2026年循环性差距报告：价值缺口

TheCircularityGap

Report2026

TheValueGap

Methodologydocument

Version1.0

22/12/2025

2

Contents

Contents2

1.Introduction4

Researchgoal4

Theoreticalbackground5

Researchscope11

2.Methodsanddata13

TheValueGapmetric13

GrossDomesticProduct,NetDomesticProduct,andConsumptionofFixedCapital

15

Processinglosses18

End-of-Lifewaste21

Foodlossesandwaste24

Energylosses26

3.Limitationsandfurtherresearch33

Limitations33

Overconsumption36

Annexe40

Acknowledgements75

3

C

AboutCircleEconomy

CircleEconomyisanon-profitorganisationfounded

in2011andbasedinAmsterdam.Ourvisionisan

economicsystemthatensurestheplanetandall

peoplecanthrive.Weworkwithpartnersworldwide,

equippingthemwiththeinsights,strategies,and

toolstoacceleratethecirculareconomytransition.

Ourinternationalteamcombinesresearch,data

analysis,advisoryservices,andcapacity-building

programmesacrossfourfocusareas:finance,cities,

employment,andvaluechains.CircleEconomyis

theorganisationbehindtheCircularityGapReport

(CGR®),theleadingglobalbenchmarkfor

measuringandtrackingcircularity.

4

1.Introduction

Researchgoal

Inaworldoffiniteresources,thecurrenteconomicmodel,oftencharacterisedaslinear

('take-make-waste'),createsquantifiablevaluelossandcanexposetheglobaleconomyto

systemicriskstiedtoresourcevolatility.Addressingtheinefficienciesinherentinthismodelisimportantforbuildingamoreresilienteconomicfuture.Failuretoaddressthesechallenges

couldleadtosubstantialeconomicconsequencesfortheglobaleconomy,includingsignificantfinanciallossesthatmaynotbefullyanticipatedwithincurrentplanningframeworks.For

example,ithasbeenestimatedthat‘uncheckedclimatechangealonecouldcosttheglobal

economyUS$178trillioninnetpresentvaluetermsbetween2021and2070’.1Factorscontributingtolinearriskincludetheintensiveutilisationofscarceandnon-renewableresources,a

predominantrelianceonvirginmaterialmarkets,andchallengesinfosteringcollaboration,innovation,andadaptationwithinexistingeconomicframeworks.2

Inrecentyears,therehasbeenadiscernibleshiftamongeconomicactorstowardredefining

riskprofilesandreassessingcorporatevaluebyinternalisingenvironmental

externalities—specifically,bymonetisingenvironmentalimpacts(ortheirassociatedrisks)forintegrationintofinancialdecision-makingprocesses.Correspondingly,investmentsincirculareconomystrategies,businessmodels,andinfrastructurehaveincreased,accompaniedby

numerousinitiativesaimedatquantifyingtheseeconomicefforts.3The2025theCircularityGapReportFinanceestimatedthat,onaverage,€26billionwasinvestedeachyeargloballybetween2021and2023inbusinessesengagingwiththecirculareconomy.4

Despitetheseadvancesinmeasurementandreporting,itremainsunclearwhatproportionofvalueislostacrosstheglobaleconomyduetosomemarketfailuresandinefficienciessuchasavoidabledeterioration,prematureobsolescence,materialwastageandenvironmental

externalities—relativetothetotalvaluecreatedandutilised.Thisstudyseekstohelpaddressthisknowledgegapbyansweringthefollowingresearchquestion:

Whatistheextentofavoidableeconomicvaluelostduetoinefficientlinearpracticesgloballywithina

givenaccountingyear?

ThefollowingsectiondefinesthescopeofthisresearchquestionandoutlinesthegeneralapproachemployedtoestimateametricthisreporttermstheValueGap(VG).

