CGR The Value Gap: Sweden
Recommendations
Conclusions
This analysis demonstrates that Sweden is missing out on substantial economic value by maintaining linear economic models and practices. Each year, nearly SEK 600 billion—equivalent to almost 57% of Sweden’s state expenses—is lost through inefficiencies and missed opportunities, leaving the overall Value Gap of the Swedish economy at 19%.
A key driver of this gap is the premature end-of-life of goods. Products worth SEK 420 billion are unnecessarily discarded every year, despite retaining functionality that could enable reuse, refurbishment, or recycling. Preventing these losses represents the single largest opportunity for value retention, with solutions spanning the entire value chain—from circular product design and extended use to repair, remanufacturing, and smarter resource management.
Overconsumption adds another layer to the challenge, amounting to SEK 200 billion annually. Aligning resource use more closely with human needs, rather than excess demand, will be essential for reducing waste and retaining value.
Much of Sweden’s economic value is generated in the least materially intensive stages of the economy. This misalignment between material intensity and value creation highlights one of the central barriers to advancing towards circularity: the sectors driving the most environmental impact often deliver the least direct economic return. Addressing this imbalance is crucial for building a more resource-efficient and resilient economy.
Yet, the Value Gap also represents a massive opportunity. The shift towards circular business models would not only contribute to several policy initiatives in Sweden, such as the Swedish climate policy goals [26] the Swedish environmental goals [27] and Agenda 2030 [28], but it would also enable companies and market players to tap into an undervalued market and unlock new forms of growth. These findings mark an important step in strengthening the economic and financial case for circularity in Sweden. Closing the Value Gap is not just an environmental imperative but also a major economic opportunity.
Call to action
Bringing together insights from both the CGR Sweden and the CGR The Value Gap: Sweden, we identify four priorities for the way forward:
1. Leverage data to inform circular solutions
This report represents the first analysis of an economy from a circular value perspective. In doing so, it has revealed several key needs to make future assessments more accurate, consistent, and actionable—specifically regarding nomenclature, data, and methods.
Nomenclature: A clear and shared terminology is essential for collecting, interpreting, and presenting data on circular value. Current nomenclature in the circular economy is largely geared toward measuring volumes of resource flows, but economic value losses and gains vary widely in nature, scale, and who they affect. Without common definitions, analyses risk being misunderstood, limiting their impact on policy and business. This report contributes novel input toward such a framework, drawing as far as possible on existing circular economy standards from the International Organisation for Standardisation (ISO). Importantly, ISO standards emphasise that circular measures must be sustainable across social, environmental, and economic dimensions. However, further work is needed to better incorporate the concept of circular value within these standards.
Data: The project has shown that current data is insufficient to assess circularity in Sweden from an economic perspective. While Statistics Sweden (SCB) has begun to track circularity, these efforts need to be expanded with a clearer economic focus and greater sectoral granularity. More robust data is essential to understand the value of resources embedded in society, identify market failures, and provide a sound basis for designing and evaluating policy instruments. Weak data risks undermining trust in results and limiting their influence on decision-making. New EU regulations on sustainability reporting and traceability can provide a valuable foundation for improving data availability and quality.
Methods: Circular value analysis would benefit from further methodological research. This report applied specific methods, assumptions, and system boundaries. Applying the same approach with different sectoral scopes or alternative methods would allow for comparison, validation, and refinement, helping to identify methodological strengths and weaknesses. Greater methodological diversity would strengthen the overall evidence base and improve the robustness of future insights.
Actions needed
2. Expand value definitions and address market failures
This study adopts an economic framing of value in a linear versus circular economy, offering new insights into market failures and how to address them. It demonstrates that economic value creation is often concentrated in the least materially intensive stages of the value chain. By contrast, resource extraction and manufacturing—stages with high material throughput—generate comparatively lower economic value. This misalignment between material intensity and value creation is a key barrier to advancing a circular economy.
Current economic metrics often overlook the broader environmental, social, and systemic value embedded in production and consumption. As a result, many positive and negative sustainability impacts go unaccounted for, narrowing economic analyses and reducing their relevance for policymaking. This means that material-intensive processes may be labelled as ‘low economic value’, even though they can generate significant non-monetised benefits. At the same time, conventional economic models tend to prioritise consumption over alternative ways of fulfilling societal needs, undervaluing practices such as sharing, repair, maintenance, and service-based business models.
These gaps result in market failures, where circular opportunities are not implemented despite their potential. Both the public and private sectors must act to create a level playing field for circular solutions and address systemic misalignments across sectors.
Actions needed
3. Move towards cross-sectoral collaboration
When analysing value chains in isolation, we risk overlooking opportunities that emerge from a broader value network perspective. In a circular economy, resources often move between different value chains—for example, through market actors that collect, test, and resell materials. Industrial and urban symbiosis provides a clear illustration, where materials as well as energy resources like heat, steam, or cooling are shared more efficiently across networks. Similarly, scrapyards and material brokers create circular opportunities by redistributing resources. Expanding these resource intermediaries—such as symbiosis catalysts or collaboration platforms—on a larger, more coordinated scale could unlock further value.
Circular economy value networks are interconnected systems in which businesses, and sometimes other actors, collaborate to maintain the value of products, components, and materials throughout their lifecycle, minimising waste and maximising resource use. Unlike traditional linear value chains, these networks emphasise loops, feedback, and multi-directional flows of resources, materials, and information. They are essential for enabling business models such as take-back schemes, repair and refurbishment, remanufacturing, and product-as-a-service.
A defining feature of circular value ecosystems is the need for a shared customer value proposition across the network. This requires deliberate and sometimes complex decisions about how value is created and distributed among participating actors.
This study focused on value chains independently to identify Value Gaps in the six priority sectors. However, as Sweden moves toward a more circular economy, cross-sectoral symbiosis will become increasingly important. Mapping and leveraging interactions between sectors will be critical for capturing and retaining economic value, ensuring that opportunities are not missed by examining sectors in isolation.
Actions needed
4. Promote a shift in mindset toward needs-based consumption
Sweden’s high consumption levels highlight the need to better understand consumer behaviour, particularly the concept of value. Our study shows that significant value losses occur during the use phase of materials and products. While these losses are not solely a ‘consumer problem’—and solutions at the macro and micro levels have been discussed—consumers play an important role in advancing a value-preserving circular economy. By choosing circular products and services, and making deliberate decisions at the end-of-life phase, consumers can drive circular solutions. In many cases, these choices are also cost-effective, helping individuals save money while reducing waste.
Consumer understanding of the distinction between price and value is essential. Our research highlights patterns of overconsumption, such as underutilised living space, excessive food intake, and the use of oversized vehicles. These behaviours reveal a weak link between consumption and actual utility, even though perceived value varies across individuals. Similar considerations apply across a wide range of products.
Moving forward, broader conversations and actions are needed to challenge consumption habits and encourage sufficiency. Stakeholders should foster a value-driven mindset—one that prioritises function, longevity, and shared use over accumulation.
Actions needed
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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