How to Promote Public and Private Investments in Circular Economy

Author: Pirkko Eteläaho, Business Tampere

Advancing the circular economy requires a strategic and coordinated approach that brings together funding, innovation, and collaboration. Based on a study conducted within the TREASoURcE project, this article presents the essential tools and partnerships needed for circular economy projects to deliver meaningful environmental and economic benefits across Europe.

European Investment Bank has calculated that yet today, less than 10% of global economic activity is circular. This long-term process involves not only financial planning but also strong stakeholder engagement, practical implementation, and continuous knowledge sharing.

The Most Important Requirements for Success

Circular economy projects offer clear benefits: they reduce waste, create jobs, and promote sustainability. However, cultural attitudes and lifestyle habits can influence how easily these projects are adopted. The environmental benefits are equally strong, including lower CO₂ emissions, better use of resources, and less reliance on landfills.

Strong governance models, such as open decision-making processes and multi-stakeholder platforms, help ensure smooth implementation and a supportive legislative framework is key to making the circular economy work in practice. EU programs and national policies can encourage investments by making permits easier to obtain and by offering incentives for green projects, which helps speed up adoption. Tools like digital platforms, recycling systems, and life cycle assessments can be very useful, especially when they are adapted to local needs.

Successful projects usually combine both public and private funding, and it is important to check the local business potential to ensure feasibility. Collaboration is essential, bringing together public authorities, private investors, NGOs, citizens, and technology providers. Preparing a project usually takes several months, and the time needed for stakeholder negotiations will depend on its complexity. To carry out the work effectively, teams should include expertise in finance, sustainability, and stakeholder engagement.

Promoting Circular Economy Investments

To replicate the concept of promoting public and private CE investments, follow these essential steps:

1. Identify and Secure Funding

Begin by researching and applying for relevant funding opportunities. Build a comprehensive funding strategy that includes a mix of public and private sources. Public funding options include Horizon Europe, LIFE Programme, Interreg Europe, ESIF, and national grants. Private funding can be sourced from i.e. venture capital firms, private equity, green bonds, and corporate sustainability programs.

2. Engage and Collaborate

Foster collaboration through workshops, seminars, and public outreach activities. Strong stakeholder engagement is key to building efficient investment pipelines. Include public authorities, businesses, NGOs, and citizens to ensure broad support and co-creation.

3. Showcase and Replicate

Highlight successful projects such as second-life battery storage, recycling trailers, rigid plastics collection, e-marketplaces, and biogas plants. Provide clear replication guidelines to support transferability across regions and sectors.

4. Utilize Life Cycle Assessments (LCA)

Conduct thorough LCAs to demonstrate the environmental, social, and economic benefits of circular economy projects. This evidence is crucial for attracting both public and private investment.

5. Develop Business Models

Create sustainable business models that ensure long-term success and scalability. Consider innovative financing models like Public-Private Partnerships (PPPs), crowdfunding, and investment readiness programs.