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Circularity Gap Report (CGR) The Value Gap: Sweden

The Circularity Gap Report (CGR) The Value Gap: Sweden shows that Sweden loses approximately SEK 600 billion annually as a result of today’s linear “use-and-throw-away” economy, in which products are designed for a short lifespan and are rarely reused or recycled. The report shows that one-fifth of the total economic value created in the country each year is lost.

The report explores the relationship between circularity and economic value, and offers a new perspective on how linear principles lead to economic inefficiencies. As the first study of its kind, it offers important insights: a quantification of Sweden’s value gap—a unique measure of the economic value lost when resources, products, and systems are not fully utilized—as well as recommendations for promoting circularity through research, policy, and business practices.

“Historically, we’ve measured prosperity based on the value we create. Few have looked at the value we lose. Our economy is leaking, and the value gap shows where these leaks are and how much they cost,” says Ann-Charlotte Mellquist, project manager and researcher at RISE.

How much economic value is lost?

Building on the global and national CGR tradition of mapping material flows—which, for Sweden, was done in 2022 in the Circularity Gap Report Sweden—this report broadens the perspective and asks the critical question: What is the economic value of the materials we use, the products we consume, and the systems we build—and where is value lost or not realized?

“Our economy is leaking, and the value gap shows where these leaks are and how much they cost.”

^{_{Ann-Charlotte Mellquist, RISE}}

Sweden’s value gap amounts to 19 percent, which means that nearly one-fifth of potential economic value is lost due to linear principles. This corresponds to nearly SEK 600 billion annually (equivalent to 57 percent of Sweden’s national budget) across six sectors where economic value that could be created is either never realized or lost prematurely. The results point to a systemic flaw: today’s economic models leave significant value untapped. Closing this gap offers major opportunities to strengthen Sweden’s circular economy, increase economic resilience, and better meet societal needs.

“By addressing the values gap, Sweden can lead the way toward a more efficient economy that both conserves resources and strengthens competitiveness.”

_{^{Klas Cullbrand, RE:Source}}

The imbalance between material intensity and value creation is a key obstacle to circular development. Value creation often occurs downstream—closer to the consumer and in less material-intensive activities—while upstream stages, such as extraction and manufacturing, are resource-intensive and generate lower economic value.

“Our findings reflect this pattern: the mining and extraction sector shows relatively small losses in value, while sectors such as construction and real estate and consumer products exhibit significantly greater losses. This imbalance underscores the need to redesign the systems that currently rely on high material throughput for relatively low value addition,” says Ann-Charlotte Mellquist.

The Largest Losses: Premature Disposal and Overconsumption

Preventing premature disposal and overconsumption represents Sweden’s greatest opportunity to increase value retention. The report shows that products disposed of prematurely are the largest source of lost value, costing Sweden SEK 420 billion annually. In addition, overconsumption—expenditures that exceed actual needs or provide minimal benefit—amounts to SEK 200 billion annually.

“A large number of products are discarded long before they reach the end of their potential lifespan, and the majority are never given the chance to be reused or refurbished. “Our inability to give products and materials long lifespans means that we are wasting not only the materials themselves, but also the energy, labor, and infrastructure invested in them—the very value we work so hard to create,” says Klas Cullbrand, Innovation Leader at RE:Source.

Addressing these losses through circular design, business model innovation, and behavioral change can significantly improve resource efficiency while meeting societal needs in a more sustainable way.

“Sweden is known for its sustainability ambitions and capacity for innovation. By addressing the value gap, Sweden can lead the way toward a more efficient economy that both conserves resources and strengthens competitiveness,” says Klas Cullbrand.

Measures to Close Sweden’s Value Gap

Understanding where and how value is lost is difficult due to limited data on material flows and which economic activities are circular. The complexity of the analyses and the lack of consistent national statistical data have required carefully defined assumptions, validated by experts. Improved data collection, better metrics for the circular economy, and increased methodological rigor are therefore crucial for future analyses and policy development.

The results point to four strategic measures to close Sweden’s value gap:

• Use data to inform circular solutions by standardizing definitions, improving statistics, and supporting further methodological development.
• Expand value definitions and correct market failures through policies that recognize environmental and social value, such as repair subsidies, tax incentives for reuse, and regulations for circular procurement.
• Promote cross-sector collaboration to scale up circular business models such as “product as a service,” reuse platforms, and industrial symbiosis, supported by research on data- and value-sharing mechanisms.
• Promote needs-based consumption by integrating sufficiency and circularity into education, culture, and regulation, while making reuse, repair, and sharing more attractive through incentives and campaigns.

By redefining how value is defined, created, and preserved, Sweden can transform its linear economy into one that is circular, competitive, and resilient—while at the same time recovering lost value and promoting environmental and societal goals.

Download the report

The report was initiated and funded by RE:Source and produced by RISE in collaboration with Circle Economy. You can download both the English and Swedish versions of the report here:

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