What is the Value Gap?
Produced by Circle Economy in collaboration with Deloitte Netherlands, the report introduces the Value Gap as a new analytical lens. It shows how linear practices, such as avoidable waste and inefficient material use result in significant, systemic value loss. It also quantifies where these losses occur in the system including process loss, energy loss, food and product waste and fix assets deterioration.
This framing speaks directly to finance ministries, treasuries and economic strategists who may have previously seen the circular economy as a sustainability side-project rather than a core economic strategy. Closing the value gap is not only an environmental imperative but a major economic opportunity to build resilience and reduce missed social and economic benefits. It also has the potential to increase productivity and competitiveness at a time where resources and supply chains are strained.
A deepening problem but a growing opportunity
The current trajectory on circular economy is sobering and this report captures that in very clear numerical terms. Global circularity has fallen further, from 7.2% to 6.9%. This means that only 6.9% of the materials entering the global economy are secondary. The direction of travel is wrong, and it has been for years; the share of secondary materials consumed by the global economy has decreased from 9.1% in 2018 to 7.2% in 2023 — a 21% drop over the course of five years.
This decline is not a failure of ambition but reflects structural economic incentives that continue to reward extraction and disposal over retention and regeneration. The Value Gap framework helps to articulate those incentives more precisely and therefore challenge them more effectively.
What this means for policy
2026 is proving to be a busy year for circular economy policy landscape. EU's forthcoming Circular Economy Act is to be adopted in autumn 2026. It aims to strengthen the single market for secondary raw materials and address regulatory fragmentation and barriers affecting recycled and reused materials. The initiative is expected to support the EU's objective of doubling the circular material use rate to around 24% by 2030. Many member states (e.g. Germany, Ireland, Netherlands) have already produced strategies and plans to address the requirements.
In the UK, the picture is mixed. In England, the CE Growth Plan is still awaited while Scotland has recently published their CE Strategy to 2045. The CGR 2026 provides precisely the kind of economic evidence base that could and should animate a more ambitious UK-wide response. As our recent policy recommendations paper Circular economy policy for green growth noted an ambitious circular economy growth plan could retain valuable materials within the UK, strengthen supply chains and insulate them from constant geopolitical shocks and drive innovation. The Value Gap provides further economic vocabulary to make that case compellingly across government departments.
Completing the circle: people and skills
The CGR has grown from a global assessment into the leading benchmark for measuring circularity worldwide. The publication supports targeted action bridging the gap between measurement, strategy, and implementation. The addition of the Value Gap is a significant evolution: it moves the conversation to what is lost in this economy and what could be gained, speaking more directly to the audiences like investors, policymakers and corporates who hold the levers of systemic change. It recommends clear steps for these audiences including:
To complete the picture and enable the implementation of the report’s recommendations, we need to also focus on the skills and the people needed to transition the system into a more productive and sustainable model. The circular economy has a potential to create 200,000 jobs in Britain1 and bring social and economic value to communities.
Our experience of working with sustainability professionals shows that these skills are needed across job functions, ranging from logistics, remanufacturing and repair to data management and product design while reflecting the local communities and regions to fit with strategic industry planning. They are also needed to attract both early‑career entrants to boost long term prospects of the sector and to make career transitions later in life more attractive for people with life experience and transferable skills.
As part of our recent policy recommendations paper Circular economy policy for green growth we are advocating for a national Circular Skills Plan, backed by updated training, apprenticeships, local delivery and derisking through procurement and insurance.
The Value Gap provides further evidence to recognise that circularity is not a niche environmental concept but a central economic strategy for the decades ahead. It has a potential to support growth, strengthen communities and ensure that the transition to a low-carbon economy is a more inclusive and economically robust one.
