The transition to a circular economy is at an early stage in the EU.
Regulations, markets and investment tools, including financial risk assessment, are adapted to linear models. Generally speaking, externalities linked to linear business models are not taken into account. This poses a problem for emerging circular models, which have to contend with the challenge of accessing finance, as the financial sector sees circular projects as highly risky.
To improve the conditions for financing CE projects, the Expert Group on Circular Economy Financing identified the main areas where incentives are needed, addressing recommendations to policy makers, financial institutions and project promoters.