1DeloitteDevelopmentLLC.(2022).Theturningpoint:Aglobalsummary.Retrievedfrom:

Deloittewebsite

2CircleEconomy,PGGM,KPMG,WBCSD,&EBRD.(2018).LinearRisks.CircleEconomy.Retrievedfrom:

CircleEconomy

website

3Lawlor,E.,&Spratt,S.(2021).Circularinvestment:Areviewofglobalspendingandbarrierstoincreasingit(WorkingPaper).JustEconomics;CommissionedbyChathamHouse.Retrievedfrom:

Resourcetradewebsite

4CircleEconomy.(2025).CircularityGapReportFinance.Retrievedfrom:

CircleEconomywebsite

5

Theoreticalbackground

Whatconstitutesvalue?Numeroustheoriesofvalueexist,eachexhibitingvaryingdegreesof

compatibilitywithdifferentinterpretationsofthecirculareconomyparadigm.Conceptually,thetheoreticalfoundationofthisanalysisdrawsonbothreceivertheories,whichassociatevalue

withhumandemand,anddonortheories,whichattributevaluetotheobjectiveresourcesrequiredtoproduceagoodorservice.5

Withinneoclassicaleconomics,thetheoryofmarginalutilitypositsthatexchangevalue

emergesattheintersectionofutility—reflectingsubjectiveindividualpreferences—andthecostofproduction,whichisdeterminedbyscarcity.Thisfoundationalnotioniscomplementedby

perspectivesfromecologicaleconomics,whichlinkvalueandscarcitytothermodynamic

principles.Theseperspectivesintroducetheconceptofcontributoryvalue,whichexists

independentlyofahumanvaluer(suchasecologicalorshadowprices).Ecologicaleconomics

complementsthisviewbyintegratingconsiderationssuchassustainablescaleorefficientand

equitableallocation.Theseprinciplesencourageabroaderassessmentofvaluecreationbeyondtraditionalparadigms(suchasgrowth-orientedandtrickle-downeconomics)andmetrics,

highlightingnewpathwaysfordevelopment.

Operationally,thedefinitionofvalueadoptedinthismethodologyisgroundedinthenotionsoffunctionalvalueandcreatedvalue,asarticulatedbyVulstekeetal.(2024).6Theanthropocentricconceptoffunctionalvalueisattributedtoresources,materials,components,andproducts

basedontheircapacitytoprovidefunctionstoproductsorhumans,therebycontributingto

humanwell-being.Withinthecirculareconomy,thefunctionalvalueoftheseelementsistoberetainedtothegreatestextentpossible.

Intheprevailingeconomicparadigm,bothactualandperceivedfunctionalvaluearequantifiedinmonetarytermsandconstitutetheprimarydeterminantsofeconomicvaluecreation,thus

establishingthelinkbetweenfunctionalandcreatedvalue.Createdvalueisdefinedasthenetbalanceofallpositiveandnegativeeconomic,social,andenvironmentalimpactsgenerated

overaproduct’slifecycle.Ittherebyservesasabridgebetweenthecirculareconomyand

sustainabledevelopment,withthemaximisationofcreatedvaluerepresentingoneofthekeyobjectivesofasustainablecirculareconomy.

FigureoneandFiguretwoschematicallyillustratebothvaluetypesandhowtheyarelinkedtoaproduct’slifecycle.Inaddition,theyintroducethecompositionalstructureoffunctionalvalue

usedinthisframework:aconsumerproductisthefinalgoodaconsumercanbuy,andtypicallyconsistsofcomponents(orsemi-finishedproducts).Thesecomponents,inturn,arecomposedofspecific(raw)materials,whichcanoriginatefromeitherthenaturalenvironmentorthe

technosphere.Theformerarereferredtoasprimarynaturalresources,whilethelatteraresecondaryresources.

5Lowe,B.H.,&Genovese,A.(2022).Whattheoriesofvalue(could)underpinourcircularfutures?EcologicalEconomics,195,107382.doi:10.1016/j.ecolecon.2022.107382

6Vulsteke,K.,Huysveld,S.,Thomassen,G.,Beylot,A.,Rechberger,H.,&Dewulf,J.(2024).Whatisthemeaningofvalueinacirculareconomy?Aconceptualframework.Resources,ConservationandRecycling,207.

/10.1016/j.resconrec.2024.10768,7

6

Figureone.Schematicoverviewofthetwovaluetypesrelevanttothecirculareconomy.Theillustrationislimitedtotheproductlifecycleuntiltheend-of-life,providingavisualrepresentationofthemeaningandrelationof

bothvaluetypes.Source:Vulstekeetal.(2024)

Theconceptofvalueassociatedwithmaterials,components,andproducts—anditsevolution

acrossthelifecycle—istypicallydividedintothreestages:pre-use,use,andpost-use.During

thepre-useormanufacturingstage,materialsandcomponentsareproduced,andvalueis

addedtothem.Atthebeginningoftheusestage,valuereachesitsmaximum,afterwhichit

graduallydeclinesthroughuseandpost-use.7Whenvisualisedoverthelife-cycle,therise,peak,anddeclineresemblea‘valuehill’.8

