How does the circular economy affect energy security and renewable energy development?

Muhammad Tayyab Sohail, Sana Ullah and Sidra Sohail

Energy, 2025, vol. 320, issue C

Abstract: In addition to climate change, energy security remains a key concern for world leaders globally. Renewable energy is widely recognized as the best possible solution to overcome the issues of climate change, global warming, and energy security. In recent times, some new economic models have also gained popularity; among them, the circular economy is the most popular and practiced one. However, whether a circular economy has any role in promoting energy security and the development of renewable energy sources is a research question that hasn't received much attention in the past. Thus, an ample gap in the literature needs to be addressed. This study aims to fill this gap by investigating the impact of the circular economy on energy security and renewable energy development in Europe. To that end, we have employed the two-stage least square (2SLS) and system generalized method of moments (SGMM) estimation techniques. The findings reveal that circular economy, circular material, circular innovation, and circular economy investment help reduce the energy security risk in Europe. However, these factors and trade-in recyclables are vital in enhancing European renewable energy production. In addition, financial development and logistic performance mitigate energy security risks, while foreign direct investment and carbon emissions enhance energy security risks. On the other hand, financial development and carbon emissions are helpful in renewable energy production.

Keywords: Circular economy; Energy security; Renewable energy development (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:320:y:2025:i:c:s0360544225009909

DOI: 10.1016/j.energy.2025.135348

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