Structural Dynamics of the European Circular Economy Through a Consumption–Circularity–Efficiency Framework

ABSTRACT

The transition toward a circular economy requires analytical approaches capable of capturing the interdependence between resource consumption, material circularity, and economic efficiency rather than assessing these processes through isolated indicators. This study develops and empirically evaluates the Consumption–Circularity–Efficiency (CCE) framework as an integrated representation of circular‐economy performance across the EU‐27. A balanced panel of 378 country–year observations covering 27 Member States over 2010–2023 was constructed from 10 harmonized Eurostat indicators. Principal component analysis (PCA) was used to identify the dominant multivariate structure, followed by robustness and alternative‐retention analyses, construction of dimension scores and a composite CCE index, country‐level and temporal assessment, and complementary observed‐variable structural equation modelling (SEM) with country‐clustered robust inference. Three retained PCA components explain 71.44% of total variance and correspond to Consumption, Circularity, and Efficiency, although substantive cross‐loadings show that these dimensions are interconnected rather than empirically isolated. The variance‐weighted CCE index proved highly robust to equal weighting ( r  = 0.983, p  < 0.001), indicating that comparative positioning is not driven by the aggregation rule. Country‐level results reveal pronounced structural heterogeneity: Similar composite CCE scores arise from markedly different combinations of consumption intensity, circular‐resource performance, and efficiency. Temporal analysis indicates an overall improvement in relative EU‐27 CCE performance between 2010 and 2023, accompanied by non‐linear evolution and persistent divergence in national transition pathways. SEM provides complementary structural corroboration by identifying RMC, resource productivity, and GDP per capita as interconnected interfaces between material throughput, circularity, and economic performance; several relationships operate through significant indirect pathways rather than direct associations alone. Global SEM fit is mixed, supporting structural compatibility rather than complete confirmatory fit or causal interpretation. The study contributes to circular‐economy research by integrating dimensional identification, composite measurement, structural configurations, temporal dynamics, and pathway analysis within a single empirical architecture. The CCE framework therefore provides a configuration‐based diagnostic approach that can support differentiated circular‐economy strategies while preserving the structural information concealed by conventional aggregate rankings.