The circular economy is in the midst of a profound shift. An unprecedented wave of waste and recycling regulation is making its way across Europe as governments seek to embed circularity throughout the economy. This transformation will place significant new demands on data for businesses both in terms of volume and quality.
For companies operating in the circular economy and helping businesses meet reporting requirements, they need to be looking ahead to the next five to 20 years to ensure they are match fit to support customers in complying with this rapidly changing landscape and heightened data scrutiny.
This article will look at some of the key regulatory and technological trends shaping this market and how the industry needs to adapt.
The shifting regulatory backdrop
Vast swathes of regulation are progressing across the EU and UK and are due to come into effect over the next few years. One of the main pieces of legislation is Extended Producer Responsibility (EPR) requiring producers to fund the collection, sorting and recycling of products they place on the market. EU member states are already required to operate EPR schemes for packaging, batteries, WEEE electronics – and the EU recently approved new regulations to extend EPR to additional sectors, most notably textiles.
The EU is also developing Digital Product Passports to provide a digital record of a product’s complete lifecycle. Meanwhile, the UK is set to deploy one of the world’s largest Deposit Return Schemes (DRS) in 2027 and is also establishing a Digital Waste Tracking System to replace the current paper-based method with a transparent digital system to monitor waste from creation to disposal. Together, these initiatives represent seismic shifts in how data is captured and managed.
Robust data platforms with new global products will be needed
To remain competitive for the next 20 years, circularity operators must have best-in-class data and technology platforms capable of handling this explosion of information.
Operators will need to move away from legacy, fragmented and monolithic technology stacks to modern, cloud-native data platforms that can process vast quantities of unstructured data from multiple sources. These platforms must then be able to turn this data into structured, actionable insights that customers can use to meet their reporting obligations and drive better decision-making about product design, reuse and recycling.
Digitising the supply chain
A crucial step in achieving this readiness is digitising the supply chain, replacing manual, email-based data collection with automated connectivity that provides real-time operational visibility and data sharing between customers, suppliers and central systems.
The advantages to customers
By investing in these data-driven systems, circular economy operators can deliver far more transparent and efficient services. Customers can benefit from faster data transfer, fewer manual interventions and greater data accuracy and consistency.
One of the most significant opportunities for customers – particularly those in the FMCG, grocery and fashion sectors – is the potential to use these data insights to drive better decision-making about product design which can materially lower costs under schemes such as EPR.
Customers in these sectors can use detailed reporting to understand precisely what packaging or textile materials they are currently placing on the market and how that compares with their peers, enabling them to redesign products to lower packaging weights, improve recyclability and cut costs.
Be in lockstep with customers
Ultimately, circularity operators will need to evolve in lockstep with their customers who are themselves investing heavily in AI and data platforms. Those who invest early in scalable infrastructure platforms will be able to lead the next wave of innovation across the circular economy and play a pivotal role in helping businesses optimise resources, prevent waste, lower carbon emissions and costs.
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