Fine-Tuning Defence Circularity The European Union’s Next Phase of Circular Economy Policy Reform

1. Introduction

In a context marked by political polarisation and intensified competition for critical raw materials, circular economy policies are becoming embedded in broader strategies of economic defence and sovereignty. This indicates that material dependency is becoming a vulnerability and a structural security risk for the European Union (EU). This reconfiguration is particularly relevant for strategically sensitive sectors such as defence, where military-industrial systems rely heavily on complex and globally distributed supply chains involving critical minerals, advanced composites, and dual-use technologies.

At the same time, the defence sector faces increasing expectations to contribute to sustainability objectives without compromising its readiness and technological superiority. Circular economy principles – such as remanufacturing, component reuse, modular design, and advanced materials recovery – therefore represent an opportunity and a challenge. On the one hand, they can strengthen supply-chain resilience and reduce resource dependencies. On the other, their implementation must be balanced against the defence sector’s stringent requirements for reliability and mission effectiveness. This “tension” between advancing circularity and maintaining defence capabilities constitutes the analytical core of this policy analysis.

The EU is frequently characterised as a “regulatory giant”1 due to its capacity to shape international standards through regulations. However, critics argue it struggles to move past small experiments towards true military self-sufficiency.2,3,4 Today’s global supply chains are deeply interwoven. Because of this, we must ask an important question: is total self-sufficiency even possible? More importantly, is it truly what the EU wants? An alternative view is also emerging: the EU should not try to eliminate dependency entirely. Instead, it should manage dependency by building resilient systems with trusted partners. In this setup, circularity helps control these dependencies. It ensures the whole system is stronger than its individual parts, which thus prevents small chain-reaction failures from turning into major security crises.

Against this background, there is a need for policy analyses that move beyond established assumptions and instead critically examine the trade-offs, opportunities, and limitations associated with integrating circular economy principles into the defence sector. Instead of advocating predetermined policy solutions, policy analyses should stimulate debate, challenge prevailing narratives, and broaden the conceptual space within which European defence and industrial policies are developed. This is the objective of the present contribution.

1.1 Structure and Key Questions

Although the idea has received political attention, integrating the circular economy into defence remains largely experimental. Most initiatives are confined to small pilot projects or isolated national practices, with very little coordination at the EU level. This fragmentation limits growth. It prevents the creation of a unified circular defence system that can deliver a real, systemic impact. This problem reveals a deeper governance gap within the EU. Right now, three crucial areas – industrial policy, environmental regulation, and defence planning – are not sufficiently integrated.

This policy analysis argues that, to fix this situation, circularity must be explicitly built into EU defence buying contracts (procurement) and member states’ military development plans. We propose establishing a dedicated Circular Defence Hub. This hub would coordinate efforts and share knowledge across Member States to ensure that circular practices can scale up smoothly. Finally, we argue that circular economy principles must be woven into major strategic defence plans, including the Strategic Compass, as this would ensure that Europe’s environmental goals align perfectly with its security objectives.

Our arguments are built around four key questions:

1. The Strategic Shift: How is the transition to a circular economy changing the European defence industry from a “green” framework into a security-driven strategy?
2. The Vulnerabilities: How severely do foreign dependencies on critical raw materials and fragile supply chains expose weaknesses in European defence?
3. The Implementation Gap: Why is there such a huge gap between the EU’s big circular ambitions and actual practice in the defence sector, and what causes this national fragmentation?
4. The Governance Solution: What political mechanisms are required to make circularity work at a massive, continent-wide scale?

By answering these questions, this analysis provides clear, actionable guidance for decision-makers, scholars, and policymakers. To evaluate these issues, this paper uses the well-known 9R circular economy framework as its main analytical tool.

The remainder of this analysis is organised into the following steps. It begins by examining how the circular economy is evolving into a tool for European autonomy and security. Next, it analyses the dangers of relying on external critical raw materials. It then explores the real-world opportunities and limits of using circular principles in the military, backed by specific European case studies. Building on these findings, the paper identifies the main roadblocks to large-scale adoption and discusses the governance needed to unite the different Member States. It concludes with a set of policy recommendations and future research paths designed to make circularity a core pillar of European defence.