7Kumar,V.,Shirodkar,P.S.,Camelio,J.A.,&Sutherland,J.W.(2007).Valueflowcharacterizationduringproductlifecycletoassistinrecoverydecisions.InternationalJournalofProductionResearch,45(18–19),4555–4572.

doi:10.1080/00207540701474633

8Achterberg,E.,Hinfelaar,J.,&Bocken,N.(2016).MastercircularbusinesswiththeValueHill[Report].CircleEconomy;SustainableFinanceLab;Nuovalente;TUDelft;HetGroeneBrein.Retrievedfrom:

CircleEconomywebsite

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Figuretwo.Conceptualillustrationoftheestimatedevolutionoffunctionalvalueofadurableproductwithagradualdecreaseofproduct,componentandmaterialfunctionalvaluethroughouttheusephaseuntilthe

end-of-life(EOL).Source:Vulstekeetal.(2024).

Materialfunctionalvalueisthefirstconstituentoftotalfunctionalvalue.Itpersiststhroughouttheproductlifecycle,asmaterialspossessinherentpropertiesthatenablespecificfunctions

withincomponentsorproducts.Forinstance,copperisusedinprintedcircuitboardsforitsconductivity,andindiumintouchscreensforitstransparencyandflexibility.Thespecific

materialfunctionalvalue—definedperunitmass—dependsonphysicalandchemical

characteristicsandcloselyalignswithwhatisoftentermed‘materialquality’intheliterature.9

Whenmaterialswithdistinctfunctionsarecombined,newcomponent-levelfunctionalitiesemerge.Forexample,lithiumcobaltoxide,graphite,andelectrolytestogetherforma

lithium-ionbatterycapableofstoringandsupplyingpowertoalaptop.10Thisdefinesthe

componentfunctionalvalue—thevalueoffunctionalityembeddedwithinacomponent,not

directlyexperiencedbytheconsumer.Similarly,productfunctionalvalueariseswhen

componentsareintegratedintoafinalconsumerproductthatdeliversadirectfunction.For

example,anelectricvehicleprovidesmobilitytousers,anditsrangeonafullchargecontributestoitsproduct’sfunctionalvalue.Inthisframework,functionalvalueistreatedasanobjective

measure,particularlyattheproductlevel,wheresubjectiveperceptionsofvalueoftenemerge.Differentiatingbetweenmaterial,component,andproductfunctionalvaluesenablesfora

clearerassessmentofhowfunctionalvalueevolvesthroughoutaproduct’slifecycle.

Atthebeginningoftheproductlifecycle,whenmaterialsoriginatefromthenatural

environment,thereisonlyminimalmaterialfunctionalvalue.Throughprimaryproduction

processessuchasminingandrefining,thisvalueincreasesasmaterialsareextractedand

purified.Materialfunctionalvaluetypicallypeaksatthestageofpureprimaryrawmaterials,whichpossesshighpotentialtodeliverfunctionswithincomponentsorproducts.

Duringcomponentmanufacturing,variousrawmaterialsarecombinedintospecific

configurations,oftenresultinginadeclineinmaterialfunctionalvalueduetoprocessinglosses.Morecomplexcomponents,incorporatingmultiplematerials,generallyexperiencegreater

declines.Nonetheless,ascomponentsareproducedtoservedefinedfunctions,component

functionalvalueemerges.Similarly,duringproductassembly,furtherdecreasesinmaterial

functionalvaluemayoccur,andcomponentfunctionalvaluemayalsobeaffectedbyproductdesign.Insomecases,componentsareassembledinwaysthatpreventdisassembly,

eliminatingboththefunctionalvalueofthecomponentandthematerial—aneffectdescribedas‘lossbydesign’.

9Tonini,D.,Albizzati,P.F.,Caro,D.,DeMeester,S.,Garbarino,E.,&Blengini,G.A.(2022).Qualityofrecycling:Urgentandundefined.WasteManagement,146,11–19.doi:10.1016/j.wasman.2022.04.037

10Mossali,E.,Picone,N.,Gentilini,L.,Rodrìguez,O.,Pérez,J.M.,&Colledani,M.(2020).Lithium-ionbatteriestowardsCircularEconomy:Aliteraturereviewofopportunitiesandissuesofrecyclingtreatments.JournalofEnvironmental

Management,264,110500.doi:10.1016/j.jenvman.2020.110500

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Intheusephase,thetypeofproductdeterminesthetrajectoryoffunctionalvalue.11

Consumableproducts(suchasfoodandpersonalcareitems)exhibitrapiddeclinesastheir

materialsaretransformedordispersedintotheenvironment,leadingtonear-totallossof

functionalvalue.Incontrast,durableproducts(likeelectronics,clothing,andfurniture)retaintheirfunctionalvalueoverlongerperiods,althoughitgraduallydiminishesduetowear,

deterioration,ordamage.

