The European Union is preparing a new Circular Economy Regulation aimed at promoting the use of secondary raw materials. The regulation draws on point 9 of the Mario Draghi report — “Improve the circularity of resources!” — and focuses on three major priorities: extending the service life of materials, reducing single-market barriers, and stimulating demand for secondary resources.
The roadmap for the Circular Economy Regulation is currently (as of 4 September 2025) open for public consultation, and I recommend engaging with the questionnaire. Not in order to influence the Commission’s position, but to understand the implications for the construction sector. This is critically important for grasping what circular economy principles actually mean in practice for construction:
- price-based material selection will be replaced by selection based on demonstrated environmental sustainability;
- energy efficiency will give way to the verified application of circular economy principles;
- end-of-life deconstruction must be considered at the design stage.
The Circular Economy Regulation is expected to be published in the second half of 2026. However, it is important to note that the Construction Products Regulation (CPR) has already established all the necessary requirements for its implementation. The Circular Economy Regulation will address only the barriers that currently prevent those requirements from being met. Anyone who has read the regulation’s questionnaire will understand the magnitude and the fundamental nature of the shift this represents for Estonian thinking. Three prevailing assumptions — that circular economy is merely a new name for waste management, that the key to the transition lies with local municipalities, and that all problems will be solved by low-carbon construction — are being consigned to the dustbin of history.
What is the Circular Economy Regulation actually saying?
In the current situation, virgin resources are cheaper than secondary materials. Equally, landfilling waste is cheaper than recycling it. Such price signals do not support the sustainability of resource-intensive sectors, nor the EU’s strategic autonomy with regard to critical raw materials (CRM). The objective of the Circular Economy Regulation is to reverse this logic — to make the primary resource user pay for environmental harm, and to make secondary raw materials economically attractive to businesses.
Two pillars are planned to bring about these changes:
- Establishing a market for e-waste and secondary critical raw materials
- Collection and processing requirements for waste electrical and electronic equipment (WEEE) will be expanded. The only open question is which product groups will be included (solar panels, wind turbines, servers, cables, large industrial equipment, etc.).
- Take-back systems and export controls will be introduced to prevent valuable resources (including rare earth elements) from leaving the EU in unprocessed form.
- Reducing single-market barriers
- A shared understanding of when waste ceases to be waste will be established, creating the basis for cross-border trade in secondary raw materials.
- Harmonised by-product criteria for life cycle assessment (LCA) will be introduced, so that by-products can officially be used as inputs in new products.
- Extended producer responsibility (EPR) schemes will be broadened and simplified, so that circularity is considered already at the product development stage.
- Public procurement will be required to give preference to circular products, services, and solutions.
The aim of the Circular Economy Regulation is to promote the use of secondary raw materials
New measures envisage:
- minimum requirements for secondary raw material content in products;
- preferences in public procurement for the use of circular materials;
- harmonised standards and commodity codes for metals, aluminium, and secondary raw materials containing CRMs;
- a possible minimum bio-based content target.
What does this mean for construction sector businesses?
Companies must account for the following:
- preparation for pre-demolition and pre-renovation audits begins at the design stage, not at the sorting of construction waste;
- processing capacity for construction waste and a market for secondary resources will emerge (note: cleaning and reusing doors and windows does not constitute circular resource use);
- public procurement will begin to favour circular solutions, including the requirement to demonstrate the proportion of secondary resources used in construction products;
- those who can rapidly integrate secondary resources into their production processes will gain a competitive advantage.
Conclusion
The Circular Economy Regulation is not merely regulatory pressure. It creates a new market for secondary resources and reduces Europe’s dependence on imported materials. The winners will be businesses that adapt in time, invest in applying circular economy principles, and capitalise on available subsidies and tax incentives.