2. The Political Architecture of the European Circular Economy

The EU is fine-tuning its circular economy strategy by introducing new policies to accelerate the transition away from the linear “take-make-dispose” model. The EU’s circularity rate was 11.8% in 2023 and 12.2% in 2024,5 a figure which shows the need for further progress. However, across the EU, circularity is now increasingly viewed as a geoeconomic and defence instrument capable of reinforcing Europe’s autonomy in the face of resource scarcity.

Key EU initiatives – which include the upcoming Circular Economy Act (CEA)6 and the Critical Raw Materials Act (CRMA)7 – are designed to create a single market for secondary raw materials and stimulate demand for recycled materials. The CEA complements stricter waste reduction targets, new durability and repairability standards under the Right-to-Repair Directive, and enhanced sustainability frameworks in high-impact sectors such as textiles, electronics, and plastics. In parallel, it introduces enabling mechanisms such as digital product passports and enhanced sustainability labelling, which are intended to increase transparency and traceability across complex value chains. The CRMA complements this approach by setting binding benchmarks for domestic extraction, processing, and recycling capacity, explicitly linking circularity to strategic autonomy in critical sectors. Importantly, circularity is being reframed within EU policy discourse as a sustainability objective, but also as a geoeconomic and security instrument.

The Circular Economy itself represents a change from a linear economy towards a regenerative framework. This is the reason why the EU’s circular economy agenda has evolved progressively since the adoption of the Circular Economy Action Plan in 2015, which introduced a comprehensive legislative package on waste management, recycling, and product lifecycles. This was reinforced by the European Green Deal and the 2020 Circular Economy Action Plan, which shifted the policy focus towards sustainable product design and industrial competitiveness.

Building on this foundation, the EU has since adopted ambitious legislative measures, including the Right-to-Repair Directive (EU 2024/1799), which strengthened Extended Producer Responsibility (EPR) schemes, and higher recycling targets across multiple industries. Specifically, the EU has set legally binding targets to increase the preparing for reuse and recycling of municipal waste to a minimum of 55% by 2025, 60% by 2030, and 65% by 2035 (by weight). The forthcoming CEA marks the next phase of this evolution by seeking to establish a genuine single market for secondary raw materials through harmonised standards and stronger demand for recycled materials. As noted above, a central pillar of the initiative is improving transparency across value chains through digital product passports and sustainability labelling. These strategies are intended to fine-tune circular economy governance; they move from fragmented initiatives to a coherent architecture and are aligned with the European Green Deal8 and the Net-Zero Industry Act.9

Beyond the forthcoming CEA, the EU’s circular transition is also being reinforced through a broader policy ecosystem that is expanding its regulatory scope. Central to this is the Ecodesign for Sustainable Products Regulation (ESPR),10 which would enlarge eco-design requirements far beyond energy-related products to include durability, reparability, recyclability, and mandatory incorporation of recycled content. In a complementary way, the Waste Framework Directive is also continuing to evolve as it relates to waste hierarchies and reinforces separate collection obligations, particularly for textiles and bio-waste. In parallel, sector-specific instruments are accelerating circularity in high-impact industries. For instance, the EU Batteries Regulation introduces strict sustainability and recycling requirements across the battery lifecycle. At the same time, the Packaging and Packaging Waste Regulation (PPWR)11 is drastically reducing packaging waste through reuse targets. The Construction Products Regulation is currently under revision to embed circular principles into one of the EU’s most resource-intensive sectors.

Taken together, these initiatives signal a change in the EU’s approach as it moves from managing waste at the end of the lifecycle to a way that governs resources across their entire value chain.

The characterisation of the EU as a “regulatory giant” needs to be further discussed, as the current trajectory shows a deeper structural change. This means that the EU is implementing reforming incentives and aligning industrial policy with sustainable development goals (SDGs), and SDG 9 (Industry, Innovation and Infrastructure) and SDG 12 (Responsible Consumption and Production) in particular. In practical terms, the regulatory and market-based instruments are increasingly designed to steer production and consumption systems towards circular outcomes. At the same time, circularity is being embedded as a foundational principle of the Single Market through harmonised product standards. We therefore believe that the EU is heading towards a system where products are designed, used, and recovered within closed loops by default rather than exception.

