The global economy loses an estimated €25.4 trillion a year to waste, inefficiency and premature obsolescence, according to the Circularity Gap Report 2026 published by Circle Economy, the Amsterdam-based impact organisation, in collaboration with Deloitte Netherlands. That is roughly 31 per cent of global GDP. Circle Economy calls it the "Value Gap" - economic value that is destroyed, discarded or never recovered because materials and products are not kept in use.

Since 2018 the Circularity Gap Report has tracked a single headline metric: the share of materials cycling back through the global economy. That figure stood at 6.9 per cent in the most recent measurement, meaning more than 93 per cent of materials entering the economy came from virgin sources. This year's edition, launched on 16 April, keeps that baseline but adds an economic dimension. For the first time, it attempts to put a price on what a take-make-dispose economy costs.

The €25.4 trillion estimate (plus or minus €4.7 trillion, against a global GDP of €82.6 trillion) is split across five pathways. The largest is end-of-life waste at €10.0 trillion. This covers the residual value of products and materials thrown away when assets such as buildings, vehicles and machinery are retired, plus the cost of treating them and the unpriced environmental damage they cause. Energy losses are the second largest at €8.7 trillion, mostly from inefficient generation, transmission and industrial processes. Then comes the depreciation of buildings, infrastructure and equipment through wear, obsolescence and accidental damage, at €5.2 trillion.

The two remaining pathways are smaller. Processing losses - value destroyed during manufacturing through inefficient conversion of raw materials - total €904.2 billion. Food losses and waste account for €650.7 billion, with food lost during production and supply (€594.6 billion) far outweighing waste at the retail and consumer end (€56.1 billion).

Where and why

Looked at by value chain stage, the use phase and downstream each account for roughly €10 trillion, while upstream losses total €5.3 trillion. Downstream, the problem is premature retirement: products and infrastructure scrapped before their technical life is exhausted. During the use phase, it is deterioration of fixed assets and energy inefficiency.

Why does the value get lost? The report identifies four mechanisms. The biggest, at 30 per cent of total losses (€7.5 trillion), is shadow costs - the environmental and social externalities that market prices do not reflect, such as pollution and resource depletion. Premature obsolescence of long-lived assets accounts for 26 per cent (€6.5 trillion), driven more by behavioural and market dynamics than by genuine technical failure. Mismanagement of products and materials through poor technology or infrastructure makes up 24 per cent (€6.2 trillion), and wear and tear on long-lived assets the remaining 20 per cent (€5.2 trillion).

Circle Economy is upfront about what the numbers do not capture. The methodology is a first attempt, and the results are described as "indicative potential rather than net-of-cost outcomes." The estimates do not deduct whatever investment or operational spending would be needed to recover the value identified. Services are excluded from the value-loss calculations but included in the GDP baseline, which makes the Value Gap as a share of GDP conservative by design. Wider economic effects such as price changes, trade shifts and employment impacts are not modelled.

The Value Gap is intended to sit alongside, not replace, the existing Circularity Metric. Where the 6.9 per cent figure measures material throughput, the Value Gap measures economic consequence. The point is to make the case for circularity in the language that treasury officials, investors and central bankers actually use.

What Circle Economy wants done about it

On the business side, the report calls for companies to map value losses across their supply chains and test circular business models such as product-as-a-service, material leasing and take-back schemes. For lenders and investors, it argues that repairability, durability and recoverability should feed into credit and collateral assessments. European mortgage lenders already differentiate pricing based on a building's energy performance, the report notes, and the same logic could apply to material assets.

Fourteen countries and regions have begun setting material use targets, and the report holds these up as a policy direction worth watching. It also points to the UK's Plastic Packaging Tax, which imposes no additional charge when products meet minimum recycled content requirements, as an example of how tax systems can be structured around value retention rather than revenue alone.

The Value Gap will face scrutiny. The uncertainty ranges are wide, the methodology is young, and a single global figure does not tell a waste manager in Leeds or a packaging engineer in Lyon what to do differently on Monday morning. But as a framing exercise it gives the circular economy a number that fits into macroeconomic conversations where environmental metrics alone have not cut through. Whether €25.4 trillion is precisely right matters less than whether the order of magnitude shifts the argument.