Circular economy in the Netherlands: the legal hurdles

The main legal hurdles for a circular business in the Netherlands are waste status, product liability and ownership. Material that counts as waste falls under a strict permit and shipment regime until it qualifies as a by-product or meets the end-of-waste conditions, and that is a regulatory assessment, not a commercial choice.

The other two hurdles appear once products go round more than once. You remain liable as a producer for a defective product, including one built from reused parts. And if you lease or rent out products instead of selling them, Dutch property law decides who owns them once they are fixed to a building or when your customer goes bankrupt. Below we explain each hurdle, what the law says and how companies deal with it in practice.

What does the Dutch government expect from your business?

The Dutch government aims for a fully circular economy by 2050. That is a policy goal, not a legal duty that applies directly to your company; your actual obligations come from specific rules on waste, products, permits and contracts.

The national circular economy programme sets out the direction: use raw materials more efficiently, switch to sustainably produced renewable resources and develop new circular products and production methods. You can read the government’s aims on rijksoverheid.nl. The policy is translated into law step by step, often through EU legislation.

There is no general Dutch statute that fines companies for not being circular enough. Enforcement takes place through the rules that already apply to your activities: waste law in the Environmental Management Act (Wet milieubeheer), permits under the Environment and Planning Act (Omgevingswet), which applies since 1 January 2024, schemes for extended producer responsibility and, increasingly, EU product rules. That is where you need to look when you plan a circular model.

The underlying idea is simple. A circular company designs waste out of its products, keeps products and materials in use for as long as possible through reuse, repair and remanufacturing, and restores natural systems instead of depleting them. The legal questions arise precisely where materials move from one owner or one use to the next.

When is your material legally waste?

Material is waste when you discard it, intend to discard it or are required to discard it. This test comes from Article 3(1) of the EU Waste Framework Directive (Directive 2008/98/EC) and applies in the Netherlands through the Environmental Management Act.

What counts is your intention and your obligations, not the value of the material. A residue that another company is willing to pay for can still be waste in the legal sense. The consequences are practical and immediate. Processing waste usually requires a permit, transport is subject to registration and reporting rules, and moving waste across borders falls under the EU Waste Shipment Regulation, with notification and consent procedures for many waste streams.

For a circular business this is often the first obstacle. You may have found a buyer for your residues, but if the material is legally waste, the buyer needs the right permit and you need to follow the waste rules for every shipment. The text of the directive is available on EUR-Lex.

Can your residue count as a by-product?

Yes, if it meets four conditions in Article 5(1) of the Waste Framework Directive. Further use must be certain, the material must be usable directly without processing beyond normal industrial practice, it must be produced as an integral part of a production process, and its further use must be lawful without overall adverse effects on the environment or human health.

The condition that further use is certain is where most applications fail. A single offtake agreement for part of the volume is rarely enough. Authorities look at long-term contracts, a stable market and the absence of storage for an indefinite period. In our experience, a company that documents these points before it starts delivering has a much stronger position than one that tries to explain afterwards.

When does waste stop being waste?

Waste loses its status after a recovery operation, including recycling, if it meets the four conditions of Article 6(1) of the Waste Framework Directive. The material must be commonly used for specific purposes, there must be a market or demand for it, it must meet the technical requirements and legislation for that use, and its use must not lead to overall adverse effects on the environment or human health.

For some streams, such as certain types of metal scrap and glass cullet, the EU has set detailed end-of-waste criteria. For most other materials the assessment is made case by case. In the Netherlands you can ask Rijkswaterstaat for advice on by-product or end-of-waste status. That advice is valuable before you invest, because the classification determines which permits you and your customers need.

A typical example is a manufacturer that wants to sell processed plastic granulate from its own production residues. Until the granulate meets the end-of-waste conditions, every buyer is receiving waste. Once it meets them, the granulate is an ordinary product, and product rules such as chemical safety legislation apply instead.

Who is liable when a reused or refurbished product fails?

The producer is liable for damage caused by a defective product under Article 6:185 of the Dutch Civil Code (BW), regardless of fault. If you refurbish or substantially modify a product, you can be treated as its producer.

Articles 6:185 to 6:193 BW implement the EU Product Liability Directive. A product is defective if it does not offer the safety that a person may expect, taking into account its presentation, its reasonably expected use and the time it was put into circulation (Article 6:186 BW). Towards the injured person, this liability cannot be excluded or limited by contract (Article 6:192 BW).

The rules are changing. The new EU Product Liability Directive (Directive (EU) 2024/2853) applies to products placed on the market or put into service after 9 December 2026. Under Article 8(2), anyone who substantially modifies a product outside the manufacturer’s control and then makes it available on the market is considered a manufacturer of that product. For refurbishers and remanufacturers this makes the position explicit. The text is available on EUR-Lex.

Next to product liability, ordinary contract law applies. A product you sell must meet the agreement, which in consumer sales is set out in Article 7:17 BW. A buyer of a used or refurbished product may expect less than from a new one, but the product must still have the qualities the buyer may reasonably expect. Clear descriptions of what has been replaced, tested and guaranteed prevent disputes.

How do you manage that risk in practice?

Record what you did to each product: which components were reused, which were replaced and which tests were carried out. That record is your evidence if a product fails. Material passports, which track the origin and composition of components, serve the same purpose.