The effectiveness of this transition will depend, however, less on the ambition of its targets than on their consistent implementation and uptake across Member States. The gaps are persistent, particularly in infrastructure provision and in asymmetric investment capacities. If these challenges are addressed, the EU’s circular economy agenda can evolve into a cornerstone of economic resilience and long-term competitiveness in a resource-constrained world. However, there is substantial work remaining to convert the EU policy ambition into tangible outcomes, and attention should be paid to the associated vulnerabilities.

3. Vulnerabilities: Hybrid and Geoeconomic Threats to the EU Circular Economy

While the EU is pursuing circularity, the war in Ukraine and, more recently in Iran, has also exposed dependencies on external suppliers for critical raw materials. For example, in 2020, over 98% of the EU’s rare earths imports came from the People’s Republic of China (PRC), and 78% of its lithium needs were sourced from Chile. At the same time, the global race for green technologies has intensified competition for rare earths, lithium, cobalt, and other strategic resources. These disruptions show the need for economic defence policies that are not only focused on diversifying and stockpiling. Circularity, by keeping materials in use for longer and valorising waste streams, reduces exposure to external shocks. It is therefore one of the core pillars of the EU’s broader strategy for open strategic sovereignty and industrial resilience. Taking that into consideration, the CRMA is currently boosting domestic capacity by setting targets to supply at least 10% of annual EU consumption through extraction and 15% through recycling by 2030.

The vulnerabilities are not focused on supply shortages alone. They are increasingly embedded in a broader spectrum of hybrid and geoeconomic competition, where control over resources is paramount. The issue is that refinement and processing of capabilities outside the EU are creating structural choke points. This asymmetry exposes mostly European industries – not least the defence sector itself. In this context, the supply chains are not neutral economic infrastructures: they are being a contested domain. As we know, disruptions take multiple forms, as they can range from export restrictions and price volatility to more indirect mechanisms, such as regulatory pressure. As one of the most critical sectors, supply chains are more complex for the defence-industrial base and often reliant on dual-use technologies. These risks have resulted in tangible constraints, such as delays in access to critical military areas, such as maintenance cycles and defence production timelines.

At the same time, the transition towards a circular economy also introduces a second layer of vulnerability. On the one hand, circularity reduces dependence on primary resources; but on the other hand, it increases reliance on internal systems for collection, sorting, recycling, and remanufacturing. These systems remain uneven across Member States, which is reflected in disparities in infrastructure and technological capacity in each Member State. The integration of secondary raw materials into high-performance applications, particularly regarding non-biological intelligence, are also raising challenges. The mention of artefacts of non-biological intelligence brings us to the broader spectrum of digitalisation that, in some circumstances, complicates the landscape. Tools such as the Digital Product Passports12 introduce new risks related to data security and, perhaps, industrial espionage as well. If the EU is betting their options on digitalisation, balancing transparency with security classification is a big challenge to the European Commission in sensitive topics such as defence. Given that digitalisation is probably unavoidable, the EU needs to strengthen its situational awareness and risk management frameworks to ensure that technological enablers of circularity do not become sources of vulnerability.

Despite these constraints, the vulnerabilities and opportunities are somewhat interconnected. The same dependencies that expose the EU to external shocks also create incentives for transformation. Circularity, in this context, should be understood as a potential source of advantage, as it helps to reduce material input requirements and extend product lifecycles to enable alternative and more secure supply streams. As we look at it, circularity practices are expected to enhance resilience and adaptability. However, without scalability for circular solutions, standardisation, and coordinated implementation across Member States, circular solutions will remain confined to a limited impact. Hence, addressing this gap is therefore essential if the EU is to transform circularity from a policy ambition into a credible instrument of economic resilience.

