£22.1 trillion lost to ineffic

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Circular Economy, Resource Management, Sustainability

The Circularity Gap Report 2026, produced by Circle Economy in collaboration with Deloitte Netherlands, found that the global economy loses £22.1 trillion each year due to wasteful patterns of production and consumption.

The report examines ‘avoidable value losses’ in the global economy. According to the analysis, the initial estimate of these losses equals 31% of global gross domestic product (GDP).

Losses include material and product mismanagement, as well as environmental and social costs that are unaccounted for in the linear economy.

The report found that almost half of global value loss, which is around £8.7 trillion, occurs when products and materials are discarded too soon and then neither reused nor recycled.

The second-largest area in which value is lost is energy, totalling approximately £7.6 trillion. Circle Economy found that around two-thirds of primary energy, such as fossil fuels, is never used for heating, transportation, or electricity, and is instead lost mostly as heat during combustion or due to inadequate building insulation.

An estimated £4.5 trillion is lost when buildings, machinery and infrastructure deteriorate faster than normal due to underuse, poor maintenance and obsolescence.

Finally, approximately £787 billion is lost during the production of goods due to inefficiencies, defects, and reduced yields, while an estimated £567 billion is attributed to food losses and waste.

Commenting on the report, Alvaro Conde, Circle Economy’s CGR Lead and the report’s lead author, said: “Most of this value loss is not marginal or accidental but structural and systemic.”

“Today’s economy is geared towards maximising economic output at whatever cost to people and planet. The results? Ever-increasing resource extraction, asset underutilisation and waste generation.”

The report argues that circular strategies keep value in the economy where the current linear model does not.

“To close the Value Gap, we need to shift attention from volume and throughput towards outcomes: prioritising wellbeing within planetary boundaries. Rethinking how materials are managed is at the heart of achieving this,” Alvaro Conde said.

Tagged Circle Economy, Circular Economy