Nearly a third of global economic value is being lost each year due to inefficient, linear patterns of production and consumption, according to a new report that reframes waste not just as an environmental issue, but as a massive economic inefficiency.
The Circularity Gap Report 2026, published by Circle Economy in collaboration with Deloitte Netherlands, estimates that €25.4 trillion (± €4.7 trillion) in value is lost annually – equivalent to around 31% of global GDP. The report argues that shifting to circular systems could help retain much of this lost value while improving resilience, productivity and sustainability across the global economy.
A structural “Value Gap” in the global economy
At the heart of the findings is the concept of a global “Value Gap”, used to describe the economic value lost through linear systems of resource use.
The analysis suggests that today’s dominant economic models prioritise throughput and short-term output, while failing to account for the long-term erosion of value through waste, underuse and depletion.
Where €25 trillion is being lost each year
Rather than a single source of inefficiency, the report identifies five main pathways through which value is lost globally:
- End-of-life waste
- Energy inefficiency
- Consumption of fixed capital
- Processing losses
- Food waste.
The largest share – around €10 trillion annually – comes from end-of-life waste, where products and materials are discarded prematurely instead of being reused, repaired or recycled.
Energy losses account for a further €8.7 trillion, including wasted energy from fossil fuel combustion, inefficient transmission, poor building insulation and industrial heat loss.
A further €5.2 trillion is lost through the premature deterioration of infrastructure, machinery and buildings, often driven by underuse, poor maintenance or early obsolescence.
Smaller but still significant losses include €904 billion from inefficiencies in production processes and €650 billion from food loss and waste across global supply chains.
Beyond environmental impact: the economic case for circularity
While circularity is often discussed in environmental terms, the report places stronger emphasis on its economic potential. It argues that circular systems are not just about reducing waste, but about improving how value is created and retained across economies.
Circle Economy notes that material use continues to rise globally, while resource productivity has remained largely stagnant over the past decade. Against this backdrop, circularity is positioned as a route to unlock efficiency gains that current linear systems are failing to deliver.
The report also highlights that conventional economic indicators such as GDP do not account for value loss, meaning the true scale of inefficiency is systematically underestimated.
A system designed for loss, not retention
The Value Gap is not the result of isolated inefficiencies but of a system designed around maximising output rather than retaining value over time.
This structural design leads to high levels of resource extraction, asset underuse and waste generation, all of which are embedded into global supply chains and production models.
“To close the Value Gap, we need to shift attention from volume and throughput towards outcomes: prioritising wellbeing within planetary boundaries,” said Conde. “Rethinking how materials are managed is at the heart of achieving this.”
Closing the Value Gap: a coordinated opportunity
The report concludes that closing the Value Gap will require coordinated action across industries, governments and financial systems. No single intervention is sufficient to address losses embedded across global value chains.
Instead, it calls for aligned policies, investment frameworks and business models that prioritise value retention over resource throughput.
Without such changes, rising global consumption is expected to continue driving both economic losses and environmental pressure. However, the analysis also stresses that a significant opportunity already exists: trillions of euros in value remain embedded in existing systems and could be recovered through more circular approaches.
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