The European Commission is preparing to publish its long-awaited New Circular Economy Act (CEA), following the release of a first set of pilot actions aimed at accelerating Europe’s transition to a more circular economy.
The ambition is clear: circularity is no longer framed solely as an environmental objective, but increasingly as a pillar of Europe’s economic security, resilience and competitiveness.
If the CEA is to succeed, however, it must move beyond aspirations and targets and focus on what ultimately determines success: whether European companies can realistically invest, operate and compete in a circular economy. Getting the fundamentals right will be decisive.
Circularity starts with effective waste management
A circular economy can only be achieved if Europe has efficient, transparent, and high-performing waste management systems. Without effective collection, sorting and recycling across all Member States, even the most ambitious circularity targets risk remaining theoretical.
This is particularly true for packaging. Natural mineral and spring water producers, for example, rely on either reusable glass or recyclable PET, the most collected and recycled polymer in Europe, and have invested heavily in eco-design and recyclability. For such producers, the CEA represents an opportunity to remove remaining bottlenecks and finally close the loop on their packaging.
However, EU-mandated recycled content targets alone will not deliver circularity. Like building a house, policies targeting circularity must start with solid foundations before adding higher-level requirements.
No collection, no circularity
To stay competitive while embracing circularity, companies need access to a stable supply of affordable, high-quality recycled materials suitable for incorporation into new products. This is where Extended Producer Responsibility (EPR) schemes play a central role.
Under EPR systems, producers finance the collection, sorting and recycling of the packaging they place on the market. Deposit Return Schemes (DRS) are a specific form of EPR.
The beverage sector has been at the forefront of DRS deployment, and the results are clear: DRS deliver high separate collection rates, high-quality recycled material suitable for being incorporated back into food or beverage packaging and reduce dependence on volatile global markets. These systems allow beverage producers to meet, and often exceed, recycled content requirements.
However, the performance of waste collection systems depends heavily on governance. Transparent, not-for-profit structures run by obliged producers have proven to be critical success factors. Equally important is ensuring that producers retain fair access to the recycled material generated from the packaging of which they finance the recovery.
Where poorly performing EPR systems persist, the consequences are predictable: limited availability of recycled material, higher costs, and reduced capacity for industry to deliver circular outcomes.
Accountability in producer responsibility
A worrying trend has emerged in some Member States, where EPR systems are being transformed into state-run bodies. This creates a real risk that fees paid by producers for the management of their packaging are diverted to unrelated public spending rather than reinvested in collection, recycling infrastructure and consumer education.
Such practices undermine competitiveness, reduce transparency and generate uncertainty regarding access to recycled materials. A well-functioning circular economy requires EPR systems that are efficient, accountable and financially ring-fenced, not treated as fiscal instruments.
Reducing dependence on imports
One of the CEA’s strategic promises is to reduce Europe’s dependence on imported raw materials. This should apply equally to secondary raw materials.
Today, some European producers have no choice but to rely on imported recyclates, including, to some degree, food-grade recycled PET. This is not a sign of success but of system failure. Recycled content targets have increased demand, while packaging collection rates have remained largely stagnant in parts of Europe, driving up prices and forcing companies to source material abroad. High-quality recycled PET suitable for beverage bottles is now significantly more expensive than virgin material.
The solution to support EU recycling is to scale up domestic collection, sorting and recycling capacity. Imports can complement local supply when and where needed but should not replace it. The CEA offers an opportunity to ensure that all sectors invest in eco-design, that Member States deploy effective collection systems without delay, and that producers have access to the recycled materials generated from their own packaging.
At the same time, establishing a level playing field is essential. European recyclers must not be undercut by unfair competition from outside the EU and this is where quality certification should play a role. Beyond this requirement, producers’ choice as to sources of supply should be preserved, and trade restrictions avoided doing that so that the industry can meet its recycled content obligations.
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Enabling SMEs in a complex regulatory landscape
A key test for the CEA will be whether it enables Europe’s SMEs to thrive. SMEs are the backbone of the EU economy and a defining feature of the food and beverage sector. The natural mineral and spring water industry illustrates this reality well: EU legislation requires bottling at source, anchoring production to local territories and preventing relocation or consolidation. As a result, more than 900 bottling sites operate across the EU, mostly SMEs located in rural areas where they support employment and essential services.
These companies also tend to collaborate with local authorities, residents and NGOs to protect water sources and surrounding ecosystems. Yet their capacity to adapt is constrained. Regulatory complexity, frequent regulatory changes and the absence of long-term visibility weigh far more heavily on SMEs than on large multinationals.
This matters because industrial investments are planned over decades. A bottling line, for instance, is expected to operate for 15 years or even more. Without legal predictability and economic enablers, companies will hesitate to invest, undermining both competitiveness and circular ambitions.
Informing consumers without creating confusion
Consumers play an important role in the circular economy, both through purchasing decisions and waste disposal behaviour. To do so effectively, they need clear, credible and simple information.
Meanwhile, producers investing in recyclability, recycled content and eco-design should be able to communicate their efforts transparently. New mandated logos on packaging risk confusing consumers and discouraging legitimate communication. This is particularly problematic for pioneering sectors and producers.
The EU should aim for an information framework that empowers consumers, avoids unnecessary complexity and rewards genuine environmental performance.
A chance for Europe to lead
If Europe wants to lead globally on circularity, it must treat it as an industrial strategy, not merely an environmental objective. Circularity requires long-term investments in infrastructure, innovation and value-chain cooperation. Those investments will only materialise in a predictable, competitive and enabling regulatory environment.
If the Circular Economy Act gets the fundamentals right - efficient waste management, effective producer responsibility, regulatory stability and access to affordable secondary raw materials - Europe can turn circular ambition into industrial strength and position itself as a global leader in the market for recycled materials.
Natural Mineral Waters Europe (NMWE)