Eventually,aproductreachestheendofitsfirstlifecycle(end-of-life),definedasthepointwhentheinitialuserceasestouseit.Thismayoccurduetocompletephysicalfailure,resultingina

totallossofproductfunctionalvalue,althoughcomponentandmaterialfunctionalvaluemayremain.Inothercases,prematureobsolescenceoccurs—whentheproductisdiscardedbeforeitsfunctionalvalueisexhausted—duetofactorssuchasuserdissatisfaction,performance

decline,orregulatoryrestrictions.Inallcases,thequantityandqualityoftheremainingfunctionalvaluedeterminethefeasibleend-of-lifestrategy(seeTextboxone).

Textboxone.

End-of-Lifestrategieswithinthevalueframework

Toillustratetherelationshipbetweenthedifferentvaluesubtypesandthecirculareconomy,acomparativequalitativeanalysisofend-of-life(EoL)strategiesforadurableproductwas

conducted.Asaquantitativecasestudyisnotyetfeasible,aqualitativeexamplewasdeemedappropriatetoexaminethemechanismsunderlyingdistinctEoLapproaches.Fourstrategiesarecompared:landfilling,closed-looprecycling,remanufacturing,andreuse.Landfilling

servesasthereferencepointforthelineareconomy,whileclosed-looprecyclingpreserves

materials,remanufacturingpreservescomponents,andreusepreservestheentireproductinacirculareconomy.ThisframeworkenablestheassessmentofmultipleEoLstrategieswithinacirculareconomycontext.

Inreality,materialcyclesarehighlyinterconnected—forexample,crudeoilfunctionsasa

primaryresourceforfuels,chemicals,andplastics.However,toreducesystemcomplexity,theanalysisfocusessolelyonthematerialscomposingtheproductduringitsfirstlifecycle.Thefunctionalvalueofnaturalresourcesisthusallocatedtothematerialscontainedwithinthe

studiedproduct.Whenadditionalprimarymaterialsareintroducedafterthefirstlifecycletoreplacelosses,theirassociatedmaterialfunctionalvalueisexcludedfromtheanalysis.The

resultingcomponentandproductfunctionalvaluesareallocatedonlytothematerialswithinthedefinedsystemboundary.

FigurethreepresentsthecomparativeresultsofthefourEoLstrategies.Becauseeach

scenariobeginswiththesameproduct,functionalvalueremainsidenticaluntiltheendofthefirstusephase.Theanalysis,therefore,concentratesonhowtheremainingfunctionalvalueispreservedorrecoveredthereafter.

11Böckin,D.,Willskytt,S.,André,H.,Tillman,A.-M.,&LjunggrenSöderman,M.(2020).Howproductcharacteristicscanguidemeasuresforresourceefficiency—asynthesisofassessmentstudies.Resources,ConservationandRecycling,154,104582.doi:10.1016/j.resconrec.2019.104582

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Landfillingrepresentsthebaselinelinearscenario,wherediscardedproductslosenearlyallproductandcomponentfunctionalvalue,althoughsomematerialsmaytheoreticallyretainresidualvalue.

Closed-looprecyclingaimstorecoverthefunctionalvalueofmaterialsforproducing

equivalentproducts,unlikeopen-looprecycling,whichredirectsmaterialstodifferentuses.

Whileproductandcomponentfunctionalvaluesarelostduringrecycling,materialfunctionalvalueoftenincreasesassecondaryrawmaterialsarepurifiedandseparated.Thesematerialsthenre-enterproductionprocesses,partiallyreconstructingthefunctionalvalueof

componentsandproducts.However,becauserecyclingefficienciesarebelow100%,new

primarymaterialsarerequiredtoreplacelosses,resultinginaloweroverallfunctionalvaluethaninthefirstlifecycle.

