Circular Economy Trade Finance Global Market Report 2025

The circular economy trade finance market size has grown rapidly in recent years. It will grow from $12.0 billion in 2024 to $14.02 billion in 2025 at a compound annual growth rate (CAGR) of 16.8%. The growth observed during the historic period can be attributed to several factors, including stronger global commitments to sustainability and climate goals, the widespread adoption of circular business models by corporations, rising demand for resource-efficient supply chains, the expansion of eco-friendly projects, and the growing issuance of green bonds and sustainability-linked loans.

The circular economy trade finance market size is expected to see rapid growth in the next few years. It will grow to $25.76 billion in 2029 at a compound annual growth rate (CAGR) of 16.4%. The growth projected for the forecast period can be attributed to increasing awareness among businesses and consumers regarding environmental impacts, the expansion of global trade activities, stronger government policy support, and the rise of digital transformation alongside regulatory frameworks promoting sustainability. Key trends expected during this period include the integration of digital technologies, enhanced cross-border collaborations, innovation in financial products and business models, and technological advancements in climate risk assessment tools.

The expansion of global trade is fueling the growth of the circular economy trade finance market due to increasing cross-border economic activities. Global trade growth is expected to drive the circular economy trade finance market in the coming years. Trade involves the buying, selling, or exchange of goods and services between individuals or entities. It is increasing as globalization expands market access and enables businesses to connect more efficiently with consumers and suppliers worldwide. Circular economy trade finance supports trade by providing funding mechanisms that encourage resource reuse and recycling, thereby reducing costs and improving sustainability throughout supply chains. For instance, in March 2025, the United Nations Conference on Trade and Development, a Switzerland-based intergovernmental body, reported that global trade reached a record high of 33 trillion dollars in 2024, reflecting a 3.7 percent increase, equivalent to 1.2 trillion dollars in growth. Therefore, global trade expansion is driving the growth of the circular economy trade finance market.

Key companies operating in the circular economy trade finance market are focusing on developing advanced approaches such as sustainable finance taxonomies to guide investments toward projects that deliver measurable environmental and social benefits. Sustainable finance taxonomies are frameworks that classify economic activities based on their contribution to environmental, social, and governance sustainability goals. For instance, in May 2025, the International Finance Corporation (IFC), a United States-based international financial institution, introduced the Harmonized Circular Economy Finance Guidelines. These guidelines assist investors, financial institutions, and private enterprises in identifying and assessing opportunities to channel funding into circular economy initiatives. They provide clear criteria for qualifying activities and transactions, promoting global harmonization and market alignment. Building on frameworks such as biodiversity, blue finance, and green bond taxonomies, they broaden the range of eligible assets and encourage private investment in sustainable development. Notably, these guidelines are the first to define and measure eligible transaction amounts while maintaining alignment with the European Union Categorization System and the ICMA Green Bond Principles.

In September 2025, Bank of Baroda (BoB), an India-based public bank, collaborated with the Small Industries Development Bank of India (SIDBI) to introduce the BoB Earth Circular Economy Scheme (MSE Spice) under its Green and Sustainable product category. This collaboration supports micro and small enterprises (MSEs) in adopting sustainable practices that align with India’s climate and sustainability objectives. It also enhances Bank of Baroda’s green finance portfolio while reinforcing SIDBI’s commitment to offering inclusive and sustainable credit for MSMEs. Small Industries Development Bank of India (SIDBI) is an India-based financial institution.

Major players in the circular economy trade finance market are Bank of America Corporation, Citigroup Inc., JPMorgan Chase & Co., Wells Fargo & Company, BNP Paribas S.A., MUFG Bank Ltd., HSBC Holdings Plc, Deutsche Bank AG, ING Groep N.V., The Goldman Sachs Group Inc., UBS Group AG, State Bank of India, Commonwealth Bank of Australia, Mizuho Financial Group Inc., Barclays PLC, Crédit Agricole S.A., Société Générale S.A., Intesa Sanpaolo S.p.A., UniCredit S.p.A., Standard Chartered Plc, ABN AMRO Bank N.V.

Europe was the largest region in the circular economy trade finance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in circular economy trade finance report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.

The circular economy trade finance market research report is one of a series of new reports that provides circular economy trade finance market statistics, including circular economy trade finance industry global market size, regional shares, competitors with a circular economy trade finance market share, detailed circular economy trade finance market segments, market trends and opportunities, and any further data you may need to thrive in the circular economy trade finance industry. This circular economy trade finance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

Circular economy trade finance is a financing model that supports sustainable trade by promoting resource-efficient and environmentally responsible economic activities. It emphasizes the reuse, recycling, and recovery of materials within supply chains to reduce waste and environmental impact. By aligning financial processes with circular economy principles, this approach encourages longer product lifecycles and more sustainable trade practices.

The primary forms of circular economy trade finance include trade finance credit, guarantees and letters of credit, leasing and asset financing, and supply chain financing. Trade finance credit provides short-term funding tailored to transactions operating under circular economy models. It can be delivered through on-premises or cloud-based systems and is applied across sectors such as manufacturing, retail, energy, automotive, and consumer goods. This financing approach is utilized by various end users, including financial institutions, corporations, and industry participants.

The countries covered in the circular economy trade finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The circular economy trade finance market includes revenues earned by entities by providing services such as green trade credit facilities, circular procurement funding, eco-friendly export-import financing, and carbon footprint-linked financing. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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