The circular revolution: opportunities and investment needs in the European Union

The EU will need to invest €230 billion by 2040 in new physical assets and infrastructure to enable the transition to a circular economy.

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According to a report published by the Norwegian investment firm Summa Equity the European Union will need to invest €230 billion between now and 2040 in new physical assets and infrastructure to enable the transition to a circular economy.

Investment needs and opportunities in the circular economy

The report, entitled "Investing in a circular and waste-free Europe," highlights areas where the European Union is underperforming, such as the production and disposal of materials, which generate 850 Mt CO2e per year, equivalent to 22% of the EU's total greenhouse gas emissions.

One of the opportunities identified is the need for a new asset base for the circular economy, including equipment, processing plants and supporting infrastructure. The cumulative investment needed in physical assets is estimated to amount to €230 billion between now and 2040. Moreover, these investments could generate attractive returns, as the valuation of circular markets could exceed €1.5 billion by 2040.

Projected impact of the circular economy in Europe

The report projects a significant transformation in the European markets for materials, waste and physical products by 2030. It estimates that circular business models could generate significant revenues, representing 15% of the physical consumer goods market by 2030, and reaching €450 billion by 2040.

In addition, it is projected that greenhouse gas emissions could be reduced by 650 Mt CO2e by 2040, equivalent to 55% of total material system emissions in a business-as-usual scenario.

The projected revenues generated by circular models, as well as the significant reduction of greenhouse gas emissions, show the potential positive impact that this transition to the circular economy could have in Europe.

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