The report, “Circular by Nature: A Policy Agenda for Bio-based Materials in a Circular Economy,” notes that many circular economy strategies do not provide enough guidance on managing these materials beyond using them as substitutes for limited resources.
The study’s findings come as more than 100 countries have introduced national circular economy roadmaps or action plans as of April 2026, marking a 34% increase from 2024.
Despite this growth in policymaking, the foundation’s analysis of 13 such national frameworks revealed that references to bio-based materials remain largely confined to their function as replacements for materials in linear systems.
Bio-based materials are materials made wholly from renewable biological sources, including plants, animals, algae, and microorganisms.
In its report, the Ellen MacArthur Foundation said that policy documents are mostly silent on subjects such as land-use impact, biodiversity, and the nutrient cycle.
It also highlights a tendency for certification schemes to focus on compostability at industrial scale rather than addressing wider environmental benefits or the infrastructural requirements for processing these materials at scale.
“Circular economy policies remain largely silent on upstream land-use pressures, biodiversity impacts and nutrient cycles. Similarly, certification schemes verify that a material can be industrially composted, not that it restores soil health or that the infrastructure to process it at scale exists,” the report states.
The non-profit contends that this current approach does not take full advantage of the opportunities that circular strategies could provide.
“Most bio-based materials are still produced and consumed within linear systems,” according to the report.
The foundation recommends a circular approach that could make use of regenerative sourcing, encourage keeping materials in circulation, create value from by-products and residues, and support novel business models that break the link between extraction and revenue.
To illustrate business action in this field, the report describes Gucci’s partnership with Nativa, developed by Chargeurs Luxury Fibers, covering 115,000 hectares of pastureland.
The initiative is designed to enhance soil quality, promote biodiversity, and improve carbon capture, while also providing full traceability across Gucci’s collections and strengthening supply chain resilience.
The report also references Gucci’s repair initiatives and the Gucci Circular Hub, launched in 2023. It said: “Driven partly by risk management for key materials (wool, cotton, leather), Gucci reinvents its luxury catalogue and value chain with a sustainability approach that involves strategic decisions from the farm level to a management system for raw material sourcing, design, and post-use materials.”
Five pillars of policy action
Among its central recommendations, the Ellen MacArthur Foundation calls for policy action across five areas:
- Designing for circularity and elevating the principle of regeneration: adapting circular design standards for bio-based materials, building on proven existing frameworks, and embedding regeneration as a core standard, and mandating traceability.
- Enable effective and safe material circulation: reviewing waste classifications that prematurely push bio-based materials into low-value treatment, and establishing clear secondary-use pathways.
- Promote financial and economic incentives that shift the playing field: redirecting agricultural subsidies towards regenerative practices, deploying eco-modulated EPR schemes, reducing VAT on repair and secondary applications, and phasing out incentives.
- Invest in innovation, skills, and infrastructure: from regenerative growing techniques and fibre-to-fibre recycling to biorefineries and composting facilities, with skills development integrated across vocational, agricultural, and industrial training.
- Collaborate across institutions, sectors, and borders: establishing cross-ministerial task forces, strengthening mutual recognition and interoperability of sustainability requirements across markets, and aligning trade policy with climate and biodiversity objectives.
The report, prepared with input from the Latin America and Caribbean Circular Economy Coalition, aims to provide policymakers and market actors with an analytical basis for developing more effective circular approaches for bio-based materials.
