Equity fund puts $1.6T future value on EU recycling sector

An analysis and report issued by Stockholm-based Summa Equity predicts European Union circular markets could be worth 1.5 trillion euros ($1.64 trillion) by 2040. Summa says the combined recycling activity could save 650 million metric tons of CO₂ equivalent emissions per year.

Summa also says it has identified 230 billion euros ($252 billion) in investment needs by 2040 to go toward “new physical assets and infrastructure [to] enable the transition to a circular European economy.”

The 92-page report, “Investing in a circular and waste-free Europe,” was launched in mid-April in conjunction with a Harvard Business School event called “A trillion-dollar opportunity hiding in plain sight - the Circular Revolution.”

The “new asset base for the circular economy” identified by Summa includes investments in equipment, processing plants and what it calls supporting infrastructure. Such investments can generate attractive returns, according to Summa, with its analysis arriving at the $1.6 trillion valuation of circular markets by 2040.

“Progress is being made in several regards: The EU has set targets for waste reduction and recycling in key sectors, carbon prices are rising rapidly and companies are embracing circularity as part of their climate and sustainability strategies,” Summa says.

The report concludes that “an enormous recasting of European markets for materials, waste and physical products” is due by 2030. Circular business models in the EU, Summa says, could generate about $290 billion in revenue in 2030, representing 15 percent of the physical consumer goods market, and $493 billion in revenue by 2040.

“Our research and work explore the Theory of Change for achieving a waste-free and circular economy in Europe, which represents an enormous opportunity—a chance to recast the EU economy to sharply reduce waste, reduce emissions, become more self-sufficient, and maximize the value of the materials we use,” says Reynir Indahl, Summa Equity founder and managing partner.

Summa Equity Partner Bertrand Camus adds, “The circular economy provides Europe with a remarkable opportunity—the chance to build a revitalized, future-proof economy [that] will enhance the continent’s ability to reduce emissions and usher in a new era of industrial prosperity. As evidenced by the research, investment is required, but such outlays come with significant upsides and opportunity.”