Report
Financing the circular economy: a response to industrial and environmental challenges
How can the scale-up of the circular economy be financed? In its second year, the Circular Finance Coalition, led by Circul'R with five major French banking groups and EDF, analysed four sectors that are strategic for European sovereignty: lithium-ion battery, titanium and copper recycling, and waste heat recovery. The report sets out their investment needs, the risks holding back their financing and the levers to accelerate it.
Authors
Jean Billant
Managing Consultant
Louis Pellet
Senior Consultant
Alexandre Lavieille
Consultant
Geopolitical, economic and environmental crises are multiplying and weakening supply chains for metals, energy and water. For companies, the risk is concrete: supply disruption, price volatility, loss of competitiveness. Their financiers are exposed to it as well.
The circular economy is one of the main levers for responding: it reduces dependence on virgin resources, makes use of the materials and energy available locally and secures industrial value chains. Deploying it at scale, however, requires new industrial capacity and infrastructure, and therefore significant investment and appropriate financing solutions.
Is circular economy financing meeting the need?
No, it remains far below what is needed. According to the Circularity Gap Report Finance (Circle Economy, 2025), only 2% of commercial investments recorded worldwide between 2018 and 2023 went to companies engaged in the circular economy. In the European Union, the European Investment Bank and the European Commission (2026) put this investment at €120bn a year, 93% of it private. An additional €82bn a year is needed between 2025 and 2040 to meet current European ambitions, at a time when the EU is stepping up its sovereignty and reindustrialisation goals through the Critical Raw Materials Act and the forthcoming Circular Economy Act.
What is circular finance?
The report defines “circular” finance as finance that seeks to anticipate market transformations in order to support circular solutions that strengthen resilience to systemic shocks. It depends on the ability of financial institutions to grasp the structural challenges of the circular transition and translate them into relevant financing mechanisms.
Which sectors did the Circular Finance Coalition analyse?
Led by Circul'R, the Circular Finance Coalition brings together BNP Paribas, Groupe BPCE, Groupe Crédit Agricole, Crédit Mutuel Alliance Fédérale, La Banque Postale and EDF, with the support of ADEME and the French Ministry for Ecological Transition. After a first year spent diagnosing the barriers, it focused on industrial and territorial ecology and critical materials. Its workshops brought together industrial companies, project developers, financiers, experts and public stakeholders with a twofold objective: to help financial players understand the business models, investment needs and risks of four sectors, and to identify the levers for scaling them up.
Lithium-ion battery recycling: a refining gap in Europe
Concentrating lithium, nickel, cobalt and manganese, lithium-ion batteries are a matter of European sovereignty. The market is industrialising fast but remains unbalanced: Europe has pre-treatment overcapacity, lacks refining capacity and exports around 80% of its black mass outside the EU. A hydrometallurgy plant represents an investment of €200-500M.
Titanium recycling: machining scraps sent abroad
Europe produces no titanium sponge and therefore depends on imports. Most European and British machining scraps go to the United States (14,500 t in 2025) for lack of local processing capacity. Yet recycling them uses 3 to 8 times less energy than primary production.
Copper recycling: a resource leaving Europe
A key resource for the energy and digital transitions, copper faces a major risk of shortage, with a global deficit estimated at 6 million tonnes on average by 2035. Lacking sufficient refining capacity, the EU sees more than 600,000 tonnes of copper waste leave every year. An electrolytic refining unit represents €3-5bn for a capacity of around 400 kt/year.
Waste heat: an under-exploited 66 TWh resource
Industrial waste heat is a critical lever for decarbonisation. France's PPE3 targets 21 to 29 TWh/year delivered to district heating networks by 2035, compared with 3.9 TWh in 2022, an investment need estimated at €19bn. The main barrier: a network's dependence on a single industrial supplier or customer.
Which levers can accelerate circular economy financing?
The report draws four lessons common to the four sectors:
- Public and private financing is already supporting projects. Equity, industrial loans, structured finance and grants are combined, as with the R-PAS heating network (over €40M) or EcoTitanium (€48M).
- Scaling up requires significant investment in strategic industrial links and infrastructure: battery refining, heat transport, metal preparation and refining.
- Securing business models and managing industrial risks is decisive. High upfront investment, price volatility, limited visibility on supply and offtake: for financiers, secured flows, long-term contractual commitments and revenue predictability are key.
- Cooperation between financial, industrial and public stakeholders must be strengthened, notably around public-private co-financing, guarantee and risk-sharing mechanisms.
