Circular economy transition under the revised Industrial Emissions Directive: A review of challenges and enablers

The transition to a circular economy is gaining increasing attention from academics, industry, and policymakers. A promising approach involves integrating circular economy objectives into environmental permits for industrial installations regulated under the revised European Union Industrial Emissions Directive (IED 2.0). Despite its potential, a systematic identification of challenges and enabling factors is still lacking. This study addresses that gap using a replicable four-step methodology adapted from the PRISMA guidelines. A total of 70 academic papers and 23 technical documents published between 1996 and 2024 were analysed. Based on this review, a theoretical framework was developed, defining eight intervention areas through the combination of four levels of approach—installation, industrial area, supply chain, and territory—with two potential intervention mechanisms: the exchange of Best Available Techniques information and the permitting process. Sixteen key challenges and thirteen sets of enablers were identified across these areas. Most enablers target the installation level, aligning with the core scope of IED 2.0. However, achieving a broader circular economy transition requires consideration of all levels of approach. Accordingly, future research should explore emerging Best Available Techniques related to circular economy implementation at both the installation and industrial area levels. A value chain approach is essential, supported by tools such as Life Cycle Assessment and voluntary initiatives. Additionally, developing robust case studies can support the Seville Process and provide guidance to operators and competent authorities. Expanding knowledge on indicators to measure and quantify circular economy contributions from industrial installations is also a critical next step.