The circular economy in Spain has moved from regulatory trend to established investment thesis. We analyse the segments with the greatest potential, current valuations, and the factors that determine which circular companies create sustainable value.
For years, the circular economy was a concept relegated to sustainability reports: a necessary section to meet stakeholder expectations but rarely integrated into investment decisions. That has changed. In 2025, the circular economy in Spain has moved beyond statements of intent to become an investment thesis with solid fundamentals.
Several converging forces are driving the circular economy from aspiration to investable reality in Spain.
Regulatory pressure. The EU Circular Economy Action Plan, the Waste Framework Directive, and Spain’s own Circular Economy Strategy (EEEC) are creating a regulatory environment that penalises linear models and rewards circular ones. Extended producer responsibility schemes, mandatory recycled content targets, and landfill restrictions are transforming the economics of waste and materials.
Raw material economics. Spain’s dependence on imported raw materials makes the circular alternative increasingly attractive from a pure cost perspective. As global commodity prices remain volatile, companies that can source inputs from recovered materials enjoy both cost stability and margin protection.
Corporate demand. Major Spanish and multinational companies are setting ambitious circularity targets, creating demand for circular suppliers and service providers throughout the value chain.
The market for refurbished and remarketed technology in Spain is growing at approximately 18% annually, driven by corporate IT refresh cycles, sustainability mandates, and the simple economics of acquiring quality technology at 40-60% of new prices. Companies that combine collection infrastructure, processing capabilities, quality certification, and distribution channels have built defensible positions.
The concept of using one company’s waste as another’s input is moving from theory to practice. Organised industrial symbiosis platforms — connecting waste generators with waste users — are emerging as investable businesses with network effects.
Spain produces over 12 million tonnes of packaging waste annually. The shift toward reusable systems, recycled content, and alternative materials is creating investment opportunities in collection, sorting, processing, and distribution.
Spain’s agri-food sector generates significant organic waste that can be valorised through composting, anaerobic digestion, and biorefining. The combination of waste reduction, energy generation, and fertiliser production creates multiple revenue streams.
Not every company that claims to be circular is a good investment. The factors that distinguish investable circular companies include:
Unit economics. The circular business model must be profitable at the unit level, not dependent on subsidies or regulatory mandates that could change.
Collection infrastructure. Access to input materials is the critical bottleneck. Companies that have built proprietary collection networks or long-term supply agreements have a structural advantage.
Quality and certification. Circular products must meet the same performance standards as virgin alternatives. Quality certification and testing capabilities are essential.
Scalability. The business model must be replicable across geographies and product categories without proportional increases in fixed costs.
Circular economy companies in the Spanish middle market currently trade at 6-9x EBITDA for established businesses and 8-12x for high-growth platforms. These multiples reflect the market’s growing recognition of the structural advantages of circular models, but they remain below the premiums seen in Northern European markets — suggesting upside potential as the Spanish market matures.
The circular economy has evolved from a regulatory obligation to a genuine investment thesis in Spain. For investors with the patience and expertise to identify the right companies, it offers an unusual combination: structural growth, defensible competitive positions, regulatory tailwinds, and the satisfaction of investing in businesses that are genuinely making the economy more sustainable. At Blue Mountain, this thesis has been central to our investment strategy for years, and we see its relevance only increasing.
By Blue Mountain Capital
By Blue Mountain Capital
By Blue Mountain Capital
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