Circular Economy Act: EU reshapes economy to increase competition and strategic autonomy
Expected to be enacted by the end of 2026, the European Commission’s Circular Economy Act will be the next step following the Circular Economy Action Plan (CEAP) 2020, with the aim of reforming the current legal framework to move the EU closer to a green, circular and internationally competitive economy.
According to EU Environment Commissioner Jessika Roswall, the law is not about creating new regulations but about reframing existing policies to ensure economic efficiency in a volatile geopolitical context. “Circularity indicators are still too low. It is time for the EU to take more decisive action to use waste as a strategic resource,” she stressed.
Electronic waste – forgotten treasure
A central focus of the bill will be to amend the Waste Electrical and Electronic Equipment (WEEE) Directive, which has seen a tenfold increase in the amount of e-waste processed over the past two decades. However, many member states have yet to meet their targets, and large amounts of waste are still being exported illegally.
The new law will boost the recovery of critical raw materials (CRMs) for materials such as rare earths, cobalt and magnesium – essential for the electronics and renewable energy industries. The EU’s target is to achieve a 25% recycling rate for these materials, up from less than 1% currently.
Towards a common market for waste
Another major reform is to promote the development of a single market for waste within the bloc, reducing the fragmentation caused by individual regulations in each country, especially related to Extended Producer Responsibility (EPR). This will not only reduce compliance costs but also create a stable flow of secondary materials for the processing industry.
The new law will also extend its scope to high-waste sectors such as construction, textiles and automotive, and update directives related to wastewater treatment to encourage reuse in irrigation and industry.
Changing mindset: from “waste” to “renewable asset”
Along with promoting recycling, the EU also emphasizes extending product life cycles. The new Ecodesign Regulation (ESPR), which comes into effect in 2024, requires products to be easy to disassemble, repair and recycle. In parallel, the EU promotes the “right to repair”, encouraging consumers to repair rather than buy new.
In addition, the Directive on “Consumer Empowerment in the Green Transition” will ensure that consumers are provided with transparent information on product durability and repairability – a key condition for changing consumer behaviour.
What do Vietnamese businesses need to prepare?
With the orientation of building a closed internal market and prioritizing reusable materials, the EU is gradually tightening regulations on imported goods. Vietnamese enterprises exporting to Europe - especially in the fields of electricity - electronics, textiles, and household appliances - should proactively update requirements on eco-design, recycling rates, labeling on durability and repairability, as well as checking obligations related to Extended Producer Responsibility (EPR). Early preparation will be a great competitive advantage when the new regulations come into effect after 2026.
Source: https://moit.gov.vn/tin-tuc/thi-truong-nuoc-ngoai/tong-hop-tinh-hinh-kinh-te-cong-nghiep-va-thuong-mai-thuy-dien.html
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