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# Circular Economy

> An economic model that keeps products, components and materials in use at their highest value for as long as possible, reducing waste and demand for primary resources.

## Definition

An economic model in which products, components and materials are kept in circulation at their
highest useful value through durability, reuse, repair, remanufacture and recycling, in contrast
to a linear model of extraction, use and disposal.

## Expanded Explanation

In European Union policy the circular economy is the objective that the Ecodesign for Sustainable
Products Regulation is intended to serve. The regulation's instruments, such as durability,
reparability, recycled content and information requirements, are means of making circular outcomes
possible at scale rather than dependent on individual goodwill.

The model is usually described as a hierarchy. Keeping a product in use through maintenance and
repair preserves the most value; reuse and remanufacture preserve less; material recycling preserves
least but still avoids primary extraction. Each step depends on information: a repairer needs part
identity and disassembly guidance, a recycler needs material composition and substance data.

This is where the Digital Product Passport fits. Circular activity is limited less by willingness
than by the fact that the information needed at end of life sits with the manufacturer and is not
available to the party holding the product years later.

## Why It Matters

Framing passport work as a purely regulatory cost misses the operational point. The same data that
satisfies a delegated act also supports resale, take back, warranty and spare part programmes, which
is where organisations recover value from the investment.

## Common Misconceptions

#### Circular economy means recycling

Recycling is the last resort in the hierarchy, not its definition. Extending product life through
durability and repair retains far more of the embedded value and energy.

## Related Terms

* [Product Lifecycle](/docs/knowledge-base/glossary/product-lifecycle)
* [Sustainability Data](/docs/knowledge-base/glossary/sustainability-data)
* [ESPR](/docs/knowledge-base/glossary/espr)
* [Digital Product Passport](/docs/knowledge-base/glossary/digital-product-passport)

## Related Knowledge Base Articles

* [What Is a Digital Product Passport?](/docs/knowledge-base/digital-product-passports/what-is-a-digital-product-passport)
* [Who Needs a Digital Product Passport?](/docs/knowledge-base/digital-product-passports/who-needs-a-digital-product-passport)

## Related Articles

* [Extended Producer Responsibility](/docs/knowledge-base/glossary/extended-producer-responsibility)
* [Product Lifecycle](/docs/knowledge-base/glossary/product-lifecycle)
* [Sustainability Data](/docs/knowledge-base/glossary/sustainability-data)
* [ESPR](/docs/knowledge-base/glossary/espr)
* [Authorised Representative](/docs/knowledge-base/glossary/authorised-representative)
* [Authoritative Source](/docs/knowledge-base/glossary/authoritative-source)
* [Battery Passport](/docs/knowledge-base/glossary/battery-passport)
* [Conformity Assessment](/docs/knowledge-base/glossary/conformity-assessment)

## See Also

* [Governance & Assurance](/docs/knowledge-base/compliance-frameworks/overview)
* [Industry Guides](/docs/knowledge-base/industry-guides/overview)

## References

* Regulation (EU) 2024/1781, Official Journal of the European Union:
  [https://eur-lex.europa.eu/eli/reg/2024/1781/oj](https://eur-lex.europa.eu/eli/reg/2024/1781/oj)
* European Commission, Circular Economy Action Plan:
  [https://environment.ec.europa.eu/strategy/circular-economy\_en](https://environment.ec.europa.eu/strategy/circular-economy_en)
* Directive 2008/98/EC on waste, waste hierarchy: [https://eur-lex.europa.eu/eli/dir/2008/98/oj](https://eur-lex.europa.eu/eli/dir/2008/98/oj)

## About This Article

About This Article

<dl>
  <dt>
    Last Reviewed
  </dt>

  <dd>
    2026-08-07
  </dd>

  <dt>
    Next Scheduled Review
  </dt>

  <dd>
    2027-08-07
  </dd>

  <dt>
    Article Version
  </dt>

  <dd>
    1.0
  </dd>
</dl>

tieback Knowledge is a continuously maintained reference library covering Digital Product
Passports, product traceability, product compliance and related regulations. Articles are
reviewed regularly as legislation, standards and implementation guidance evolve.

## Related Docs

* [Governance & Assurance](/docs/knowledge-base/compliance-frameworks/overview)
* [Industry Guides](/docs/knowledge-base/industry-guides/overview)
* [Digital Product Passports](/docs/knowledge-base/digital-product-passports/overview)
* [Glossary](/docs/knowledge-base/glossary/overview)