Transitioning to a Circular Economy in the Energy Sector: A Systematic Review of Sustainable Business Models and Green Financing Mechanisms

The energy sector’s transition to a circular economy (CE) is critical for achieving global decarbonization and resource security. The primary objective of this systematic literature review is to examine the co-evolution of circular business models (CBMs) and green financing mechanisms across the energy value chain. To achieve this, we synthesized 93 high-impact studies published between 2015 and 2024, which were retrieved from the Web of Science and Scopus databases. Using the 10R hierarchy as an analytical framework, this study identifies a strategic shift from low-order recycling to high-value circularity, such as rethink, repurpose, and remanufacture. We analyze the role of the EU Taxonomy, green bonds, and equity crowdfunding in de-risking circular investments, while highlighting the “transparency paradox” in second-life markets and the “efficiency-waste trade-off” in rapid technological turnovers. Our findings reveal that while digital catalysts like blockchain and AI optimize resource flows, their scaling is hindered by a lack of empirical validation and fragmented regulations. The review concludes by proposing a “regulatory-technical nexus” for future research, emphasizing the need for circular digital twins and standardized decommissioning protocols to bridge the gap between theoretical optimization and operational reality in the renewable energy sector.