Remanufacturingfocusesonrestoringthefunctionalvalueofcomponentsandproducts,aswellasthefunctionalvalueoftheembeddedmaterials.Theprocessinvolvesdisassembly,

replacementofdefectivecomponents,andreassemblyintoa‘like-new’product.Disassemblytemporarilyincreasesmaterialfunctionalvalueduetotheseparationofcomponents,whiletheintegrationofnewpartsreinstatesproductfunctionality.Aspartofthevalueisattributedtothenewcomponents,thetotalfunctionalvalueremainslowerthanintheinitiallifecycle.

Finally,inthereusescenario,theproductistransferredtoanewuserwithoutmodificationonceitreachesitsfirstEoLpoint.Thefunctionalvalueremainsunchangedatthestartofthesecondlifecycleandgraduallydeclinesovertimeduetocontinueduse.Eventually,the

productmayreachitsphysicalendoflife,retainingonlymaterial—andinsomecases,

component—functionalvalue.Reusethusrepresentsoneofthesimplestandmostdirectmeansofextendingvaluecreationwithinacirculareconomy.

10

Figurethree.Estimatedevolutionoffunctionalvalueforfourdifferentend-of-lifestrategiesforadurableproduct.Source:Vulstekeetal.(2024)

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Researchscope

Inthisapproach,functionalvaluelossisestimatedwiththeaimofdistinguishingbetween

materialandproductvalue.Theresidualfunctionalvalueoflandfilledmaterialsisassumedto

bezero.Thefunctionalvalueofcomponentsisincluded,butnotspecificallyquantified.The

valueofprimaryresources,intheformofnaturalreserves(capital),andtheirdepletionarenotincluded.Createdvalueisonlypartiallyincludedintheformoftheenvironmentalandsocial

costs(shadowcost)ofunsorted12wasteandGHGemissions.Itisimportanttonotethatinthepresentapproach,thecreatedvalueofnegativeimpactsisaccountedforintheformofapositive(shadow)costofdealing13withsuchimpacts.Assuch,thispositivemonetaryvalue(cost)canbeconsideredasaformofvalueloss.

Fivemainpathwaysthroughwhichfunctionalvalueislostduetoinefficientuseareidentified:

deteriorationthroughtheconsumptionoffixedcapital(in-useassets);prematureobsolescencethroughresidualvalueinEoLwaste;mismanagementthroughmanufacturing(orprocessing)

losses;foodlossesandwaste;andenergylosses.InefficientmanagementalsoincludesthecostofprocessingandEoLwastecollectionandtreatment.Createdvaluelossduetonegative

environmentalandsocialimpactsispartiallyincludedthroughtheSocialCostofCarbon(SCC)forGHGemissions14andaneco-efficiency-basedopportunitycostforunsortedwaste.15Inthecurrentmethodology,whileinternalisationthroughvaluationofenvironmentalandsocial

impactsisacknowledgedasoneofthemechanismstoquantifyvalueloss,itisnotconsideredasanindependentvaluelosspathway.

Eachofthesepathways,themethodologyforinvestigatingit,andthedatausedareelaboratedindetailinthenextsection.Together,theyprovideanestimationofthescaleoffunctionalandcreatedvaluelost(intrillioneuros)inaspecificyear.Thegeneralapproachtoeachpathwayisbasedonthreesteps:

●Quantification:Materialandenergyflowsrelatedtotheaforementionedpathwaysare

quantified.Thesewillinclude,forinstance,thephysicalamountofmanufacturingwaste,End-of-Lifewasteorenergyconversionandtransformationlosses.

●Parametrisation:Parametersthataffecttheamountofphysicalwasteandlossescreatedareidentifiedandappliedtothematerialandenergyflowstodistinguishbetween

avoidableandunavoidablelossandwastefractions.Theseparameterswillinclude,forinstance,actualandmaximumprocessefficiency,recoverableversusunrecoverable

wastefractionsandwastecollectionandtreatmentrates.

12InthisapproachCircleEconomydefines‘unsortedwaste’as:“Allunmanagedwasteincludingopendumped,uncollectedandunaccountedwaste”.

