New tools bring circular economy strategies into climate policymaking

Over the last four years, CIRCOMOD has built integrated models that quantify how circular economy strategies – demand reduction, material efficiency, product lifetime extension, reuse, high-quality recycling – can cut greenhouse gas emissions and resource use at scale. Systemiq helped shape the analytical thinking and turn that modelling into tools and evidence policymakers and industry can use.

Circular economy is moving up the policy agenda, but the evidence behind it has often been fragmented and difficult to use. That matters because producing materials such as steel, cement and aluminium accounts for roughly a quarter of global greenhouse gas emissions. And unlike power generation, these emissions cannot be reduced simply by switching to cleaner energy. 

The integrated assessment models that inform global climate policy are strong on energy transitions but have never adequately captured material demand or circularity, so the climate mitigation potential of circular strategies gets underestimated, or left out entirely. That makes it harder for policymakers and industry to assess system-wide effects, including trade-offs, synergies and rebound effects.  

CIRCOMOD, a Horizon Europe project led by Utrecht University from 2022 to 2026, set out to close that gap. The project built a consistent, multi-model framework that connects material stocks and flows with energy systems, service demand and macroeconomic outcomes. 

The result is the first comparable, model-based assessment of what circular strategies can achieve for climate mitigation – covering steel, cement, aluminium, copper and plastics across vehicles, buildings, infrastructure and machinery, at EU, Member State and global level. 

CIRCOMOD was a 12-partner consortium of leading European universities and research institutes, coordinated by Utrecht University. Systemiq’s role was to support the early structuring of the analytical framework for the key deliverables and help make the science usable: we worked with the research partners to translate modelling outputs into evidence and recommendations that policymakers and industry can act on, and supported the consortium’s communications and stakeholder engagement throughout.

CIRCOMOD modelled three levers of circular action: narrowing strategies, which reduce demand for materials and services at source; slowing strategies, which extend the useful life of products and materials already in circulation; and closing strategies, which keep materials in use at end of life through recycling and recovery. A few clear findings stand out: 

• Circular strategies can make a meaningful dent in industrial emissions. CIRCOMOD found they could deliver up to 21% of cumulative global industrial GHG mitigation potential before any additional climate policy is applied. Most of that impact – around 93% – comes from “narrowing” measures that reduce material demand at the source. 

• Narrowing stands out as the biggest opportunity. Reducing the need for materials in the first place is the fastest and most effective way to cut emissions, with projected material demand falling by 30–50% in buildings and 39–74% in vehicles in the EU by 2050. 

• Rebound effects matter. Around half of the direct savings from circular economy policies can be offset when households spend the money they save elsewhere. That effect falls sharply when circular policies are paired with carbon pricing. 

• Some circular strategies need careful timing. Extending the life of high-carbon assets, such as combustion-engine vehicles, can slow the shift to cleaner alternatives and end up increasing emissions rather than reducing them. 

• The bigger picture is clear: circular economy and climate policy solve different parts of the same emissions challenge. They have the greatest impact when designed to work together.

• New CIRCOMOD policy brief showcases open tools for advancing circular economy policy – Circomod. Introduction to three public tools: an open database of harmonised results, an interactive dashboard for comparing circular economy scenarios, and Circular Economy Profiles that turn the data into clear, decision-ready insight by material, sector and region. 
• Policy briefs on buildings and transport and on the economic case for circularity will be published in due course. 
• Watch: EU Circular Talks webinar – Machinery Manufacturing in the Circular Economy  
• Access all CIRCOMOD deliverables, including detailed reports on the modelling results, at https://circomod.eu/circomod-deliverables/  
• Summary and recording of “Modelling to Policy: Circular Economy Pathways Towards Net-Zero,” CIRCOMOD’s joint final event with sister projects CircEUlar and CO2NSTRUCT in Brussels

Final project results will feed into the next iteration of reports from the Intergovernmental Panel on Climate Change. The database and dashboard of the project stay open and live for stakeholders to develop bespoke scenarios for their needs. Systemiq will keep drawing on CIRCOMOD’s evidence as we continue our work on materials and circular economy policy. 

CIRCOMOD is an EU-funded research initiative (2022 – 2026) that developed integrated models to quantify how circular economy strategies – including material efficiency, product lifetime extension, reuse, and high-quality recycling – can reduce greenhouse gas emissions and resource use at scale. By combining detailed data on material flows, real-world technologies, and economic dynamics, the project delivered a system-wide assessment of circular strategies across sectors and regions.  

Consortium partners: Utrecht University (coordinator), Norwegian University of Science and Technology (NTNU), E3-Modelling, CMCC – Euro-Mediterranean Center on Climate Change, Leiden University, University of Freiburg, Tilburg University, Systemiq, Pforzheim University’s Institute for Industrial Ecology (INEC), NOVA University Lisbon, PBL Netherlands Environmental Assessment Agency, Power Algae.