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The State of the Global Circular Economy Industry


The circular economy is a system where products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, recycling, and composting. Companies engaged in the circular economy industry aim to create an economy which has sustainability as its most important pillar, with a focus on conserving the environment and finite resources. There are 4 key principles that any sustainable circular economy industry firm should apply to its operations:

  • Design for circular: Design products with a focus on circularity. This includes focusing on quality and durability.

  • Keep products and materials in use: Circular products are made with raw materials that can be used repeatedly, and don’t have a short lifespan.

  • Regenerate natural systems: Products ought to reduce negative environmental impacts while preserving natural systems.

  • Foster collaboration: The company should work closely with all stakeholders and participants in its value chain to ensure sustainability across all levels in the value chain.

Macro Overview

Global Market Insights

The global circular economy industry market was valued at around $553 Billion and is estimated to grow at a CAGR of 13.19% during the forecast period 2024-2030.  Based on the industry, Circular economy industry is segmented mainly into textile, construction, automotive, logistics, furniture, and oil & gas. Among all these industries, Construction sector acquired the largest share in the global circular economy industry market in recent years. Circular economy industry market expands across countries like North America, South America, Europe, The Middle East & Africa, and APAC regions. Europe is expected to dominate the Circular economy industry Market, for the forecasted period 2024-30, given that it is a mature market and the regulatory environment in Europe has created conditions that put sustainability at the forefront of all innovation.

Indian Market Insights

Due to rapid urbanization, India ranks among the top 10 countries globally in terms of municipal solid waste generation. According to the Confederation of Indian Industry (CII) in its 'National Circular economy industry Framework,' India's circular economy industry market is projected to reach a value of $2 trillion by 2050. Currently, it is estimated that waste management in India represents a potential $15 billion industry. Out of all the waste generated in India, 25% consists of dry waste components that are recyclable. Additionally, as of 2021, India's formal recycling rate is estimated to be between 10%-20%, with a formal recovery rate ranging from 80%-95%. Consequently, there exists substantial potential to recycle this solid waste, creating a significant market opportunity for companies dedicated to achieving circular economy industry objectives.

Future trends in Circular economy industry

The circular economy industry, characterized by the regenerative use of resources and minimizing waste, continues to gain traction as a sustainable alternative to the traditional linear economy. Several future trends are expected to shape the evolution of the circular economy industry, driving innovation, collaboration, and widespread adoption. Here are some key trends to watch:

  • Advanced recycling technologies: Designing products and systems with circularity in mind is essential for achieving a sustainable circular economy industry. Future trends in circular design focus on eco-friendly materials, modular and repairable products, and innovative manufacturing techniques such as 3D printing. Design thinking principles prioritize longevity, recyclability, and ease of disassembly to minimize waste and maximize value retention.

  • Product as a service (PaaS) model: PaaS models, such as leasing, sharing, and subscription services, are gaining popularity across various industries. By shifting from ownership to access-based consumption, PaaS models promote product longevity, resource efficiency, and waste reduction. Examples include ride-sharing platforms, clothing rental services, and equipment leasing programs.

  • A shift in consumer behavior: Educating consumers about the benefits of the circular economy industry and promoting sustainable consumption habits are essential for widespread adoption. Future trends focus on raising awareness through marketing campaigns, product labeling, and consumer engagement initiatives. Behavioral nudges, rewards programs, and peer-to-peer networks encourage consumers to make environmentally conscious choices and support circular products and services.

  • Waste to waste innovations: Collaboration among stakeholders, including businesses, governments, NGOs, and consumers, is crucial for transitioning to a circular economy industry. Future trends emphasize the development of circular supply chains, where materials and resources are sourced, used, and recycled within interconnected networks. Collaborative platforms and partnerships facilitate resource sharing, waste valorization, and closed-loop systems across industries.

  • Collaboration among businesses and government: Governments and regulatory bodies are increasingly implementing EPR policies to hold producers accountable for the entire lifecycle of their products. EPR encourages manufacturers to design products for reuse, recycling, or safe disposal, thereby incentivizing circular practices and reducing environmental impact. Future trends in EPR may include stricter regulations, eco-labeling schemes, and financial incentives for sustainable product design.