4. Opportunities: Circular Economy and Economic Security in the Defence-Industrial Base

In the defence-industrial domain, circularity has traditionally been associated with sustainability and readiness. Existing approaches include extending the lifecycle of military equipment, promoting additive manufacturing for spare parts, and revalorising defence waste streams that enhance autonomy and reduce logistical vulnerabilities. When circular principles are embedded in industrial policy and dual-use technologies, particularly in sectors such as batteries and composites, the EU defence production system can become more resilient and competitive. However, this path is not straightforward. The framework by Potting et al.,13 developed by the Netherlands Environmental Assessment Agency, is particularly relevant and reveals its complexity. The framework classifies circular actions into three target groups: (1) useful application of materials, (2) extension of product lifespan, and (3) smarter product use and manufacturing. Within these, the 9R hierarchy provides a structured taxonomy for assessing circularity levels across industries (Refuse–R0, Rethink–R1, Reduce–R2, Reuse–R3, Repair–R4, Refurbish–R5, Remanufacture–R6, Repurpose–R7, Recycle–R8, Recover–R9) (see Figure 1).

We adopted the 9R hierarchy as it directly informs the four questions that guide this policy analysis by providing a structured analytical framework for systematically assessing the role of circularity in the EU defence-industrial base. Throughout the analysis that we provide, the 9R hierarchy provides a comparative analytical lens for evaluating existing defence initiatives, identifying where value is preserved or lost across defence supply chains, and assessing the relative strategic contribution of different circular practices. This analytical perspective also addresses the case study section, where the framework is applied to real-world defence initiatives to evaluate their position within the circular economy hierarchy, identify implementation gaps, and assess their contribution to resilience and defence-industrial transformation.

This hierarchy is particularly relevant from a policy analysis perspective, because it introduces a differentiation between “high-value” and “low-value” circular interventions. In practical terms, strategies at the top of the hierarchy (R0–R2) (higher-order) tend to generate systemic impacts by addressing demand reduction and production efficiency at source, whereas lower-level strategies (R8–R9) (lower-order) largely operate at the end-of-life stage, focusing on material recovery and energy extraction with comparatively limited value retention. The mid-order (R3–R7) focuses on extending the lifespan of products and parts (e.g. repair). Overall, higher-order strategies prioritise value retention by preventing waste at the source, whereas lower-level strategies focus on recycling and are typically treated as a last resort when higher-value options are technically or economically unfeasible.

This distinction is critical for defence-industrial policy, where material scarcity and autonomy intersect. In high-performance systems, such as military avionics and sensor-based platforms, the policy objective is to reduce waste but also to preserve its functional integrity, reliability, and interoperability across extended lifecycles. As a result, higher-order circular strategies are significantly more relevant for defence applications than end-of-pipe solutions, which often fail to meet the technical or security standards required in operational environments.

The 9R framework also allows policymakers to move from generic circular economy targets and towards differentiated policy instruments. For instance, procurement regulations are currently be aligned with specific R-levels, prioritising design-for-reuse (R3), modularity (R1), and remanufacturing capacity (R6) in defence contracts. Similarly, industrial policy can be adjusted to incentivise investment in capabilities that sit higher in the hierarchy, such as advanced repair ecosystems or digital maintenance platforms (e.g. digital twins). This introduces a more granular governance approach in which circularity is treated as a binary objective and a spectrum of strategic choices with varying implications for resilience. Importantly, the framework exposes a structural gap in current EU practice – that is, most circular initiatives remain concentrated in mid-tier strategies (R3–R6), while systemic redesign (R1) and industrial-scale recycling integration (R8–R9) are still underdeveloped in defence contexts.

The imbalance being discussed here suggests that circularity is being applied primarily as an efficiency and cost-reduction tool rather than as a fully integrated security and industrial strategy. From a policy standpoint, this has two implications. First, it highlights the need to better align circular economy objectives with defence procurement rules, which remain heavily optimised for performance and risk aversion. Second, it shows the importance of building enabling infrastructure, such as certification systems and material traceability frameworks that can turn on higher-order circular strategies in operational practice, without, of course, compromising security requirements.

Looking ahead, the 9R hierarchy provides a useful analytical framework for examining the implementation of circular economy principles within defence supply chains. It enables researchers and policymakers to identify where circular interventions are concentrated, where value leakage occurs, and which strategies remain underutilised. The cases discussed in this study illustrate the practical application of the framework across different contexts. As such, the 9R hierarchy may offer a structured basis for assessing the EU’s progress towards a more coherent and security-oriented circular defence ecosystem.

