What: The forthcoming EU Circular Economy Act will set new standards for sustainable production, circular business models, and resource security, reshaping retail and e-commerce across Europe.

Why it is important: The Circular Economy Act will require retailers to adapt business models, supply chains, and compliance processes to meet new sustainability and resource efficiency standards.

The European Commission’s upcoming Circular Economy Act is poised to transform the retail landscape by establishing ambitious legislative standards for sustainability, circular business models, and resource security. With nearly 1,000 stakeholders participating in the consultation process, the Act is expected to prioritize re-use, refurbishment, repair, and recycling, accelerating the growth of recommerce and secondhand trading across the sector. A key focus will be the digitalisation and harmonisation of Extended Producer Responsibility (EPR) schemes, which will reduce administrative burdens and create a more level playing field for retailers and e-commerce platforms operating across the EU. The Act also aims to clarify definitions around circular economy activities, especially regarding re-use and the distinction between waste and secondary raw materials, while promoting product durability, repairability, and the free circulation of secondhand goods. As the EU moves toward mandatory textile waste management, digital product passports, and stricter platform liability, retailers will need to invest in new compliance processes, supply chain transparency, and circular innovation to remain competitive and resilient in a rapidly evolving regulatory environment.

IADS Notes: The forthcoming EU Circular Economy Act is accelerating a major transformation in retail, as highlighted by The Retail Bulletin (March 2025) and Financial Times (February 2025). The Act’s focus on sustainable production, re-use, refurbishment, and harmonized Extended Producer Responsibility (EPR) schemes aligns with a broader industry shift toward circular economy strategies, as demonstrated by leaders like IKEA and John Lewis (Forbes, January 2025; Drapers, October 2025). These retailers are pioneering buy-back programs, resale platforms, and closed-loop initiatives, responding to both regulatory pressure and changing consumer behavior—41% of shoppers now choose repairs over replacement, and 24% actively purchase secondhand items (Retail Asia, December 2024). The EU’s comprehensive approach, including mandatory textile waste management, digital product passports, and stricter e-commerce platform liability, is setting new benchmarks for environmental accountability and resource optimization (Financial Times, February 2025; The Robin Report, November 2025). The sector’s rapid adaptation is further evidenced by significant investments in recycling infrastructure and the mainstreaming of circular business models, with the global secondhand market projected to reach $350 billion by 2028. These developments underscore the convergence of regulatory, business, and consumer drivers making circularity a strategic imperative for retail survival and growth.

Ecommerce Europe gives its opinion on the Circular Economy Act