Enabling the Circular Food Economy Through Industry 4.0: A Review of Applications, Challenges, and Policies in the European Union

The transition to a circular economy (CE) is a critical strategy for improving the sustainability and resilience of the global food system. Industry 4.0 (I4.0) and its associated digital technologies offer a powerful means of accelerating this transformation. This systematic review provides a comprehensive analysis of the synergy between I4.0 and the CE within the European Union's food supply chain, integrating technological applications, implementation barriers, and policy frameworks. Key I4.0 applications are reviewed across the CE hierarchy, including artificial intelligence (AI)-driven demand forecasting and precision agriculture for waste prevention, machine learning-optimized bioprocessing for valorizing by-products into food-grade ingredients, and blockchain and the Internet of Things for enhancing traceability and transparency in circular flows. However, the transition faces significant barriers. Technological challenges include a lack of interoperability and data standards. Economic hurdles involve high initial investment costs and uncertain returns on investment, particularly for small- and medium-sized enterprises (SMEs). Furthermore, managerial and organizational inertia stems from a digital skills gap and resistance to change, while social concerns relate to consumer acceptance, data privacy, and digital equity. Synthesizing these findings, this review articulates a "policy-technology nexus," arguing that a successful digital-circular transition is a sociotechnical challenge. The analysis demonstrates that EU policies must evolve from merely promoting technology to acting as system architects. This requires aligning digital infrastructure with market-shaping mechanisms to create the collaborative ecosystems necessary for a widespread and equitable transition. Finally, a research agenda is proposed focusing on technological integration, innovative business models, sociotechnical studies, and the governance of a just and ethical transition.