The sense and sensibility of the circular material use rate: a case study of EU's key circularity indicator

The Circular Material Use Rate (CMUR) has become a flagship indicator for monitoring progress towards a circular economy in the European Union. Promising in its conceptual simplicity, CMUR is widely employed in policy evaluations, international comparisons, and national target-setting. Yet despite its prominence, the indicator has been subject to limited empirical scrutiny. This paper examines the performance and interpretive validity of CMUR through a case study of Iceland, an economy characterized by high levels of imported materials, large-scale aluminum production, high percentage of renewable energy, significant biomass flows, and substantial domestic extraction of rock, sand and gravel. Based on a calculation of Iceland’s CMUR for 2024 and six policy-relevant scenarios—those being transport-related fossil fuel phase-out, increased recycling of household waste, food-waste reduction, material-efficiency measures in cement use, sufficiency scenarios for electronics and textiles, and all measures combined—the analysis shows that CMUR exhibits limited responsiveness to core circular economy interventions in this particular case. In some scenarios, such as food-waste prevention, CMUR decreases when environmental performance improves. The paper identifies one main structural reason for this behavior: the overwhelming dominance of a few inert and/or structurally non-circular materials in domestic consumption. To address this, the paper explores a contextualization of CMUR by modifying the boundary conditions for those materials. The findings highlight the importance of contextual interpretation when CMUR is used to evaluate circular performance and to inform policy. The analysis further suggests that similar interpretive challenges may arise in other European economies with comparable material-flow structures.