5. Case Studies: Defence Circularity in Practice

The 9R framework developed by Potting et al. is a suitable analytical tool for analysing military circularity. Instead of treating all circular initiatives as equally effective, this model makes it possible to rank circular strategies based on how well they preserve the value, functionality, and usefulness of equipment over its lifespan. The 9R hierarchy sets a clear order of priority, as it separates high-level preventive strategies from basic, end-of-life material recycling. This distinction is vital for the military. For defence systems, keeping weapons and vehicles fully operational is always far more important than simply recovering scraps of raw materials.

Applying the Potting et al. model to defence materials, Reis et al.14 analysed the EU Battle Dress Uniform (BDU) supply chain and found no initiatives aligned with the lower-order strategies (R8–R9). Instead, they identified five strategies (two higher-order and three mid-order) within the second target group (Table 1). For example, under R7 (repurpose), some EU armed forces reuse camouflage fabric from decommissioned BDUs to produce Ghillie sniper suits. Under R6 (remanufacture), the Dutch Ministry of Defence, through its central procurement entity (NL KPU), operates a system for collecting and reprocessing discarded uniforms for reintegration into the supply chain. According to the European Defence Agency (EDA), this initiative generates annual financial savings and revenue while reducing CO₂ emissions and improving supply predictability.

At the R3 (reuse) and R4 (repair) levels, several Member States are demonstrating that they are embedded in circular practices. Portugal, for instance, prepares field repair kits for deployed forces, thus enabling in-theatre maintenance and reducing replacement demand during operations. In parallel, the Portuguese surplus BDUs are periodically redistributed to partner countries, particularly within the Community of Portuguese-Speaking Countries, thus extending material lifecycles, while also supporting defence cooperation and capacity-building objectives. Germany’s Bundeswehr, meanwhile, maintains centralised repair and refurbishment systems that optimise equipment availability and extend lifecycle performance across multiple deployment cycles. Table 1 shows the circular economy in defence materials through the case of the EU’s BDU.

 

Table 1. General overview of CE in Defence Materials and its Benefits: The Case of EU’s Battle Dress Uniform
R-Level	Strategy	EU Member States/Projects	Outcome/Quantification
R1	R1 (Rethink)	Innovative projects like VESTLIFE (modular bulletproof) and STRESSENSE (biosensor textiles for stress monitoring)	Innovation and human-system integration Future operational advantage
R2	R2 (Reduce)	Designing more durable uniforms	Less material use Lower lifecycle costs
R3 to R7	R3 (Reuse)	Surplus BDU’s are also donated to partner countries	Extends product life Supports defence cooperation Improves availability
	R4 (Repair)	Field repair kits for Portugese forces and centralized repair systems in the German armed forces	Improves readiness Reduces replacements Cost savings
	R5 (Refurbish)	Refurbishment of German worn uniforms and components to extend service life	Restores performance Extends service cycles
	R6 (Remanufacture)	The Dutch Ministry of Defence’s (NL KPU) systematic collection and reprocessing of discarded uniforms	€750,000 annual revenue €500,000 saved in destruction costs 14,500 tons CO2 avoided per year Improves supply predictability
	R7 (Repurpose)	Reuse of camouflage materials from obsolete BDUs to craft Ghillie sniper suits.	Low- cost material valorisation Supports specialised capabilities
Note: The table summarises the application of the 9R circular economy framework to the EU Battle Dress Uniform (BDU) supply chain. The table maps circular economy strategies (R1–R9) to defence-related practices and associated benefits. Examples include innovation through smart and modular textiles (R1), design optimisation and durability improvements (R2), reuse and redistribution of surplus uniforms (R3), repair and maintenance programmes (R4), refurbishment and remanufacturing initiatives such as the Dutch military uniform programme (R6), and repurposing of materials into Ghillie suits (R7). No initiatives were identified for recycling (R8) or energy recovery (R9) (lower-order strategies). The reported benefits include reduced costs, extended equipment service life, lower CO₂ emissions, improved resource efficiency, greater supply chain resilience, and enhanced operational readiness.