  • Rise in shifting towards circular economy industry from linear: Circular business models offer opportunities for companies to create value from waste and by-products. Future trends include innovative revenue streams such as remanufacturing, refurbishment, and upcycling, as well as the monetization of secondary raw materials and circular services. Companies are increasingly adopting circular economy industry principles to drive cost savings, enhance brand reputation, and capture new market opportunities.

  • Digitalization and data analytics: Digital technologies, including the Internet of Things (IoT), artificial intelligence (AI), and blockchain, are poised to revolutionize the circular economy industry. These technologies enable real-time tracking, monitoring, and optimization of resources and materials throughout their lifecycle, facilitating better decision-making and resource management.

Embracing these trends presents opportunities for businesses, governments, and society to create a more sustainable and resilient economy that respects planetary boundaries and fosters prosperity for all.

Emerging Business Models in the Circular economy Industry

  1. Circular Supply Chain: Companies dealing with this model will generally introduce fully renewable, recyclable, or biodegradable materials which can be used across lifecycles. Examples include electric vehicle OEMs like Ather Energy, Ola Electric that build EVs by replacing fossil fuel-based vehicles.

  2. Recovery and Recycling: This model follows the principle of reducing waste and focuses on capturing value from the waste. Attero is one of the E-waste management companies in India that spin around the unwanted electronics and recovers nearly 98% of high-quality minerals.

  3. Product Life Extension: Companies engaged in this model follow the principle of keeping materials and products in use. It caters to products that might be broken or out of fashion and extends the working lifecycle of such products by repairing and refurbishing. Examples of such companies include Flipkart refurbishment, OLX, Amazon that offer refurbished products.

  4. Sharing as a Service: This model addresses the principle of reducing waste and pollution. Companies with this model will consolidate similar business functions into a single unit that will help to achieve the circular economy industry goals. Examples include Rapido, Uber that provide users with a new way of saving money and ensures to achieve sustainable goals.

  5. Product as a Service: This model aims to tap the shift in consumer behavior towards “access over ownership”, wherein the manufacturers bear the total cost of the product, offering it to customers as a service. Examples include OEMs such as Nissan and Volkswagen that offer direct leases to consumers.

  6. Digital Platforms: Digital platforms in the circular economy industry connect different types of players to promote resource efficiency. They are involved in practices like resale, repair, and recycling, that helps in reducing the reliance on plastic and other virgin materials. This model will minimize waste and create a more sustainable economic system.

  7. Data Analytics and Optimization: Data analytics and optimization as a model under circular economy industry helps in analyzing the product's lifespan to predict the repair and refurbishing need and optimize after sale services, which will help in maximizing the product life and minimizing waste. The analytics segment will change from product to product.

  8. Bioeconomy: A bioeconomy model uses renewable resources by which it combines recycling, cascading use, and closed loop systems to create sustainable products. This will include the usage of materials like biofuels, bioplastics, bio-based chemicals to reduce the dependence on finite resources.

Investments in the Circular economy industry

  • Funding in circular economy industry has increased from $102 Million in 2016 to $590 Million in 2021, at a growth rate of 478% approximately.

  • India is to witness a $45 Billion opportunity in circular economy industry by the end of 2030 and the private sector stands to gain the first mover advantage to secure green investments for applying circular economy industry in their business operations.

  • Most of the investments (over 60% by volume and 80% by value) focus on innovations in the energy and transportation industries respectively.

  • Key opportunity areas lie in sectors like Fashion, Agriculture and Food, Mobility, Construction that provide promising returns yearly.

Notable funding in the Indian industry


Founded Year

Amount Funded

Latest Funding




$54 Mn


Singularity Growth, Baring Private Equity, Cactus Venture Partners and others





One Asset Management Limited





Sixth sense Ventures

BatX Energies




Zephyr Peacock





Blue Earth Capital






The Kabadiwala




Root Ventures

Let’s Recycle




Aavishkaar capital, Circulate Capital


Companies across various sectors are increasingly securing substantial funding in pursuit of circular economy initiatives. This surge is fueled by a shift in investor attitudes, with venture capitalists and governments showing interest in startups adopting circular business models. The circular economy industry, which emphasizes sustainable and circular usage of products over linear consumption, is gaining significant traction.

