Industry groups call on EU to use Internal Market legal basis for new Circular Economy Act

The undersigned industry associations have expressed support for the European Union’s ambitions on circularity and have urged that the forthcoming New Circular Economy Act (CEA) be established on an internal market legal basis under Article 114 TFEU. They argue that this approach is required to support the development of a genuine circular economy and a European market for secondary raw materials.

According to the associations, achieving the EU’s circular economy objectives requires harmonised rules that enable a significant improvement in waste management performance across all Member States. They point out that current waste management systems remain fragmented, with large differences in national regulatory frameworks and performance. Nearly half of EU countries continue to landfill more than 30% of their municipal waste, with four Member States reporting landfill rates between 60% and 80%. In addition, only nine Member States are expected to meet the 2025 recycling target.

The associations state that the recent targeted revision of the Waste Framework Directive (WFD) did not resolve long-standing structural weaknesses in European waste management systems. They describe the New CEA as an opportunity to address these shortcomings through common rules applicable to all Member States, rather than only to those with higher performance levels.

They further note that the absence of harmonised waste management rules is limiting the EU’s ability to achieve collective circular economy goals and is also preventing the creation of a Single Market for secondary raw materials. As recognised by the European Commission in the Single Market Horizontal Strategy, divergent waste regulations are among the most frequently cited barriers within the Single Market, referred to as the ‘Terrible Ten’. The associations state that these barriers have environmental, economic and geopolitical consequences, including increased external dependencies.

The associations maintain that the Commission should preserve the ambition of the New CEA and resist proposals that would reduce its scope in the name of national flexibility. They argue that the objective should be to enable lower-performing Member States to close the gap with higher-performing ones and to ensure that all Member States contribute to the circular economy targets.

They also oppose the use of Article 192 TFEU, which relates to environmental protection, as the legal basis for the New CEA. In their view, this would worsen existing fragmentation, create uncertainty over Member State responsibilities and weaken efforts to support the EU’s transition towards a circular and climate-neutral economy.

With what they describe as broad stakeholder backing, the associations call on the European Commission and co-legislators to retain the internal market legal basis in full when drafting and adopting the New Circular Economy Act, stating that it is the most appropriate foundation for meeting the objectives of the future legislation.