At the level of R2 (reduce), circularity focuses on BDU design optimisation, which in the last mile resulted in reduced replacement frequency and increased durability. This R includes the gradual change towards modular textile systems and improved fabric resilience standards across procurement specifications. However, more advanced, but still limited examples of R1 (rethink), are emerging through innovation-driven projects that are moving beyond the incremental improvements, such as the VESTLIFE15 project, which explores modular protective systems that integrate chemical, biological, radiological, and nuclear detection capabilities. Another example is the STRESSENSE, which uses biosensor-enabled textiles capable of monitoring physiological stress markers in operational environments. These initiatives illustrate early-stage convergence between circular design principles and next-generation defence technologies, particularly in human-system integration.

Beyond the initial EU-focused R policies, additional national examples further illustrate how circularity is being operationalised across Europe. In Sweden, the Defence Materiel Administration (FMV)16 has progressively integrated lifecycle management principles into procurement and maintenance systems, with a strong emphasis on modularity and long service life. That is, the Swedish defence logistics is increasingly prioritising design-for-maintenance and forms of system interoperability that enable partial upgrading of equipment, rather than the normal full replacement cycles. This aligns primarily with R2–R5 strategies, particularly in land systems and cold-weather operational gear.

Norway presents a complementary case, where the defence logistics and sustainability strategies have increasingly incorporated circular economy principles under the Norwegian Defence Logistics Organisation (FLO).17 Given Norway’s operational environment and long supply lines, there is a strong emphasis on repairability, redundancy reduction, and localised maintenance capacity. Norwegian practices are particularly relevant in R3–R4 strategies, with increasing investment in repair infrastructure and lifecycle extension of cold-weather and naval equipment. From our analysis, Norway also demonstrates early integration of sustainability requirements into defence procurement frameworks, although still primarily driven by operational resilience rather than circular economy policy per se.

Taken together, these national cases show us that circular defence practices in Europe are not uniform across different institutional logics: efficiency-driven (Netherlands), logistics-driven (Germany and Portugal), innovation-driven (EU-level projects), and resilience-driven (Sweden and Norway). This diversity of circular defence in Europe confirms that circular practices are emerging in a largely uncoordinated way across Member States. Most initiatives operate below the system-transformative level (R1) and are rarely extended into industrial-scale circular ecosystems capable of integrating recycling, remanufacturing, and design optimisation into a single defence-wide framework.

This fragmentation highlights that significant progress is still required and that current initiatives remain uneven and uncoordinated across Member States. It also underscores the need for a more structured EU-level governance framework capable of consolidating, standardising, and scaling national practices into a coherent circular defence architecture.

6. Towards a Circular Defence Strategy for the European Union

The initiatives discussed in the previous section suggest promising developments; however, they should not be overstated. Most defence systems and equipment remain beyond the scope of the 9R framework. The assumption that the EU defence industry is already on track for a successful green transition is therefore premature. Further empirical research and cross-sectoral coordination are required to substantiate the integration of circular economy principles within European defence policy and production systems.

At present, circularity in defence is primarily driven by military/operational necessity (e.g. cost reduction, logistics resilience, and availability) and not so much by an integrated strategic doctrine. This distinction matters. Without a deliberate governance framework, the circular practices we mentioned above risk remaining isolated efficiency gains. In other words, the EU is experimenting with circularity in defence, but it has not yet institutionalised it.

Building on the above real-world examples, it is quite clear that the EU’s approach to the circular economy is gaining traction. What began for managing waste and promoting sustainability is now becoming a tool to protect Europe’s industries. Applying circular principles to industrial and defence systems is not just “going green”, it is building the foundations of a more resilient and self-sufficient EU. But this is patchy and remains limited by complex procurement rules and differences between member states. Overcoming these barriers will require coordinated effort, political commitment, and robust governance. Yet the potential is clear. Circularity is helping the EU to prepare for a world defined by resource competition and technological rivalry.

Fine-tuning defence circularity demonstrates how environmental objectives can serve strategic ones, creating a Europe that is cleaner, more innovative, and better prepared for a volatile, uncertain, complex, and ambiguous (VUCA) world. In this sense, circularity is becoming more than a policy choice; it is part of Europe’s identity.

7. Policy Recommendations and Future Research Directions

Before outlining the proposals, by policy recommendations we refer to actionable measures that can be implemented within existing institutional frameworks. These are designed to guide decision-makers and produce tangible outcomes. Future research directions, by contrast, are forward-looking priorities that identify areas requiring further development, experimentation, and sometimes conceptual refinement. They are less prescriptive and focused on shaping the long-term evolution of policy.

