Innovation
How circular supply chains are transforming the cosmetics industry
Key takeaways
The beauty industry generates 120 billion packaging units annually, of which only 9% are recycled.
EU regulations are accelerating the shift toward recyclable, refillable and low-impact formats by 2030.
Brands like Lush, L’Oréal and L’Occitane are already scaling closed-loop packaging and up-cycled ingredients.
Switching to recycled resin can reduce environmental impact by up to 60%.
Circularity extends beyond packaging, including raw materials, product design, logistics and end-of-life solutions.
The beauty industry has long been associated with glamour, creativity and self-expression. But behind the glitz lies a linear system that generates a lot of waste. Each year, around 120 billion units of cosmetics packaging are produced and 95% of them are discarded. Less than 9% are effectively recycled. Packaging alone makes up about 70% of the sector's total waste footprint source.
The case for circular cosmetics supply chains is no longer just about image. It is imperative from a business, regulatory, and environmental perspective.Consumers are not only demanding change, with 80% saying they would pay more for sustainable options, but they are already acting on it. Roughly 74% of beauty shoppers have shifted their purchases toward products they consider more eco-responsible. This demand is reshaping market dynamics.
EU regulation puts pressure on packaging waste
From 2025 onward, regulation is doing what marketing could not. The EU's Packaging and Packaging Waste Regulation (PPWR), which came into force in February 2025, mandates that by 2030, all packaging placed on the EU market must be reusable or recyclable. For cosmetics, the regulation sets material-specific quotas: 30% recycled content for PET packaging and 10% for other types of plastics. These obligations are accompanied by extended producer responsibility (EPR) schemes and fees tied to actual recyclability scores.
Additionally, the EU Green Claims Directive, adopted in 2024 with a grace period until 2026 (might be extended), now requires any environmental claim to be based on verifiable data, typically using lifecycle assessment (LCA) methodologies. Claims such as "eco-friendly packaging" or "sustainable formulation" will need to be substantiated, creating an urgent need for transparency.
These rules signal that brands can no longer afford to greenwash. Instead, they must show measurable progress.
Circular design already in action
Several major players are embracing the transition. L'Oréal Group has committed that by 2025, 100% of its packaging will be refillable, recyclable, reusable or compostable. As of 2024, it had achieved 32% recycled or bio-based plastic content. Innovations such as YSL's refillable perfume cartridges have cut packaging weight by 52%, improving both carbon footprint and logistics efficiency.
Lush is another notable case. Its "Bring It Back" program gives customers store credit for returning empty pots. In 2024, the scheme recovered 42.9 tonnes of plastic, equivalent to almost 1 million items, a 29% increase from the previous year source. L'Occitane's "Big Little Things" initiative recovered hard-to-recycle beauty components and removed 31 tonnes of cardboard from its holiday collection packaging in 2024.
Meanwhile, global efforts such as the Ellen MacArthur Foundation's Global Commitment are delivering measurable impact. Signatory brands have tripled their average post-consumer recycled (PCR) content to 14% of total plastic packaging since 2018. In 2023 alone, these changes prevented 3.2 million tonnes of virgin plastic production and avoided 3.4 million tonnes of CO₂-equivalent emissions.
Beyond the bottle: circularity in formulas and sourcing
Circularity is no longer limited to packaging. Cosmetics brands are now turning attention to ingredients and formulations. Up-cycled actives, derived from agro-food by-products such as coffee grounds, citrus peels or wine pomace, are growing fast. This market was worth $254 million in 2024 and is forecast to reach $400 million by 2032, with a CAGR of around 6%. Up-cycled ingredients help brands cut feedstock costs and reduce Scope 3 emissions while offering consumers compelling narratives about waste-to-value.
Academic reviews have shown that food-industry waste streams are rich in bioactive compounds with cosmetic potential. These materials, when up-cycled, can replace synthetic ingredients and significantly reduce environmental impact. Brands using these materials not only lower carbon emissions but also create a tighter, more circular ecosystem.
Devera has explored how ingredient choices influence carbon footprints in the beauty industry. See our article on Scope 3 emissions in the beauty industry to understand how sourcing decisions and product design shape total impact.
Where impacts happen: hotspots across the life cycle
Lifecycle assessment studies reveal where brands can make the biggest difference:
Raw material sourcing: replacing petrochemical ingredients with bio-sourced or up-cycled alternatives
Manufacturing: reducing waste and energy through efficient, modular processes and renewable electricity
Packaging: adopting mono-material designs, lightweight formats, and PCR resins; packaging can account for over 50% of cradle-to-gate emissions for some products
Distribution and retail: implementing reverse logistics for empties and in-store refill stations
Use phase: transitioning to biodegradable ingredients preventing water pollution or highly effective formulas that reduce product overconsumption.
End-of-life: designing packaging for recycling grades A through C under PPWR and aligning with EPR incentives
One meta-study found that switching to 100% recycled plastic resin can cut environmental impact by 42 to 60%, while using renewable energy in manufacturing offers an additional 9 to 17% reduction. This confirms that material substitution is one of the most powerful circular levers available.
For a deeper look into circular strategies in product development, read Devera’s insight on how product design enables the circular economy.
What this means for the future of cosmetics
Circular supply chains are not a trend. They are fast becoming a core business requirement. With regulations tightening and consumers already changing their behavior, brands that embrace circularity early will gain a strategic advantage. They will also be better positioned to comply with upcoming audits, EPR rules and environmental disclosures.
Initiatives like refillable packaging, up-cycled ingredients, reverse logistics and recyclable materials are no longer experimental. They are proven, scalable solutions that deliver on both climate goals and customer expectations. Brands that invest in this transformation are not just closing the loop, they are future-proofing their role in a resource-constrained, climate-conscious economy.
For guidance on how to evaluate the impact of circular packaging, visit Devera’s resource on sustainable packaging impact assessment.
FAQs
What is a circular cosmetics supply chain? A circular cosmetics supply chain designs out waste by reusing materials, incorporating recycled and up-cycled inputs, and enabling take-back and refill programs. It covers the full life cycle from raw material sourcing to end-of-life disposal.
Why is packaging such a big issue in beauty? Packaging accounts for around 70% of the beauty industry's total waste footprint. Most packaging is single-use and difficult to recycle. Refillable, recyclable and low-impact formats are essential to reduce this burden.
How does regulation affect cosmetic brands? Under the EU's PPWR, by 2030 all packaging must be recyclable or reusable. Cosmetics-specific rules include minimum recycled content (30% for PET, 10% for others). The Green Claims Directive also requires LCA-based proof for environmental claims.
Are up-cycled ingredients effective? Yes. Many food by-products contain antioxidants and active compounds beneficial for skin and hair. Up-cycled ingredients help reduce Scope 3 emissions while maintaining product efficacy.
Which brands are leading in circular cosmetics? L’Oréal, Lush and L’Occitane have launched large-scale initiatives ranging from refillable packaging to closed-loop return systems. Their efforts have already recovered thousands of tonnes of material and improved circular performance.
