Keys insights:
Initial estimate of the Value Gap suggests it amounts to €25.4 trillion (± €4.7 trillion) in avoidable annual economic value lost to linear material use, equivalent to almost 31% of global GDP. This means that for every €3 of economic value created globally, around €1 is lost due to linear material use. These losses are avoidable and represent a significant opportunity for circularity to enhance value recovery and long- term value retention across economies.
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Circularity is fundamentally about reducing resource use and maximising resource value over time, not just recycling materials. Incremental optimisation is insufficient; addressing value loss requires systemic redesign of how materials are sourced, used, retained, and circulated across the economy.
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Existing economic metrics do not account for value loss to linearity. Conventional economic indicators such as GDP measure activity, not value retention or erosion, and therefore overlook resource depletion, waste, underutilisation, and stock depletion embedded in linear materials management. As a result, structural value loss remains largely invisible in economic decision-making.
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Reducing value loss can unlock trillions in economic value while strengthening resilience. By retaining materials at higher utility and preventing waste and underutilisation, economies can capture substantial economic gains while reducing environmental pressures, supply risks, and social externalities embedded in linear practices.
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The five pathways of value loss explored are processing losses, energy losses, food losses and waste, end-of-life waste, and premature deterioration of fixed capital. Targeting these pathways provides a comprehensive and actionable entry point for closing the Value Gap.
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Value loss is structural and systemic, not marginal inefficiency. Most economic value is not lost at the margins through isolated inefficiencies in how materials are managed, but through the fundamental design of today’s linear economy that locks in resource extraction, asset underutilisation, cost externalisation, and waste generation at scale.
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Closing the Value Gap requires coordinated action across value chains. No single actor can help address structural value loss alone. There is a significant opportunity for businesses, financiers, and policymakers to align innovation, investment, incentives, and regulation across value chains through standardised international frameworks such as the Global Circularity Protocol to shift from linear throughput maximisation to value retention at scale.