From our view, the EU should treat circularity as a political tool for economic and defence resilience. Priority should be given to operationalising the CEA and CRMA as security frameworks that enable a single market for secondary raw materials and safeguarding sensitive defence supply chains.

7.1 Short-Term Policy Recommendations

In the short term, Member States should integrate circularity (9R) into defence procurement by introducing lifecycle and reparability criteria, supporting remanufacturing pilots, and establishing a baseline Defence Circularity Index (DCI) to measure progress. Circularity can then be embedded in vulnerability assessments to identify where hybrid or supply chain disruptions can affect critical materials.

7.2 Medium-Term Policy Recommendations

In the medium term, the EU should establish a Circular Defence Hub (Figure 2) under the EDA to coordinate standards, testing, and certification for remanufactured or recycled components. This provides an opportunity to develop EU-wide standards for recycled defence materials and a secure layer for Digital Product Passports to enable traceability without compromising confidentiality. Moreover, the funding should flow from existing EU instruments, such as the Innovation Fund and the European Defence Fund, to projects that enhance lifecycle management, repair capabilities, and additive manufacturing within defence supply chains.

7.3 Long-Term Policy Recommendations

In the long term, circularity must become part of Europe’s strategic autonomy doctrine. The EU is expected to include circular principles in the Strategic Compass18 and Defence Industrial Strategy, linking them to resource security. On top of this, the distributed remanufacturing networks and advanced recycling for high-tech materials, like batteries and composites, are expected to strengthen Europe’s capacity to absorb shocks. Progress should be monitored through annual DCI reporting and circularity “stress tests” of critical supply chains.

Ultimately, fine-tuning defence circularity demands coherent governance, measurable targets, and the EU political commitment. Circularity is not only about reducing waste; it is mostly about reinforcing Europe’s sovereignty in an era of resource competition and technological rivalry. By turning circular economy policy into a defence and industrial strategy, the EU can secure a more resilient, autonomous, and future-ready defence sector.

7.4 Future Research Directions

Looking ahead, several research directions emerge from our analysis. Although circular economy research has expanded considerably, its application to defence remains fragmented, with limited integration of industrial systems and resource governance. Future research should therefore strengthen the conceptual and empirical foundations of defence circularity.

First, research should examine the implementation of the CEA19 and the CRMA.20 This could focus on how these frameworks can be transformed into enforceable mechanisms for defence supply chains. Without such integration, circularity is likely to remain peripheral to defence policy.

Second, governance at the EU level requires further investigation. A Circular Defence Hub, or comparable institutional mechanism, can improve coordination among the EDA, industry, research institutions, and national ministries of defence, thereby enhancing standardisation and interoperability.

Third, future work should develop robust measures of defence circularity. A DCI that incorporates stress tests of critical supply chains and security-related indicators such as supply continuity and material criticality may be able to provide a consistent framework for assessing resilience.21,22

Finally, research should address digital enablers, including Digital Product Passports and secure traceability systems. Their application in defence depends on balancing lifecycle transparency with security requirements through protected digital architectures.

Without greater integration of circular principles, the EU is likely to remain vulnerable to external dependencies and fragmented defence industrial capabilities, limiting resilience during geopolitical disruptions. The effectiveness of defence circularity will therefore depend less on new policy initiatives than on coherent implementation across existing instruments and industrial ecosystems. If achieved, circularity could evolve from an environmental objective into a core component of European security.

8. Conclusion

Part of our conclusion is that the EU’s transition towards a circular economy is no longer confined to an environmental or purely economic endeavour. As we see it, this transition is now increasingly evolving into a strategic-political paradigm shaped by geopolitical competition and the growing demands of defence preparedness. This analysis has shown that, while the EU has developed an increasingly sophisticated regulatory and policy architecture, the practical integration of circularity into the defence-industrial base remains limited, or at least fragmented. The gap between policy ambition and implementation persists, particularly in the absence of coordinated governance across Member States.

