Energy-Intensive Industries: the Power of the Circular Economy

Decarbonising energy-intensive industries is one of the most complex challenges of Europe’s green transition. But, as a new study by the Joint Research Centre (JRC) of the European Commission explains, the key is not only switching to cleaner energy sources: it is rethinking materials.


The report “Capturing the potential of the circular economy transition in energy-intensive industries” (2025) shows that a circular approach can almost double greenhouse gas reductions by 2050 compared to a strategy based solely on energy decarbonisation.

Circular economy and decarbonisation: two pathways that reinforce each other

A circular economy in energy-intensive sectors such as steel, aluminium, cement and plastics could deliver up to 230 million tonnes of CO₂ savings per year by 2050.


Circular strategies based on reduction, reuse and recovery not only cut emissions but also reduce Europe’s dependency on imported raw materials and fossil fuels.


According to the study: −8.7% coal consumption,−7% natural gas and +€30 billion in the EU trade balance.

A win for the environment, the economy and Europe’s strategic autonomy.

The three pillars of industrial circularity

The JRC report identifies three core pillars:


– Reduce – optimise processes and decrease demand for primary materials;

– Reuse – extend the lifespan of products and components;

– Recover – maximise both the quantity and quality of recycling.


When combined, these strategies make industrial systems more efficient and resilient.

Examples from four sectors: four laboratories of transition

1. Steel: improving scrap quality and designing for recycling

With more than 120 million tonnes produced annually, steel is a backbone of European industry and a major source of emissions.
The most effective strategies to reduce its impact are improving scrap metal quality and designing products that can be easily dismantled.

Good practice examples:

– lightweight steels for construction and transport;

– vehicle dismantling systems that preserve alloy purity;

– electric arc furnaces powered by high-quality scrap, such as HYBRIT (Sweden) and Salzgitter SALCOS (Germany), which combine green hydrogen with circular practices.


2. Aluminium: recovering better, producing less

Aluminium is already highly recycled, yet extremely energy-intensive when produced from primary sources.
According to the JRC, a 5% improvement in production efficiency and a reduction of pre-consumer scrap could significantly cut energy use and emissions.

Good practice examples:
– regional recycling hubs for controlled remelting;

– advanced alloy-sorting systems using optical sensors;

– modular design that facilitates component reuse.

For a cross-sectoral comparison, see our related article “Certified biodegradable do they really work?”


3. Cement and concrete: the rise of recycled “cement fines”

Cement accounts for roughly 8% of global CO₂ emissions.
Using supplementary cementitious materials (SCMs) and recovering cement fines from demolished concrete represents a major innovation frontier.

Good practice examples:

– selective demolition with detailed material audits;

– collaboration between construction firms and Construction & Demolition Waste (CDW) facilities;

– clinker substitution with calcined clays or industrial by-products.

These practices are closely linked to the principles of a circular bioeconomy, where residual materials become new resources.


4. Plastics: from fossil dependency to advanced recycling

With a potential of 84 million tonnes of CO₂ savings per year, plastics offer the largest margin for improvement.

The study highlights four priorities:

1. Reduce the use of virgin plastics;

2. Design for recycling, removing additives and complex multilayers;

3. Develop chemical recycling for polymers currently unrecyclable mechanically;

4. Introduce incineration taxes and incentives for recycled content.

These measures decrease fossil fuel dependency and strengthen Europe’s strategic autonomy in material supply.

Policies enabling the circular transition

The JRC identifies seven key levers to accelerate industrial circularity:

1. Economic incentives and taxes on virgin raw materials;

2. Green Public Procurement to create demand for recycled products;

3. Investment in research and innovation;

4. Ecodesign requirements and digital product passports;

5. Extended Producer Responsibility (EPR);

6. Performance-based standards for innovative materials;

7. Cross-value-chain partnerships and awareness.

Beyond decarbonisation: a more resilient economy

The JRC’s conclusion is clear: circularity can nearly double emission-reduction outcomes compared to energy decarbonisation alone.

But there is more.
Circular strategies increase industrial resilience, reduce dependence on external suppliers and create local value.


For every euro invested, circularity delivers up to 26 times more environmental benefits compared to traditional linear approaches.
It is a smarter economy — one that combines sustainability, competitiveness and strategic independence.

TONDO’s perspective

For TONDO, which works every day on circular innovation and system-wide solutions, the JRC report is an important confirmation: the energy transition is not enough without a material transition.


Energy-intensive industries can become drivers of Europe’s new circular economy if they embrace models based on efficiency, design for reuse and high-quality recycling.
Circularity is not just a technical fix, it is a strategic choice for a more autonomous, sustainable and prosperous Europe.

Francesco Castellano

Francesco Castellano is a seasoned business leader and strategist with over 20 years of experience spanning research, finance, consulting, and entrepreneurship. He has held impactful roles, including serving as a consultant at Bain & Company, launching Uber operations in Turin, and working as Managing Director of a Swiss start-up. In recent years, Francesco Castellano founded Tondo, a hub of... Read more

Francesco Castellano is a seasoned business leader and strategist with over 20 years of experience spanning research, finance, consulting, and entrepreneurship. He has held impactful roles, including serving as a consultant at Bain & Company, launching Uber operations in Turin, and working as Managing Director of a Swiss start-up.

In recent years, Francesco Castellano founded Tondo, a hub of organizations dedicated to promoting Circular Economy approaches and supporting companies in transitioning to sustainable and circular practices. He is also the ideator and coordinator of the Re-think Circular Economy Forum, a high-profile event held across Italy to showcase innovative Circular Economy solutions.

Francesco Castellano collaborates with European institutions, serving as an expert for the European Commission’s Circular Cities and Regions Initiative and mentoring startups in the European Institute of Innovation and Technology’s (EIT) New European Bauhaus Booster Program. Through these roles, he actively supports the development and scaling of circular economy ventures across Europe.

He is also a sought-after speaker and lecturer, sharing his expertise on Circular Economy, Innovation, and Entrepreneurship at universities and international events. Francesco holds executive education certificates from prestigious institutions such as MIT, Harvard, and the University of Virginia, further solidifying his credentials in strategy, sustainability, and innovation.

Fluent in Italian, English, and Spanish, Francesco Castellano combines his diverse skill set with a passion for Circular Economy, Cleantech Innovations, and Entrepreneurship. His strong background in Corporate Strategy, Sustainability, Innovation Development, and Finance enables him to drive impactful change in every initiative he undertakes.

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