HYDERABAD, India, Aug. 26, 2025 /PRNewswire/ -- According to research report published by DataM Intelligence, "The Circular Economy Market Size valued US$149.86 billion in 2024, is projected to reach US$355.44 billion by 2032, expanding at a robust CAGR of 11.40% from 2025 to 2032." Global concerns over waste management and resource scarcity are significantly driving the circular economy market, as nations and industries face the dual challenge of rising waste volumes and depleting raw materials.
With the World Bank projecting global waste to reach 3.4 billion tons by 2050, governments are increasingly promoting recycling and resource efficiency to reduce environmental pressure. The European Union's Circular Economy Action Plan (2020) is a prime example, focusing on minimizing resource dependency and creating sustainable production cycles across plastics, textiles, and electronics.
Leading corporations are also responding; for instance, Apple announced that over 20% of materials in its products in 2023 were from recycled sources, including rare earth elements, addressing both waste and scarcity concerns. These developments highlight how waste management pressures and resource scarcity are accelerating global investments and adoption of circular economy practices.
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Growing Corporate Adoption of ESG and Sustainability Goals
Growing corporate adoption of ESG and sustainability goals is a strong driver of the circular economy market, as businesses increasingly integrate environmental performance into their core strategies. In 2024, Willis Towers Watson PLC, reported a continued rise in the inclusion of ESG measures in executive incentive plans, highlighting how sustainability has become a top priority for leadership across global markets.
Notably, in Asia-Pacific, the share of leading companies incorporating ESG metrics surged by 14 percentage points, from 63% in 2022 to 77% in 2023, showing a rapid shift toward accountability. This growing focus encourages investments in circular solutions such as recycling, renewable materials, and product life extension.
By linking ESG compliance with executive performance, companies are actively driving the transition toward sustainable business models. As more organizations adopt similar frameworks, the demand for circular economy practices will continue to accelerate worldwide. The circular economy market is gaining momentum as sustainability and ESG goals reshape business priorities. Rising adoption across industries ensures long-term growth, resource efficiency, and reduced environmental impact.
Technological Challenges in Recycling Complex Materials
Technological challenges in recycling complex materials act as a major restraint for the circular economy market. Many products, such as electronics, multi-layered packaging, and composite materials, are difficult to dismantle and recycle efficiently. The lack of advanced sorting and separation technologies often leads to low recovery rates and high processing costs. For instance, recovering rare earth metals from e-waste remains both technically challenging and economically unviable at scale. These limitations slow down adoption and hinder the full potential of circular economy practices.
Development of Circular Packaging Solutions Across Industries
The development of circular packaging solutions across industries presents a significant opportunity for the circular economy market, as businesses look to reduce single-use plastics and shift toward sustainable alternatives. Companies are increasingly adopting recyclable, reusable, and biodegradable packaging to meet both regulatory requirements and consumer demand for eco-friendly products.
For instance, major FMCG players like Unilever and Nestlé are introducing refillable and reusable packaging models, cutting down waste generation. In the retail sector, brands such as IKEA are exploring compostable and paper-based materials to replace plastics. Similarly, the e-commerce industry is investing in returnable packaging systems to minimize packaging waste.
Governments are also supporting this transition by banning single-use plastics and promoting extended producer responsibility (EPR) programs. The food and beverage industry is another key adopter, with innovations in plant-based and recyclable packaging materials. These shifts create a robust demand for circular packaging technologies and solutions across industries.
Automotive Industry Driving Circular Economy Through Recycling and Secondary Material Adoption
The automotive segment is accelerating the circular economy by setting ambitious recycling and sustainability goals. DENSO has created a Circular Economy Development Division with the mission of achieving 90% vehicle weight recycling, focusing on turning end-of-life vehicles (ELVs) into raw materials for new cars, thus enabling a true Car-to-Car circular economy.
Similarly, the BMW Group has made circularity a strategic pillar of its product development, with an emphasis on increasing the use of secondary materials. This approach not only helps the company reduce its dependence on critical raw materials but also lowers CO2e emissions across the supply chain.
By cutting reliance on primary raw material extraction and processing, BMW is addressing both environmental and social challenges. These efforts reflect how leading automakers are embedding circularity into design and production. Such initiatives are creating a closed-loop system in the automotive sector. Collectively, these strategies highlight the industry's role as a powerful driver of the circular economy market.
North America Accelerating Circular Economy Through Innovation and Industry Collaboration
North America is driving the circular economy market by advancing large-scale initiatives, policies, and innovations that promote sustainability and resource efficiency. In the U.S., the Plastics Pact reported notable progress, with sustainable packaging adoption increasing from 36% in 2021 to 50% in 2023, alongside a rise in post-consumer recycled content to 11%.
Companies are also embracing innovation, with Eastman opening the world's largest molecular recycling facility in Tennessee to process hard-to-recycle plastics. Consumer goods firms like Kraft Heinz are shifting toward recyclable paperboard packaging, eliminating nearly three million pounds of plastic annually. Regulatory support and corporate ESG commitments further strengthen circular adoption in packaging, automotive, and construction.
The region is also investing heavily in EV battery recycling and secondary material use to reduce reliance on virgin resources. According to the Ellen MacArthur Foundation, circular models could unlock up to USD 1.5 trillion in climate and economic opportunities in North America. These combined efforts demonstrate how government action, corporate responsibility, and innovation are accelerating the shift to a circular economy.
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Conclusion
The circular economy market is rapidly evolving as industries, governments, and consumers collectively push for sustainable solutions. Rising concerns over waste management and resource scarcity are compelling businesses to adopt recycling, reuse, and product life extension strategies. The integration of ESG goals into corporate strategies further accelerates adoption, with companies tying executive performance to sustainability metrics.
Technological innovations, such as molecular recycling and EV battery recovery, are unlocking new opportunities despite challenges in processing complex materials. Circular packaging solutions are reshaping FMCG, retail, and e-commerce sectors by reducing reliance on single-use plastics. The automotive industry, led by players like BMW and DENSO, is embedding recycling and secondary material use into design and manufacturing.
Regional momentum is strong, with North America, Europe, and Asia-Pacific implementing robust policies and infrastructure for circular models. Collaborative initiatives among governments, NGOs, and private corporations are fostering systemic change. Opportunities also arise from digital technologies like IoT and blockchain, enabling transparency and efficiency in resource tracking. Overall, the market is poised for sustained growth, driving both environmental benefits and economic value creation globally.
Related Research Reports Published by DataM Intelligence:
1. Economy In Automotive Market is expected to reach US$ 75.26 billion by 2032, to Transform Global Mobility with Sustainable Materials and Recycling Innovation
2. AI, IoT & Blockchain Drive Digital Circular Economy Market Toward US$ 13.84 Billion by 2032
3. EV Boom Fuels Circular Battery Recycling Market Expansion to US$ 56.07 Billion by 2032
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