13Thegeneralterm‘dealing’isusedpurposelytoreflectthepluralityofapproachesthroughwhichvaluation(costing)ofexternalitiescanbeperformed(see,forinstance:Lee,S.,Oh,D.,&Lee,J.(2014).Anewapproachtomeasuringshadowprice:ReconcilingEngineeringandeconomicperspectives.EnergyEconomics,46,66–77.

doi:10.1016/j.eneco.2014.07.019)

14Estrada,F.,Lupi,V.,Botzen,W.J.,&Tol,R.S.(2025).Urbanandnon-urbancontributionstothesocialcostofcarbon.NatureCommunications,16(1).doi:10.1038/s41467-025-59466-y

15Sala-Garrido,R.,Mocholi-Arce,M.,Molinos-Senante,M.,&Maziotis,A.(2023).Monetaryvaluationofunsortedwaste:Ashadowpriceapproach.JournalofEnvironmentalManagement,325,116668.doi:10.1016/j.jenvman.2022.116668

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●Valuation:Marketandshadowprices(thatis,pricesofenvironmentalandsocial

externalities)areappliedtotheavoidablelossesandwastefractionstoconvertthemintomonetaryvaluesandrelatethemtoNetDomesticProduct(NDP).

Thegeographicalscopeoftheanalysisisglobal,andthetemporalscopeis2021.Allmonetaryvaluesareexpressedin2021prices.Thecurrencyunitofreferenceismillionsofeuros,andanaverageexchangerateof0.846eurosperUSdollar(€/US$)wasapplied.16

16EuropeanCentralBank(ECB).(2025).USdollar(USD)—ECBeuroreferenceexchangerate.Retrievedfrom:

ECBwebsite

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2.Methodsanddata

TheValueGapmetric

TheVGmetricrepresentstheextentofeconomiclossduetoresourceandmaterialinefficiencies.Morespecifically,thisreportdefinestheVGmetricas:

Theamountofavoidablefunctionalvaluethatislostthroughmismanagementandpremature

obsolescenceofmaterials,productsandassets—plustheshadowcost(createdvalue)ofnegative

environmentalandsocialimpacts—inanaccountingyear.

Mathematically,thisisexpressedas:

avproc_avfood_aven_av

θ=θ+θ+θ+

θEoL_av

cfc_av

+θ(eq.1)

Where:

●Processinglosses(θproc)representthetotallossofmaterialfunctionalvaluedueto

mismanagementatthefabricationandmanufacturingstages(includingthecostsofwastetreatment)plustheshadowcost17ofunsortedprocessinglosses;

●Foodlossesandwaste(θfood)representthetotallossofproductfunctionalvaluedueto

mismanagementatthemanufacturing(foodlosses)anduse(ediblefoodwaste)stages(excludingthecostoftreatment).

●Energylosses(θen)representthetotallossofmaterialandproductfunctionalvalueduetomismanagementacrossallstagesofthesupplychain,plustheshadowcostofGHG

emissions;

●End-of-Lifewaste(θEoL)representsthetotallossofproductfunctionalvaluedueto

prematureobsolescence(expressedintermsofresidualvalueinEoLwasteandincludingthecostofwastetreatment)plustheshadowcostofunsortedEoLwaste;

●GrossDomesticProduct(GDP)representsthetotalgrossvaluegeneratedbytheeconomyinanaccountingyear;

cfc

●ConsumptionofFixedCapital(θ)representsthetotallossofproductfunctionalvaluedue

toavoidablephysicaldeteriorationofassets,expressedinmonetarytermsasdepreciation;

●“Avoidable”subscript(av)representsonlytheshareoftotallossesforeachpathwaythatistechnicallyavoidablethroughtechnologicalandbehaviouralchangesrelatedtocircular

interventions.Variableswiththissubscriptexcludeunavoidablelosses;

TheVGmetricwasdevelopedasastand-alonescaleindicator(expressedintrillioneuros),

wherethe“gap”conceptfunctionsasatheoreticalbenchmarkinastaticsystemwithafixed

target.BecausetheVGiscomposedsolelyofavoidablelosses,theimplicittheoreticaltargetis

17Hereafter“shadowcost”isusedasasynonymfor“shadowprice”and“environmentalcost/price”.Thisisdefinedas“

Thelossofeconomicwelfarethatoccurswhenoneadditionalkiloofapollutantisreleasedintotheenvironment[...]orwhennon-materialpollution,suchasnoiseiscreated”(Delft,C.E.(2023).Environmentalpriceshandbook2024:EU27

version).InthisreportitisusedasthemeasureofthecreatedvalueofnegativeenvironmentalimpactsunderthevalueframeworkbyVulstekeetal.(2024).

14

toeliminate100%ofthegapatanypointintime(seethe“Scale,rateandgapindicators”

sectionformoredetails).

Allpathwaysaredividedintoanavoidableandunavoidablefractionwhichrepresentsthe

maximumpotentialfor