Oman
Inside Sweden’s value gap
According to the CGR Sweden, only 3% of Sweden’s economy is circular, leaving a Circularity Gap of 97%. Our study complements this finding by introducing the concept of the Value Gap, which we estimate at 19%.
Unlike the Circularity Gap, which measures material flows, the Value Gap provides an economic lens on circularity by capturing the value that disappears through waste and end-of-life losses or is never created in the first place. This means that Sweden could generate and retain an additional 19% of economic value through circular solutions. In other words, out of the SEK 3.25 trillion created annually across the six key sectors studied, circular strategies could unlock roughly SEK 600 billion in additional value that is currently unrealised.
How we calculate the value gap
We calculate the Value Gap by summing all value that is lost or never created, then subtracting the value recovered at end-of-life through waste management. This figure is divided by the total value society actually captures, excluding overconsumption (see Figure two). A lower Value Gap signals that more value is retained through design, efficient systems, and circular strategies, while a higher Value Gap exposes systemic inefficiencies, waste, and lost opportunities for value creation.
Figure two shows the formula of value flows that make up Sweden’s Value Gap.
Mapping value across the chain
To understand where value is lost—or can be retained—we analyse flows across five stages of the value chain. Each stage represents a point where value is either created, lost, or recovered:
- Extraction: The sourcing of raw materials from nature through activities such as mining, drilling, agriculture, and forestry. Outputs include resources like timber, petroleum, and ores.
- Processing: The transformation of raw materials into usable inputs and finished goods, such as metal refining, cement production, and food processing. This also includes product assembly and construction.
- Distribution: The delivery and provision of goods and services to end users. This includes wholesale and retail trade, logistics, transport, and access to infrastructure and utilities—enabling sectors like housing, mobility, and consumer goods.
- Use: The phase where products and services are actively used by households, businesses, or public sector, also called consumption. This stage often involves wear, maintenance, and underutilisation.
- End-of-life: The stage after use, where products and materials are discarded and their value subsequently lost. At this stage, materials are recycled, downcycled, incinerated or landfilled.
This breakdown is a useful way to visualise how value moves through the economy, though in reality these flows overlap and interact across complex networks. What matters is that the Value Gap reveals where inefficiencies occur along the chain—and where circular strategies can intervene to preserve or create additional value.
Closing the value gap
By quantifying Sweden’s Value Gap, we can identify leverage points along the value chain where circularity can both improve resource efficiency and unlock economic gains. A circular economy aims to create more value with fewer resources, by minimising losses and maximising recovery across the system. Based on our analysis, we identify four strategic objectives:
- Maximise value capture upstream: Improve circularity at the early stages of the value chain—extraction, processing, and distribution—to increase the total value entering the system. More efficient production and smarter material use help reduce losses from the start.
- Minimise value losses downstream: Products often lose value prematurely due to inefficiencies in upstream processes. Extending product lifetimes through reuse, repair, and design for durability helps retain that value and prevent unnecessary losses.
- Maximise value recovery: Even in a well-designed system, some products reach end-of-life. Strategies such as recycling, refurbishment, anaerobic digestion, and composting ensure materials retain economic value beyond their first use.
- Align consumption with societal needs: Overconsumption adds to the Value Gap without improving well-being. Value must be directed toward fulfilling needs rather than fueling waste.
The Circularity Gap Report is an initiative of Circle Economy, an impact organisation dedicated to accelerating the transition to the circular economy.
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