At the same time, the vulnerabilities exposed by external dependencies on critical raw materials and contested supply chains reinforce the need to embed circularity within the EU’s broader economic security framework. Circular practices offer a credible pathway for shielding Europe from external economic shocks. To maximise this defence, the EU must focus on the highest levels of the circular economy hierarchy. Instead of just recycling materials at the very end of their life, which recovers the least value, the military must prioritise smarter, high-level strategies. This means designing equipment that can be easily repaired, upgraded, and completely remanufactured. By keeping military products in use longer, Europe preserves the highest amount of strategic and technological value. However, until these circular principles are written directly into military buying contracts/procurement, their security impact will remain minimal.

The case studies we discussed here demonstrate that meaningful progress is already taking place at the national and project levels, but they also confirm that these efforts are not yet converging into a coherent European approach. This fragmentation risks diluting the value of circularity and prevents it from evolving into a system-level capability that can support the industrial competitiveness and the military/defence readiness. Our analysis shows that the EU must move past the experimental phase and make circularity an official policy. It needs to become a core rule built directly into defence planning and military development. To do this, Europe must fix the deep gaps between member states. Right now, unequal technology and infrastructure prevent circular solutions from being scaled up across the continent.

In practical terms, the next phase of EU policy reform will depend on the ability to operationalise existing instruments, such as the CEA and the CRMA, into enforceable and security-oriented mechanisms that directly builds defence supply chains. This requires clearer incentives and robust monitoring frameworks capable of linking circularity performance with defence outcomes. At the same time, the integration of digital enablers, including traceability systems and Digital Product Passports, must be carefully balanced with security considerations to avoid creating new vulnerabilities in sensitive industrial ecosystems.

Ultimately, fine-tuning defence circularity is all about redefining how the EU understands and uses its resource base in a context of geopolitical uncertainty. It requires making incremental efficiency gains, as the EU must move towards a transformation in which processes, people, and technologies are designed to operate within secure, resilient, and regenerative loops. If successfully implemented, circularity can then become a foundation for European green autonomy and strengthen its own sustainable goals, as well as the EU’s capacity to act, adapt, and compete in an increasingly contested global environment. Circularity is, and must be, a structural element of Europe’s long-term security and industrial strategy.

Based on this analysis, we can identify five key takeaways:

• First, we see that circularity must continue to be treated as a strategic (security) instrument. It should not be seen as an environmental policy that requires full integration into defence planning and capability development.
• Second, it is generally acknowledged that the EU’s current approach is fragmented, and without stronger central coordination, national initiatives will not scale into a coherent defence-wide capability.
• Third, higher-order circular strategies, such as redesign, remanufacturing, and modularity, offer the greatest value but are underdeveloped and underutilised.
• Fourth, dependencies on external critical raw materials will continue to pose systemic risks, unless circular solutions are operationalised at industrial scale.
• Finally, the success of defence circularity will depend on governance. That is, without measurable targets, dedicated institutions, and sustained political commitment, the transition will remain incomplete and symbolic.

The choice facing the EU is stark. The EU stands at a decisive inflection point where circularity must transition from narrative into hard-nosed geopolitical reality. Looking ahead, Europe’s credibility as a global actor will depend entirely on its ability to build resilient defence supply chains and sustain its military industry during times of crisis. If properly institutionalised into our defence, circularity will act as a force multiplier that allows military forces to remain effective even when global supply chains break down. Achieving this will require tough choices. It means trading open-market efficiency for strategic control, and balancing transparency with strict military security. But the rewards are immense.

By pioneering a circular defence-industrial model, the EU is not just protecting itself, it is setting the global standard at the junction of sustainability, technology, and security. In a resource-constrained world, true sovereignty belongs to those who control their own supply chains. If Europe fails to institutionalise defence circularity now, it will remain critically dependent on foreign competitors. If it succeeds, the Union will secure something far more valuable than raw materials: the autonomous power to act, adapt, and endure.

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Notes

1 Tarschys, D. (2003). Reinventing cohesion. The future of European structural policy. Swedish Institute for European Policy Studies. https://sieps.se/media/rmuh0fao/reinventing-cohesion_-the-future-of-european-structural-policy-2003_17.pdf

2 Fiott, D. (2015). European defence-industrial cooperation: From Keynes to Clausewitz. Global Affairs, 1(2), 159–167.

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