Transition Towards a Circular and Resource-Efficient Economy: An Artificial Intelligence Perspective

The transition from a linear to a circular, resource-efficient economy is crucial in order to address the growing scarcity of resources, environmental degradation and the rapid increase in electronic waste and end-of-life products. Artificial Intelligence (AI) has emerged as a key enabling technology, capable of enhancing decision making, automation and optimization across Circular Economy (CE) pathways, including reuse, remanufacturing and recycling. This perspective paper presents a comprehensive and critical overview of AI’s role in supporting the transition to a circular, resource-efficient economy, introducing the Digital CE Architecture (DCEA-4) as a novel framework for integrating AI across the circular value chain. Recent advances in machine learning, deep learning and data-driven optimization are analyzed in the context of electronic waste and used battery management. This highlights how AI-based solutions can improve material recovery rates, reduce environmental impact and enhance system-level efficiency. Additionally, we examine major challenges concerning data availability, model generalization, industrial deployment, and explainability, together with relevant industrial case studies. Although AI offers substantial potential for optimizing circular resource systems, its environmental benefits must be balanced against the computational energy demands of large-scale AI models. This perspective discusses the potential rebound effects associated with AI deployment and emphasizes the importance of energy-efficient algorithms and sustainable digital infrastructures. By bringing together current developments and highlighting future opportunities, this paper aims to help researchers, practitioners and policymakers leverage AI to speed up the transition to sustainable, circular and resource-efficient systems.