Circular economy at risk: market pressures from ultra-cheap imports

As Europe accelerates its transition towards a circular economy, growing flows of ultra-cheap, low-quality imports risk undermining environmental ambition, fair competition and consumer safety. Through CLIC Talks, a brand-new discussion forum, CLIC Innovation takes a multi-stakeholder approach to this challenge, bringing actors from industry, retail and consumer organisation together to address what is increasingly a systemic market issue that needs to be taken care of.

Over the past decades, the circular economy has moved from vision to policy priority across Europe. The European Commission is preparing the ground for a Circular Economy Act, expected in 2026, intended to strengthen markets for recycled materials and circular products, reduce dependence on virgin raw materials, and support lower-emission value chains.

At the same time, Europe’s circular ambitions face a growing contradiction. The rapid growth of low-value e-commerce imports, often associated with short product lifetimes and weak traceability, is increasingly seen as a challenge for product safety, fair competition, and reuse and recycling systems. This “junk economy” puts pressure on responsible companies, strains recycling and waste management, and weakens the economic foundations required for long-term circular investments. As Juha Beurling-Pomoell, Secretary General of the Consumers’ Union of Finland, puts it:

“Junk economy means bad quality products – ranging from fairly poor quality to downright dangerous. And the growth we are seeing right now is very powerful.”

Circular economy requires functioning markets, not just regulation 

To explore this tension, CLIC launched CLIC Talks, multi-channel discussion series designed to improve dialogue between penta-helix stakeholders such as industry, academia, civil society, capital and governance. In the third episode, “How can Finland and Europe protect their circular economy against the junk economy?”, experts from consumer advocacy, waste management and retail discuss how market dynamics can work against circularity when responsibility and incentives are uneven. 

A core point in the discussion is that circular economy cannot function if products entering the market are not designed to last, be repaired, or be safely recycled. Poor-quality goods with unknown material and chemical content create risks throughout the value chain, from consumer safety to recycling operations. From the perspective of waste management and material recovery, the consequences are operational and immediate. Kari Rahkonen, Managing Director, NG Nordic, summarises the constraint: 

“Recycling becomes infinitely more difficult if we don’t know the material and chemical content of the product.”  

Extended producer responsibility (EPR) has been a cornerstone of European circular policy, but the episode underlines that its effectiveness depends on fair and comprehensive implementation. When products are sold directly to consumers from outside the EU without equivalent obligations, circular systems lose both environmental impact and economic credibility. As Beurling-Pomoell argues: 

“As long as a company is advertising to Finnish consumers, it must also carry responsibility.”

The junk economy threatens competitiveness and trust 

Beyond environmental impacts, the junk economy distorts competition. European companies operate under strict product safety, chemicals and consumer protection rules. Compliance adds cost, but it also builds trust. When obligations are unevenly applied across sales channels, responsible businesses are placed at a structural disadvantage. 

The episode makes clear that this is not simply a consumer choice issue. Aggressive digital marketing, dark patterns and price pressure increasingly shape purchasing behaviour, especially in times of economic uncertainty. Without corrective measures, the circular economy risks becoming a premium niche rather than the default market model. As Veli-Matti Kankaanpää, Managing Director of the Fashion and Sports Commerce Association, notes: 

“European companies cannot compete on price with products that are not designed to meet the same safety and responsibility requirements.” 

From a system perspective, the consequences are significant: reuse, repair and recycling become more difficult or impossible, hazardous substances can circulate unknowingly, and investments in circular infrastructure become harder to justify and finance. Over time, this undermines Europe’s ability to build resilient material markets based on reuse, repair and high-quality recycling. 

From policy ambition to systemic solutions 

The discussion also points towards solutions. Strengthening platform responsibility, improving customs and market surveillance practices, and ensuring that all products entering the EU market carry equivalent obligations are widely seen as critical steps. Measures such as clearer accountability for product safety, more effective enforcement, and credible approaches to traceability can help restore a level playing field.

Importantly, the episode emphasises that the circular economy must remain grounded in economic reality. Regulation alone is not enough; incentives must align with market behaviour. Circular solutions must be competitive, scalable and trusted by consumers to succeed. Kankaanpää summarises the principle succinctly:

“The goal is that wherever the consumer buys a product, every channel must carry the same responsibility.”

CLIC’s role: enabling collaboration where systems meet

At CLIC Innovation, we emphasise that defending and advancing the circular economy requires systemic collaboration. Technology development, policy design, market structures and consumer behaviour are deeply interconnected, and no single actor can solve these challenges alone. 

Through ecosystem facilitation such as 4R ecosystem, joint project development and platforms such as CLIC Talks, CLIC brings together penta-helix actors to address real-world contradictions and co-create workable solutions. Our role is to help ensure that Europe’s circular economy remains not only ambitious, but economically viable, fair and resilient. 

If Europe wants circular economy to become a competitive advantage rather than a regulatory burden, now is the moment to align market rules with sustainability goals. 

For more information