3 July, 2025
Europe’s legacy industries are fading — Circular economy is its next champion
by Davide Mazzanti, CEO & Founder of sykell
As EU Green Week 2025 shines a spotlight on “Circular Solutions for a Competitive EU,” and addresses industrial transformation for a greener Europe, it’s becoming clear that many of Europe’s historic industrial strengths — from automotive dominance to energy infrastructure — are under increasing pressure. Global competition, resource scarcity, decarbonisation and shifting geopolitical alliances are exposing deep vulnerabilities in legacy sectors once thought unshakeable.
But amid this turbulence, a new opportunity is rising: the circular economy.
Circular systems, particularly reusable models that combine smart infrastructure with digital orchestration, represent one of Europe’s best chances to regain strategic leadership, accelerate decarbonisation, and build true industrial resilience to withstand supply chain risks.
If Europe moves decisively, the circular economy could become its next global champion by aligning innovation, sustainability, and competitiveness. The question is whether policymakers and businesses will seize the opportunity fast enough.
iStock/elenabs
The decline of legacy industries
Europe’s traditional industrial sectors, think of automotive, energy, and manufacturing, have long been pillars of economic strength. However, these industries are increasingly challenged by global competition, technological disruption, and shifting consumer demands. The reliance on linear production models, characterised by a ‘take-make-dispose’ approach, has led to inefficiencies and environmental degradation.
For instance, Europe’s automotive industry faces strong competition from new electric vehicle makers. Traditional manufacturing sectors depend heavily on finite resources and are vulnerable to supply chain disruptions. Rising energy costs and geopolitical tensions add further pressure. These challenges highlight the urgent need for a new approach to industrial development.
Embracing circular economy as a strategic imperative
The circular economy offers a viable pathway to revitalise Europe’s industrial landscape. By prioritising resource efficiency, waste reduction, and product lifecycle extension, circular models can enhance competitiveness and sustainability.
Key benefits include:
- Resource autonomy: Reducing dependency on imported raw materials by maximising the use of existing resources through reuse.
- Economic resilience: Mitigating supply chain risks by designing products to last longer, extending their use cycles, and reducing reliance on fragile global inputs.
- Innovation and job creation: Stimulating new business models and employment opportunities in fields such as remanufacturing, repair services, washing operations, and smart logistics for circular systems.
Building a resilient circular economy will require more than new materials and products; it will require new digital infrastructure. Systems like Circular ERP enable companies to control, optimise, and expand reuse operations across entire supply chains, delivering the traceability, efficiency, and transparency that make circularity scalable at an industrial level.
Policy alignment and investment opportunities
As spotlighted during EU Green Week 2025, focused on “circular solutions for a competitive EU”, Europe’s path to industrial transformation hinges on embedding circular principles into its economic fabric. The event emphasised that circular economy strategies, particularly those enabling product reuse, systems repairability, and materials circularity, are not just environmental imperatives but key drivers of competitiveness and resilience.
To fully realise the potential of the circular economy, supportive policy frameworks and investments are crucial. EU’s initiatives, such as the Circular Economy Action Plan, the Ecodesign for Sustainable Products Regulation, the Sustainable Products Initiative, and the Packaging and Packaging Waste Regulation, aim to promote sustainable product design, drive reuse and recycling targets, and empower consumers to make more sustainable choices.
However, further action is needed to:
- Incentivise circular business models: Providing financial support and tax incentives for companies adopting circular practices.
- Standardise metrics: Developing consistent measurement tools to assess circularity performance and impact.
- Foster collaboration: Encouraging partnerships between governments, businesses, and academia to drive innovation and knowledge sharing.
Investing in circular infrastructure and research can position Europe as a global leader in sustainable industry.
Charting a circular future for Europe
The decline of legacy and crucial industries presents both a challenge and an opportunity. By embracing the circular economy, Europe can redefine its industrial identity and increase independence, aligning economic growth with environmental stewardship. This transition requires concerted efforts from policymakers, businesses, and society at large.
Europe’s competitive edge will be defined not by production volume, but by how sustainably and intelligently it uses its resources, an ethos embodied by the circular economy. The Draghi Report’s call for strategic investment, along with the themes of EU Green Week 2025, reinforces this message: the circular economy must be Europe’s next strategic growth engine. This generational opportunity can reshape Europe’s industrial identity and reclaim global leadership through sustainability, innovation, and resilience.
About sykell
sykell offers CIRCULAR ERP, an IT solution for efficient resource management tailored to companies in the circular economy. In its initial stage, CIRCULAR ERP provides the core functionalities of an ERP system for reuse businesses, including clearing and deposit handling, while also enabling the use of synergies within return and cleaning logistics. The system will be expanded to cover additional use cases in the coming months.
Building on CIRCULAR ERP, sykell also successfully operates its own reusable system called EINFACH MEHRWEG. This reuse system, certified with the Blue Angel ecolabel, impresses consumers with its ease of use and convenient returns via reverse vending machines—just as simple as the familiar bottle deposit system. sykell partners nationwide with chain grocery retailers, petrol stations and food service businesses for EINFACH MEHRWEG. sykell was founded in Berlin in 2021.
