiveness. China’s approach is more state centric and infrastructure heavy, with clear quantitative targets for recycling rates and resource productivity. It also sits within a broader industrial strategy that links domestic capabilities, Belt and Road infrastructure and export markets for green technologies.
In the United States, the language of “circular economy” is less prominent, but the substance is converging. The Inflation Reduction Act and subsequent executive actions build powerful incentives for battery recycling, critical minerals processing and clean manufacturing. Recent debates about domestic mineral lists and budgets show that resource security is now a mainstream concern, even if the political coalition behind it is unstable.
What emerges is not a shared circular regime but competing models. Europe puts emphasis on rules, extended producer responsibility and consumer rights, and increasingly on border measures that link internal carbon pricing to external trade. China leans on state led industrial coordination, public investment and mandatory targets for key sectors. The United States has chosen a subsidy heavy path, with generous tax credits that crowd in private capital and rewire supply chains.
For IR scholars, this looks less like a technocratic convergence and more like the early stages of regime competition. All three major powers claim they are decoupling economic growth from environmental pressure, yet they are doing so through distinct political economies and alliance strategies. We have not fully theorised what it means for the international system when rival centres of power are all trying to “close the loop” on their own terms.
North South fractures in a circular world
The global distributional consequences of circular policies are often buried under technical language about waste hierarchies and product passports. Yet they are central to whether circularity will stabilise or destabilise the international order. The International Resource Panel and other bodies have begun to warn that the unequal distribution of material use and environmental harms between rich and poor countries is a major driver of instability.
High income economies like the EU hold out the promise that circular business models will create new jobs in repair, remanufacturing and recycling and reduce raw material dependence. For many lower income exporters that currently rely on primary commodity revenues, a successful circular transition in the North looks more ambiguous. If European industry deeply reduces demand growth for virgin copper, bauxite or fossil fuels through efficiency and reuse, export earnings in some countries could erode. If, at the same time, EU regulations tighten on waste exports and on environmental and social standards along supply chains, some traditional development paths could narrow without viable alternatives in place.
There is also the risk that circularity becomes a new layer of conditionality. CBAM already creates a template in which access to the EU market depends on the carbon performance of exported goods. Similar logics could extend to durability, reparability or recycled content. In principle, such measures can drive positive change. In practice, if they are designed unilaterally and enforced through the EU’s market power, they are likely to be read in the South as a new form of green protectionism.
The emerging discussion on “fair circular economy transitions” acknowledges this risk but has not yet translated into concrete governance arrangements. UNEP hosted a debate on how closing material loops in high income countries will disrupt long standing trade patterns and how to avoid reinforcing existing inequalities. The conversation touches on technology transfer, access to finance for circular infrastructure, cooperative standard setting and the distribution of intellectual property rights. For now, these ideas remain politically thin.
Europe’s own policy mix does little to allay Southern concerns. The Critical Raw Materials Act emphasises diversification of imports and reduction of dependency on single suppliers, especially China, and nods to sustainability and partnership. It does not yet spell out how value will be shared along new value chains or how producer countries will participate in standard setting and monitoring. Without that, we risk reproducing familiar extractive patterns under a circular label.
Domestic politics and the circular trilemma
Within Europe, circular economy policy faces its own political constraints. The premise that circularity will always be good for social equity and regional cohesion is not automatically true. Losa’s review shows how limited attention to social impacts has been in much of the EU’s policy design so far, despite the extensive rhetoric about green jobs and just transition.
There is a trilemma at work. Policymakers are trying to accelerate the ecological transition, strengthen strategic autonomy in critical supply chains and maintain social and territorial cohesion. Pushing hard on circular product standards and strict producer responsibilities can support the first two goals but may raise costs for households and small firms if redistributive measures do not keep pace. Aggressive industrial support for new clean technologies, from batteries to heat pumps, can boost competitiveness and security, yet if those technologies are not designed for durability and recyclability from the outset, they may lock in future waste and resource problems that are expensive to fix.
The political backlash against perceived “green overreach” in several member states has already begun to shape climate and energy policies. It will inevitably spill over into circular policies as requirements on repair, data provision and waste treatment tighten. At the same time, the business lobby is divided. Established manufacturers often resist binding durability or reparability rules that threaten existing product cycles, whereas emerging circular entrepreneurs want far more ambitious standards and fiscal incentives.
In that sense, Europe’s ability to turn circular economy into an external power resource is tied to its capacity to manage an internal bargaining game among firms, consumers, member states and EU institutions. If that game yields only incremental and inconsistent rules, Europe’s claim to leadership will ring hollow. If it produces a robust, socially legitimate framework that actually reduces material throughput while protecting vulnerable groups, the EU’s regulatory model will become much more attractive to partners.
