What is the circular economy?
The circular economy: a new model of sustainable production and consumption
Reducing, reusing and recycling may be the best way to tackle resource depletion. Adopting this approach to managing everything we consume requires a commitment to the circular economy, which represents a fundamental shift in the way we address resource scarcity, environmental impact, value creation and employment.
The generation of waste because of economic activity and household consumption is one of the greatest challenges facing the planet today. According to the What a Waste 3.0 report, published by the World Bank in 2026 on the global state of solid-waste management, the world is expected to generate 3.9 billion tonnes of waste annually by 2050, representing a 50% increase compared with 2022 levels.
The same report notes that rapid population growth, accelerated urbanisation, rising incomes and increased consumption are the main drivers behind this sharp rise in municipal solid waste generation, which is already exceeding the capacity of local systems.
As a result, cities and communities around the world are struggling to cope with growing volumes of waste. When waste is not managed properly, the consequences can be far-reaching: environmental pollution intensifies, greenhouse gas (GHG) emissions increase and valuable natural resources are wasted.
In response, it is essential to move towards waste management systems based on circular economy principles, where materials are reused and their value preserved, benefiting both local communities and the global environment.
¿What is circular economy?
The circular economy places production processes at the heart of its approach, promoting reuse, repair and recycling while encouraging more sustainable manufacturing and consumption. In this way, it not only reduces waste but also saves energy and helps prevent irreversible damage related to climate change, biodiversity loss and air, soil and water pollution caused by consuming resources faster than the Earth can regenerate them.
To mitigate environmental impacts, waste generation must be minimised and products, materials and resources kept in the economy for as long as possible. These are the foundations of the circular economy, which seeks to establish a new model of producing and consuming goods and services linked to sustainability.
Society as a whole can and should contribute to making the circular economy a widespread reality. Putting the phrase "nothing is lost, everything is transformed" into practice is a good way to play our part.
SEE INFOGRAPHIC: The stages of the circular economy [PDF]
Benefits of the circular economy
Below are some of the main benefits of applying the circular economy across society:
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Protects biodiversity
Reusing products reduces the consumption of natural resources and helps avoid human activities that drive changes in nature.
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Reduces emissions
Industrial processes, the manufacture of new products and waste management are all significant sources of greenhouse gas emissions. In fact, the Global Methane Assessment identified the waste sector as the world's third-largest source of methane, responsible for approximately 20% of global emissions of the gas.
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Creates industrial value
The circular economy also represents a major growth opportunity for sectors operating across the supply chain. According to the What a Waste 3.0 report, activities such as waste collection, sorting and recycling support secondary industries including manufacturing and construction.
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Reduces dependence on raw materials
The linear economic model, based on producing, consuming and disposing, depends heavily on raw materials. Reducing this dependence brings many benefits, including greater security of supply, more stable prices and the preservation of natural capital.
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Creates new jobs
Recent studies suggest that demand for professionals with expertise in circular economy sectors will continue to grow. According to the International Labour Organization, up to 24 million new jobs could be created by 2030 if the necessary policies to promote the circular economy are implemented.
Circular economy model at the Iberdrola Group
At Iberdrola, we are working to be more respectful of nature through our three strategic sustainability priorities: climate action, biodiversity protection and the circular economy.
For this reason, our sustainable business model is based on circular economy principles, a resource-management system that prioritises reducing the use of new raw materials through process efficiency, extending product life cycles and promoting the reuse and recycling of materials.
We apply this approach throughout our value chain, building a decarbonised future alongside strategic partners who share our vision and values for environmental protection and preservation.
In 2025, we carried out circular economy initiatives related to wind turbine blade recycling, radioactive waste storage and reducing gas consumption.
Wind turbine blade recycling
The Group recycles or reuses a high percentage of retired wind turbine blades. The solutions currently employed are appropriate for the relatively low volume of blades being decommissioned and are aligned with industry practices, although not all of them are scalable.
To address future needs resulting from the growing number of blades coming from the decommissioning or repowering of wind farms in Spain, Iberdrola and other partners established EnergyLOOP in 2022, a company focused on recycling technologies with the aim of generating secondary raw materials for other industries.
The blade-recycling facility, which entered operation in 2025, is already processing blades from two wind farms undergoing repowering in Spain. During the year, the value chain continued to be analysed in different countries to identify recycling solutions suited to each geography.
Our circular economy targets
At Iberdrola, we have set a target of recycling more than 90% of wind turbine blades and solar panels by 2030. This goal is aligned with the new Nature Management and Protection Policy and its guiding principles..
| EFFICIENT USE OF RESOURCES | METRIC | 2025 | 2028e | 2030e |
|---|---|---|---|---|
| Blades and Solar Panels Recycling | Number (cumulative)1 | 947 | >3,000 | >5,000 (90%) |
(1) Estimate of recycled blades in 2030 according to the current operational plan and subject to revision depending on the evolution thereof. Target by 2030: 90% recycling of blades and panels.