Government initiatives, such as MSE schemes to promote investment in circular economy startups and subsidies for sustainable mobility, are further propelling this trend. States like Kerala, Tamil Nadu and others are also introducing startup schemes focused on the circular economy. Private investors are developing specific investment criteria for startups in this industry, reflecting a broader movement towards circularity.

On a macro level, numerous startups are innovating to support product and service circularity, supported by backing from various companies. The current landscape is marked by substantial government and private sector support, signaling a strong push towards embracing circular economy principles. This transition represents a fundamental shift towards a more inclusive circular economy, with governments, regulators, and central banks aligning policies and investments accordingly.

Key Metrics for Companies

  • Resource Productivity: This metric will show how effectively companies allocate materials they borrow from Earth. The lower the resources from earth used, the higher the efficiency for the company.

  • Recyclability of product: It is critical to employ biodegradable, recyclable materials throughout the process. The higher the percentage of recyclability of the product, the more you will be able to use it as a source of raw material after recycling.

  • Repairability of product: Repairability measures how many parts of a product are accessible for maintenance. The greater the repairability of the product, the longer consumers can use them.

  • Warranty Period: Companies offering a warranty will ensure then confidence in the longevity of their products. As a result, this will result in increasing the company’s level of achieving efficiency.

  • Renewable energy consumption: Using energy resources like wind or sun in business processes will eliminate the use of natural resources like coal. Also, using renewable energy reduces the carbon footprint of the companies.

Challenges That Companies Often Face

  • Supply Chain Management: One of the challenges that companies in the industry face are managing the supply chain. The circular economy industry mainly revolves around a closed loop system, where products are collected at the end of their life and reused. Companies need to collaborate with the necessary stakeholders to work together to disassemble and recycle the product. Often it is difficult to acquire the appropriate quantity of raw materials to meet demand and given the nascent stage in which the industry operates, creating a supply chain that is sustainable and profitable requires a high amount of capital that is simply not easily available.  

  • Business models: The circular economy industry requires a shift in business models, from selling products to selling services. In this model, companies will have to design products that are durable and should be recycled. It also means companies will have to establish a system of collecting and refurbishing products. This will require a shift in the business model and significant investment in infrastructure and technology.

  • Consumer Behavior: One of the biggest challenges is changing consumer behavior. Consumers are used to linear economy model, where products are created, used, and disposed of. Consumers need to realize the importance of sustainability and have to be educated about adopting a circular mindset.

  • Policy and regulation: Governments across the world need to do more to encourage sustainable practices. Currently, the circular economy industry is very low on government agendas, and this has resulted in limited economic support for firms in the space, which in turn is hindering further growth of the circular economy industry.



In summary, the circular economy industry presents a transformative approach to economic activity that emphasizes sustainability, resource efficiency, and environmental responsibility. As global awareness of environmental issues continues to increase, the circular economy industry offers a compelling framework for businesses and governments to reevaluate traditional linear models and embrace regenerative practices.

Looking forward, the evolution of the circular economy industry will be driven by innovative technologies, collaborative partnerships, and evolving consumer behaviors. Advanced recycling technologies, product-as-a-service models, and waste-to-waste innovations will play key roles in creating value and reducing waste across various industries. Moreover, increased cooperation among businesses, governments, and stakeholders will be crucial for scaling circular solutions and driving systemic change.

To fully unlock the potential of the circular economy industry, concerted efforts are required to overcome existing challenges such as complex supply chains, evolving business models, consumer behavior shifts, and policy frameworks. By harnessing digitalization, data analytics, and collective action, we can accelerate the transition towards a circular economy industry that promotes sustainable development and enhances the quality of life for present and future generations.

Ultimately, adopting the principles of the circular economy industry is not only an economic necessity but also a moral imperative. By embracing circular practices and fostering innovation, we can build a resilient economy that respects planetary boundaries, conserves resources, and ensures a more equitable and prosperous future for all.



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