What would a genuinely geopolitical circular strategy look like?
From the vantage point of international relations, the EU needs to think far more explicitly about circular economy as statecraft. That does not mean militarising recycling targets. It means treating the circular agenda as a set of choices about alliances, hierarchies and norms. Several shifts would follow.
First, Europe would stop treating circular policy as an inward looking corrective to its own environmental footprint and instead articulate it as a cornerstone of a new development offer. That offer would accept that some resource exporters will face shrinking markets and would make debt relief, concessional finance and technology transfer for circular infrastructure integral to partnership agreements. It would move beyond generic talk of capacity building and commit to building repair, remanufacturing and recycling industries in partner countries, not only within the EU.
Second, the EU would treat standard setting and data governance as strategic arenas. The proposed digital product passport could become a genuinely global public good, an interoperable system that allows different jurisdictions to plug in their own social and environmental priorities. That will not happen if European authorities simply impose one template and demand compliance. It would require early joint experimentation with African, Asian and Latin American partners and with multilateral bodies such as UNEP and the WTO. It would also require more clarity and discipline about what information is genuinely needed for circular practices, to avoid building an information architecture that mostly serves the compliance industry.
Third, the EU would use its trade and industrial instruments more coherently. CBAM is currently framed as a climate measure designed to prevent carbon leakage and level the playing field between domestic producers and external competitors.There is no reason why similar attention could not be given to embodied materials and circular performance in future trade instruments, but this should be done in dialogue with partners rather than unilaterally. Trade agreements that support critical raw material partnerships already hint at such linkages. If designed in a narrow security frame, they risk becoming simple diversification exercises away from China. If designed in a broader circular frame, they could embed joint commitments on recycling, data transparency and social safeguards.
Fourth, and perhaps most important for IR theorists, Europe would start to take seriously the idea that circular economy is not only about efficiency but also about the distribution of power over time. Circular infrastructures and standards are sticky. Once a battery chemistry, a repair standard or a product passport protocol is widely adopted, it shapes global possibilities for decades. Early movers in designing those systems accumulate long term advantages. That is precisely why the United States and China are investing heavily in their own industrial and regulatory ecosystems for clean and circular technologies, even if they rarely use the term circular economy.
For international relations as a discipline, circular economy is a useful lens for rethinking several familiar debates. It cuts across the old divide between trade and environment, since circular policies directly reshape trade flows and value chains. It challenges static conceptions of resource power that assume exporters always hold the upper hand, by showing how demand side measures and circular business models can erode that leverage. It deepens discussions of hierarchy by highlighting how standard setting and data infrastructures can embed asymmetries without the visible drama of military bases or mutual defence treaties.
It also forces us to revisit questions of justice. Circular economy narratives often promise that decoupling and efficiency will allow us to square growth with planetary boundaries. Global distributional analyses suggest that without explicit attention to who bears the costs of transition, circular policies could amplify existing inequalities in both material use and environmental harm.
Finally, circular economy politics exposes the limits of purely national or even regional approaches. By definition, material loops do not respect borders. Scrap flows, secondary materials markets and data streams about products are transnational. Efforts by the EU, United States or China to “onshore” critical parts of those loops will coexist with continued cross border exchanges. That hybrid reality complicates old models of interdependence that were built on primary commodities and finished goods. It also creates new sites of contestation, for example around the classification of waste versus resource, or the jurisdiction over product data stored on digital platforms.
Conclusion
Circular economy began life as a technical concept in industrial ecology and environmental economics. It has now matured into a contested project of world making. Europe sits at the centre of that project, not only because its regulatory machinery is further advanced, but because it is trying to reconcile three ambitions at once: ecological transition, strategic autonomy and social cohesion.
The systematic policy review you shared is a reminder of how far EU practice still falls short of its rhetoric. Design rules are often timid, reduction policies underdeveloped, data infrastructures incomplete and social dimensions under explored. Yet if we zoom out to the international level, it is clear that these internal struggles are also the front line of a wider geopolitical reordering. How Europe chooses to regulate repairability, to structure extended producer responsibility or to define data requirements for digital product passports will have ripple effects in factories and ministries from Lagos to La Paz.
For European policymakers, the choice is whether to treat circular economy as a narrow environmental file, largely delegated to technocrats, or as a core element of foreign and security policy. For scholars of international relations, the challenge is to move circular economy out of the footnotes and into our main theories of power, order and justice. The loops we are trying to close are material and political at the same time. The actors who learn to govern them with an eye to both ecology and equity will shape not only their own prosperity, but the structure of the international system that emerges from the long green transition.
