In 2025, the circular economy has evolved from sustainability buzzword to a massive business opportunity, with construction alone poised to generate $122B from recycled concrete. Innovators are transforming waste streams into valuable resources through AI-driven systems, closed-loop design and policy-driven market shifts, rewriting the rules of consumption and production.
Written By: Neisan Massarrat, Head of Consulting at SecondMuse
The circular economy is a proving ground for innovation, resilience, and value creation. By 2050, global waste could swell to 3.8 billion tons annually, but the real story in 2025 isn’t just about managing that deluge—it’s about rethinking waste as a valuable resource. From collaborating with cross-sector stakeholders to shaping strategies with visionary governments, SecondMuse has seen firsthand how circular economy initiatives and innovations are building industry.
“At SecondMuse, we’ve worked with organizations committed to the circular economy at both the local and global levels. Last year, we partnered with COR Disposal & Recycling in Portland, Oregon and identified a number of high-impact opportunities to develop circularity around existing waste streams through multi-actor approaches. It was a true example of the value of co-creating opportunities in the circular economy space through stakeholder and market research, and identifying ways to deploy emerging technologies in the value chain.” – Todd Khozein, CEO of SecondMuse
The Forces Shaping a Circular Future
Three seismic shifts are propelling circularity in 2025.
Technology is Breaking Barriers
AI and robotics aren’t just sorting waste with near-perfect precision, streamlining efficiency and allowing for increased utilization of those waste streams. They’re also enabling modular product designs that can be altered to drive reuse. In construction, mobile crushing and CO2 curing transform demolished concrete into aggregates (which could create $122 billion by 2050), while IoT tracks supply chain flows to keep materials in play.
Regulation is Raising the Bar
Policies like Oregon’s Plastic Pollution and Recycling Modernization Act and California’s organic waste diversion mandates are pushing companies to design for durability and recyclability. Extended Producer Responsibility (EPR) regulations in states like California, Maine and Colorado are moving forward despite the current administration’s shift away from environmental initiatives, and regions like the EU are doubling down on green initiative commitments.
Consumer Expectations are Rewriting the Rules
Over two-thirds of shoppers, especially Gen Z and millennials, will pay more for circular products, whether it’s zero-waste fashion or packaging that composts cleanly. This demand forces brands to rethink supply chains, product blueprints, impactful storytelling, and marketing strategies–not just end-of-life plans.
Where the Opportunities Lie
Circularity thrives when product design, supply chains, and waste systems align. Here’s where 2025 is heating up:
Designing for Longevity and Loops
The push for durability and disassembly is reshaping products. Take apparel: Modular designs let fibers like cotton or recycled polyester cycle back into new garments. In electronics, companies are designing devices with swappable or up-cyclable parts—think batteries or screens—slashing e-waste. The resulting impact means lower material costs and a loyalty boost from repair-savvy consumers.
Supply Chains as Circular Engines
Smarter supply chains are closing the loop. Blockchain tracks materials from source to shelf, ensuring wood waste becomes particleboard or food scraps fuel the production of biogas (which has a 32% forecasted growth rate by 2028). Reverse logistics like take-back programs are surging, with most brands anticipating recommerce will generate >10% of their revenue within 5 years.
Food and Packaging Waste Reimagined
A third of the yields from global food production never reach plates, but the $134.7 billion food waste market is flipping the script. Anaerobic digestion churns out biogas and fertilizers, while upcycling schemes like processing brewery grains into flour gain traction. Upstream, AI-driven inventory tools and smart packaging can cut commercial losses by up to 20%, proving prevention is as potent as processing. Converting 20% of single-use packaging to reusable models globally could be a $10 billion opportunity.
Construction’s Circular Blueprint
The $212.7 billion construction and demolition market is a goldmine. Beyond recycled aggregates, mass timber, which is both sustainable and scalable, is rising, with over 2,300 U.S. projects underway. Supply chains are syncing with deconstruction policies like in Portland, Oregon to salvage wood and metals, feeding a demand for green building materials.
Bioplastics at the Crossroads
Set to soar from $9.5 billion to $73.5 billion by 2033, bioplastics are redefining packaging, the largest market segment for bioplastics at 45% of the market. Seaweed films and wood-derived cellulose are standout innovations, but success hinges on design. Products must compost cleanly without per- and polyfluoroalkyl substances (PFAS) risk, and supply chains must be able to secure biomass at scale.
Regional Barriers
While the trends are overwhelmingly positive, challenges undoubtedly still exist. SecondMuse’s work with City of Roses Disposal and Recycling in Portland, Oregon identified regional barriers and co-created strategy and solutions with ecosystem stakeholders.
“Barriers to Circular Innovation” graphic created for a research initiative with COR Disposal & Recycling, based in Portland, OR.
The Bigger Stakes
In 2025, the circular economy isn’t just about diverting waste; it’s about including circular principles at the core of product and service design, and creating tangible value for consumers and businesses. Companies that nail design and supply chain integration don’t just dodge disruptions; they define markets. Governments and philanthropists backing circular initiatives in cities like Portland, Cleveland and New York aren’t just supporting climate goals; they are creating new, good jobs.
_______
In addition to our work with COR Disposal & Recycling, SecondMuse administers the Scale For ClimateTech accelerator, supporting startups like EVTEK that connect people and businesses with local recycling centers through technologies.
Interested in partnering with SecondMuse to design, implement, or enhance circular economy work at your organization?