In business-to-business contracts you can agree how liability is divided between the supplier of used components, the remanufacturer and the seller. Such clauses work between the parties, but they do not affect the rights of an injured third party. Check as well whether your liability insurance covers refurbished products, as some policies are written for new production only.

Who owns a product that you lease instead of sell?

In principle you do, as long as the product remains a separate asset. Once it becomes a component of a building or of another item, ownership can pass to the owner of that building or item through accession (natrekking).

A component (bestanddeel) is something that is regarded as part of the main item by common opinion, or that is so connected to it that it cannot be removed without significant damage (Article 3:4 BW). Under Article 5:20 BW the owner of the land owns buildings and works that are permanently attached to it. Under Article 5:14 BW a movable item that becomes a component of another movable item belongs to the owner of the main item.

This is a real hurdle for product-as-a-service models. A supplier that provides lighting, lifts, solar panels or facade elements on a pay-per-use basis wants to remain the owner, so that it can take the items back at the end of the contract. If the items become components of the building, that ownership is lost, whatever the contract says.

How can you keep ownership of installed products?

There are three common routes. The first is technical: design the products so that they can be removed without significant damage, which supports the argument that they are not components. The second is a right of superficies (opstalrecht) under Article 5:101 BW, which allows a party other than the landowner to own buildings, works or plants in, on or above the land. It must be created by notarial deed and registered.

The third route is contractual. A take-back obligation, a purchase option at the end of the term or a buy-back arrangement gives you a claim against your customer. A claim is weaker than ownership, however, because it does not protect you if your customer becomes insolvent.

What happens if your customer goes bankrupt?

If you are still the owner, you can claim your products from the bankruptcy trustee. If you have lost ownership through accession, you are an ordinary creditor with a claim for the contract price or damages.

There is one further risk to consider. The Dutch Tax and Customs Administration can in certain cases recover a debtor’s tax debts from goods of third parties that are on the debtor’s premises (the bodemrecht under Article 22 of the Collection of State Taxes Act 1990 (Invorderingswet 1990)). Whether this affects your leased products depends on the type of goods and the arrangement, so it is worth having this checked before you place high-value equipment with a customer. When you sell with deferred payment, a retention of title clause under Article 3:92 BW keeps ownership with you until you have been paid.

What should you arrange in a circular contract?

A circular contract must settle ownership, maintenance, the residual value of the products, take-back and what happens on termination or insolvency. A standard sales contract or standard general terms do not cover these points.

In a product-as-a-service contract the supplier usually remains responsible for maintenance and repair, because it benefits from a long product life. The contract should state who pays for damage caused by improper use, who insures the products, how the fee is adjusted if usage changes and what condition the products must be in when they are returned.

In supply chains that use secondary materials, specification clauses matter. Recycled content can vary in quality, so you should agree which standard applies, how deviations are measured and what the buyer can do if a batch does not meet the specification. Where you depend on a single supplier of residues, agree on volumes and duration, because that also supports the by-product assessment described above.

Be careful with sustainability claims towards consumers. Misleading environmental claims can be an unfair commercial practice under Articles 6:193a and following BW, and the Netherlands Authority for Consumers and Markets (ACM) actively enforces these rules. The EU has also tightened the rules on generic environmental claims. Only make claims you can substantiate with evidence.

Can public procurement help your circular business?

Yes. Public authorities may award contracts on the basis of the best price-quality ratio and include circular criteria, under the Public Procurement Act 2012 (Aanbestedingswet 2012). They are not obliged to buy circular products, but the Dutch government pursues a policy of circular procurement.

For suppliers this means that tender documents increasingly ask for information on reuse, recycled content, repairability and take-back. If you can document these features, you can score better on quality. If you think a tender unfairly excludes circular solutions, raise questions during the question-and-answer round, because objections raised only after the award are often too late.

Which permits do you need for circular activities?

That depends on what you do on site. Collecting, storing, sorting or processing waste is an environmentally harmful activity under the Environment and Planning Act, and may require an environmental permit or a prior notification.

The general rules for these activities are largely set out in the Environmental Activities Decree (Besluit activiteiten leefomgeving). Municipal environmental plans (omgevingsplannen) can also restrict where certain activities may take place. If you want to add a repair, recycling or remanufacturing line to an existing plant, check at an early stage whether your current permit covers it, because a new or amended permit can take months.

What steps should you take now?

Start with an inventory of your material flows and their legal status. For each flow you need to know whether it is waste, a by-product or a product, because that determines your permits, transport rules and contracts.

Then review your product documentation and your liability position, especially if you refurbish or remanufacture. For lease and service models, decide how you will keep ownership, and have your contracts and general terms adjusted accordingly. Finally, check your environmental permit before you change your activities on site.

None of these steps has a single statutory deadline, but timing still matters. Permit procedures and assessments of waste status take time, and the new product liability rules apply to products placed on the market after 9 December 2026.

In summary

• Whether material is waste depends on whether you discard it, not on its value; by-product and end-of-waste status each require four conditions to be met.
• As a producer you are liable for defective products, and anyone who substantially modifies a product can be treated as its manufacturer.
• Products fixed to a building or another item can become the property of the owner of that building or item through accession.
• Circular contracts must cover ownership, maintenance, residual value, take-back and insolvency.
• Check your permits under the Environment and Planning Act before adding repair or recycling activities.

Frequently asked questions

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