What the report contains
- An executive summary and a presentation of the coalition
- For each sector: the value chain, financing challenges and examples of financed projects in Europe
- Statements in support of the report from Sébastien Soleille, Sustainable Finance Director at the French Banking Federation (FBF), Baptiste Perrissin-Fabert, Deputy CEO of ADEME, and Jules Coignard, co-founder of Circul'R
The report is available free of charge in English and French. To go further, discover our circular economy financing expertise.
FAQ
What is circular finance?
It is finance that seeks to anticipate market transformations in order to support circular solutions that strengthen resilience to systemic shocks, as defined in the Circular Finance Coalition report.
What is the Circular Finance Coalition?
Launched in 2024 and led by Circul'R, it brings together BNP Paribas, Groupe BPCE, Groupe Crédit Agricole, Crédit Mutuel Alliance Fédérale, La Banque Postale and EDF, with the support of ADEME and the French Ministry for Ecological Transition, to create favourable conditions for financing the circular economy.
How much financing is missing for the circular economy in Europe?
According to the European Investment Bank and the European Commission (2026), the EU invests €120bn a year in the circular economy, but €82bn a year is missing between 2025 and 2040 to meet current European ambitions.
Which sectors does the report analyse?
Lithium-ion battery, titanium and copper recycling, and industrial waste heat recovery.
What is holding back the financing of circular projects?
The four sectors studied share several challenges: high upfront investment, price volatility and sometimes limited visibility on supply and offtake.
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FAQ
What you need to know about us.
Qu'est-ce que Circul'R ?
Circul'R est un cabinet de conseil spécialisé en économie circulaire. Depuis 2016, il accompagne plus de 150 grandes entreprises et acteurs publics à travers des missions de conseil, des coalitions sectorielles, des programmes de formation et le Club Circul'R.
What sets Circul'R apart from a generalist consulting firm?
Circul'R has focused exclusively on the circular economy since its inception. This specialization allows us to develop an expertise in resource dynamics and sector-specific transformations that a generalist firm cannot match.
What types of organizations do you work with?
Contrairement à un cabinet RSE généraliste, Circul'R est spécialisé exclusivement en économie circulaire depuis 2016. Cette expertise transverse - filières, réglementations (AGEC, REP, ESPR), business models - lui permet de transformer la circularité en avantage compétitif mesurable : réduction d'impact, sécurisation des ressources, conformité et nouveaux relais de croissance.
What is the process for a consulting project with Circul'R?
Circul'R conseille les grandes entreprises privées - dont de nombreux groupes du CAC 40 et du SBF 120 - sur leurs décisions stratégiques, tous secteurs confondus. Le cabinet accompagne également les acteurs qui déploient les politiques publiques d'économie circulaire : éco-organismes, agences, bailleurs de fonds et collectivités.
Do you operate only in France or internationally as well?
Circul'R propose quatre offres complémentaires : des missions de conseil sur mesure pour structurer votre stratégie circulaire, des coalitions sectorielles pour résoudre des problématiques communes entre entreprises, des formations pour monter en compétence sur l'économie circulaire, et le Club Circul'R, le réseau des entreprises engagées dans la transition circulaire.
How does the circular economy fit into an existing corporate strategy?
Circul'R accompagne ses clients sur l'ensemble du cadre réglementaire français et européen de l'économie circulaire : loi AGEC, filières REP, CSRD, ainsi que les textes européens récents (PPWR, ESPR, CRMA). Le cabinet traduit ces obligations en feuilles de route opérationnelles, pour transformer une contrainte de conformité en avantage stratégique.
What is a sector-based coalition and how can I participate?
Nous définissons en amont des indicateurs de circularité adaptés (matières économisées, taux de réemploi, réduction d'empreinte, valeur générée) et suivons leur évolution tout au long de la mission, pour des résultats business et environnementaux concrets.
How do you measure the results of your engagements?
Basé à Paris, Circul'R intervient principalement en France et en Europe. À l'international, il accompagne des projets de coopération : partage de l'expertise française sur la REP, appui aux bailleurs de fonds sur leurs programmes de transition circulaire dans les pays émergents, via un réseau de partenaires opérationnels et d'experts sectoriels.
What is the average duration of a project?
Contactez l'équipe via le site : Circul'R analyse vos enjeux puis propose le dispositif adapté (mission de conseil, rejoindre une coalition, suivre une formation ou adhérer au Club) pour accélérer votre transition vers l'économie circulaire.