Advancing Circular Economy Cooperation between the European Union and the Kingdom of Saudi Arabia

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Advancing Circular Economy Cooperation between the European Union and the Kingdom of Saudi Arabia

The pressing need to transform how we produce, consume and manage resources is shaping supply chains and economies around the world. At the forefront of this global shift is the circular economy: a powerful model that turns waste into opportunity. The circular economy involves transitioning away from the traditional linear business model of “take, make, dispose” to a more sustainable pattern of production and consumption where product and materials are designed in closed loop models. Simply put, the circular economy emphasizes the need to make and use products in a way they can be used again, fixed, or recycled so that nothing is wasted. This transformation is at the heart of Europe’s sustainability agenda under the European Green Deal. Launched in 2019, the EU Green Deal consists of a package of policy initiatives, which set the EU on the path to a green transition, with the ultimate goal of reaching climate neutrality by 2050 and is increasingly embraced by Saudi Arabia through its Vision 2030 and Saudi Green Initiative (SGI) “an ambitious national initiative that is focused on combating climate change, improving quality of life, and protecting the environment for future generations” (Saudi Vision 2030, 2024). While Europe has advanced frameworks emphasizing regulatory certainty and eco-design, Saudi Arabia is implementing ambitious targets for landfill diversion, carbon removal, and resource recovery under an emerging governance structure though Vision 2030. Both approaches aim to link sustainability, competitiveness, and innovation through sustainable supply chains and decarbonized industries, offering a powerful basis for long-term cooperation in energy, waste, and the mobility sector.

Importance of Circular Economy

According to the Ellen Macarthur foundation (2021), “applying circular economy strategies in just five key areas (cement, aluminum, steel, plastics, and food) can eliminate almost half of the remaining emissions from the production of goods – 9.3 billion tons of CO2e in 2050 – equivalent to cutting current global emissions to zero”. This potential for emission reduction aligns with the growing economic importance of the circular economy, as “the worldwide revenue of circular economy transactions was estimated to total roughly 339 billion USD in 2022 and forecasted to more than double by 2026” (Statista Research Department, 2023). However, despite the global economy’s circularity rate currently stands at just 6.9%, indicating that less than 7% of the materials used worldwide originate from recycled or reused sources This significant disparity between the expanding circular economy market and the limited use of recycled materials underscores the urgent need to scale up circular practices worldwide to reduce reliance on virgin resources, minimize environmental impacts, and unlock significant economic opportunities through sustainable production and consumption.

The European Green Deal and the Circular Economy Action Plan: Foundations for the Circular Economy Act

The European Green Deal is the EU’s current strategy to deliver climate neutrality by 2050. It outlines a comprehensive approach to tackling climate change, addressing biodiversity loss and reducing pollution, while simultaneously ensuring competitiveness and innovation. The European Union’s Circular Economy Action Plan (CEAP), adopted in March 2020, is a key element of the European Green Deal. It builds on the 2015 circular economy action plan but significantly expands its scope to include eco-design standards, extended producer responsibility (EPR), and green public procurement. At its core, the plan advances three objectives:

Product life-cycle management: Designing goods for durability, reuse, repair, and recycling, extending their lifespan, and reducing the material footprint.
Sustainable resource use: Boosting uptake of secondary raw materials and resource efficiency throughout value chains.
Waste reduction: Focusing on “closing the loop” by preventing waste and converting unavoidable waste into valuable inputs.

By framing sustainability as both a vital environmental responsibility and an engine for innovation and job creation, the Green Deal lays the groundwork for further integration of the circular economy, with regulatory proposals expected to accelerate the marker for secondary materials, remove trade barriers, and increase recycled content requirements from 2026 onwards. In August 2025, the European Commission initiated a Call for Evidence and public consultation for a new Circular Economy Act (CEA), marking the first official step toward shaping this key regulation.

Advancing Circular Economy and ESG Integration under Saudi Vision 2030

Meanwhile, Saudi Arabia, through its Vision 2030 and the accompanying Saudi Green Initiative, is also embracing circularity as a lever for sustainable economic growth. The policy environment in Saudi Arabia remains emergent, with challenges related to awareness, but also with growing interest in circular economy practices and decarbonization.

First announced in 2016 under the leadership of HRH Crown Prince and Prime Minister Mohammed bin Salman, Saudi Arabia’s Vision 2030 strategy reflects growing commitment to sustainability, embedding circular economy principles alongside ambitious economic diversification goals. The Saudi Green Initiative incorporates circularity and the Circular Carbon Economy (CCE), which applies the “4Rs” (Reduce, Reuse, Recycle, and Remove, to carbon management), aiming for net-zero emissions by 2060. To date, Saudi has implemented more than 30 CCE initiatives across the energy system, enabling climate action while bolstering economic growth. Furthermore, the Saudi Investment Recycling Company (SIRC), a subsidiary of the Public Investment Fund, plays a central role in executing circular economy investments, by aiming to collaborate with the private sector and champion the circular economy, attracting both local and global investments.

