Circularity Policy Interventions in One Sector Can Reduce Circularity in Others

Circular economy (CE) policies, such as recycled content standards, target closed-loop circularity and sustainable development. However, few prospective assessments of their impact exist, and it is unclear how circularity policy interventions in one sector may affect circularity in another sector. Here, we assess conditions for increasing closed-loop steel circularity with a newly developed sector-coupled dynamic material flow analysis model of the automotive and building sectors in the EU. We show that improving the scrap quality from end-of-life vehicles is essential to increasing automotive closed-loop circularity until 2050. This improvement inhibits scrap flows to the building sector, reducing its open-loop circularity potential, but alleviates the risk of low-quality, potentially unusable scrap surpluses. Navigating these trade-offs means that CE policy interventions must consider circularity not only within but also across sectors. Overall, all sectors must contribute to preserving the value of materials over multiple life cycles. Beyond insights for policymakers, we provide guidance for industry to increase product circularity and for academia to consider systemic effects in scientific methods.