European Banking Federation submits recommendations on the EU Circular Economy Act to unlock private finance

The European Banking Federation has published a response to the European Commission’s Circular Economy Act initiative, setting out recommendations aimed at making circular economy business models and projects bankable at scale. The proposals focus on correcting market failures to create robust business cases, embedding circularity into EU financing tools, supporting service-based models within the regulatory framework, and improving access to reliable data. The EBF calls for structural economic incentives, including through public procurement, alongside recycled-content standards and phasing out high-impact materials, to create sustained demand and a permanent level playing field. On finance, it recommends explicitly integrating durability, repairability and recyclability into eligibility criteria for EU public financing instruments and replicating initiatives such as the Hydrogen Bank through a potential “Bank for Circularity” that could provide off-take guarantees for recycled inputs and new technologies, supported by guarantees, other de-risking tools and scalable blended finance for higher-risk innovations with longer maturation periods. It also seeks a framework and data infrastructure that recognise circular leasing and “product-as-a-service” portfolios, and proposes incentivising voluntary reporting of simple metrics given the limited scope of the Corporate Sustainability Reporting Directive, complemented by member-state data sharing and searchable platforms to strengthen the ESG data ecosystem.