In parallel, Environmental, Social, and Governance (ESG) considerations have become an integral part of Vision 2030’s agenda, reinforcing the drive toward responsible investment and corporate accountability. Saudi regulators, including the Capital Market Authority (CMA) and the Saudi Exchange, are strengthening disclosure requirements to enhance transparency and align with international ESG reporting standards. In 2018, the Saudi Exchange became a partner exchange supporting the UN Sustainable Stock Exchanges Initiative, working to promote ESG awareness and encourage sustainable investment in collaboration with market participants such as issuers and investors. Listed companies are increasingly required to disclose their sustainability performance, climate-related risks, and governance practices, helping investors evaluate long-term value creation while supporting national sustainability ambitions. These evolving regulatory frameworks not only foster greater accountability but also position ESG integration as a critical enabler for achieving the goals of Vision 2030 and the Saudi Green Initiative.

From Policy to Partnership: Advancing Circular Economy Collaboration Between the EU and Saudi Arabia

Together, these frameworks illustrate how both the EU and Saudi Arabia are leveraging circular economy strategies to drive sustainability, economic resilience, and climate goals in their respective regions. The EU, through its robust Circular Economy Action Plan and the broader Green Deal, creates a substantial market for circular products and services, one that Saudi Arabia can both supply and benefit from, particularly as it develops its waste management infrastructure and circular economy capabilities under Vision 2030 and the Saudi Green Initiative.

Through shared standards, regulatory dialogues, and investment partnerships, both the EU and Saudi Arabia can unlock innovation and economic gains while advancing climate goals.

The European Chamber of Commerce in the Kingdom of Saudi Arabia (ECCKSA) plays a strategic role in fostering this alignment by convening business stakeholders, advising on policy development, and enabling knowledge exchange between EU and Saudi regulators. For example, in the energy transition sector, the ECCKSA has initiated a series of exchanges between European companies through an Energy Roundtable, discussions with the European Commission’s Directorate-General for Energy (DG ENER), including Ms Ditte Juul-Jørgensen, Director-General, and a dedicated ECCKSA Energy Committee, which will soon begin its activities to serve as a platform for engagement with Saudi stakeholders in the sector. It offers a unique framework for structured dialogue and collaboration between the European private sector and Saudi partners. ECCKSA’s efforts to promote circular economy principles, ESG frameworks, and standard-setting are central to unlocking deeper cooperation and expanding market opportunities between Europe and Saudi Arabia.

Moreover, promising opportunities for cooperation span multiple sectors, all of which as highlighted in the CEAP and Vision 2030 initiatives.

Energy transition and clean technology: Deployment of renewable energy systems, hydrogen technologies, and carbon capture aligned with CCE goals.
Construction and infrastructure: Addressing demolition waste through reuse and recycling, an area where EU firms already hold expertise.
Mobility and transport: Developing sustainable logistics and smart mobility systems reduces emissions while stimulating innovation.
Plastics and packaging: Introducing circular packaging and extended producer responsibility models to reduce waste.
Food and agriculture: Reducing food waste and creating sustainable agricultural chains.
Textiles and fashion: Implementing sustainable value chains and recycling fabrics to reduce landfill pressures.
SMEs and innovation: Both contexts highlight smaller businesses as vital enablers of new business models and technological adoption

Building on these shared priorities, several European companies are already active in Saudi Arabia’s emerging circular economy landscape, forging partnerships and pilot projects that translate policy commitments into on-the-ground solutions.

In 2024, Aramco and DHL Supply Chain established a joint venture, ASMO (Advanced Supply Management Operations), a new Procurement and Logistics Services Hub in Saudi Arabia. ASMO promotes circular economy practices by advancing sustainable supply chain models that optimize resource use, reduce waste, and improve efficiency across procurement, logistics, and inventory operations. The venture focuses on lowering carbon emissions, integrating advanced digital technologies such as AI and blockchain, and supporting Saudi Vision 2030’s goal of building a global logistics hub. There are several such examples that have emerged over recent years and continue to develop. These illustrate how combining the EU’s experience and market innovations with Saudi Arabia’s Vision 2030 and the Saudi Green Initiative can accelerate sustainable development, reduce environmental impact, and create economic opportunities within the circular economy.