Recovery from the Covid-19 crisis presents an important and unique opportunity for the EU to accelerate its transition towards a climate-neutral and circular economy. While there is little dispute about the opportunities offered by the funds available for the low-carbon and circular economy, the longer-term impact on Europe’s decarbonisation trajectory will depend on the choices made in the National Recovery and Resilience Plans and on how the overall policy framework is adapted.

After describing the EU recovery plan, this paper discusses various policy instruments – both new and existing – to create demand for circular materials and lower-carbon products, illustrated by examples of four resource and carbon-intensive sectors, namely construction, steel, textiles and plastics.