The Policy Window: What EU Regulatory Changes Mean for Farmers Right Now
There is a particular kind of challenge that faces farmers in the mid-2020s: not the challenge of understanding that agriculture needs to change, but the challenge of navigating a regulatory environment that is changing faster than most farm businesses can comfortably absorb. The European Union is in the middle of one of the most significant overhauls of its agricultural and environmental policy framework in a generation. New strategies, revised directives, incoming legislation, and shifting subsidy conditions are all moving simultaneously. For a farmer trying to plan a five-year investment cycle, the picture can seem bewildering.
This essay is an attempt to cut through that complexity. Not to catalogue every policy development, but to identify the regulatory changes that are most material to the bio-circular transition right now, explain what they actually require, and make clear why the window of opportunity that is currently open is likely to narrow over the coming years.
The Architecture of Change: What Is Already Law
The starting point matters. The EU’s regulatory shift toward a more circular and sustainable agriculture is not a future plan. Much of it is already in force, and the requirements it imposes are already accumulating.
From 1 January 2026, all EU farms are legally required to record chemical pesticide and fertiliser use in electronic format, with records kept up to date within 30 days of each application, geospatially linked to specific fields, and accessible to national authorities. This is not a proposal. It is binding law. Farms that have not yet built digital record-keeping systems are already operating at a compliance deficit.
From 1 Jan 2026 all EU farms must maintain electronic records of pesticide and fertiliser use, geospatially linked to field maps (EU Sustainable Use of Pesticides legislation)
The CAP 2023-2027 framework has restructured how direct payments flow to farmers. At least 25% of direct payments are now reserved for eco-schemes: practices such as precision farming, carbon farming, organic management, and animal welfare improvements. This means that a significant portion of EU farm income is now contingent on demonstrating sustainable and circular practices, not simply on the number of hectares farmed.
The Packaging and Packaging Waste Regulation entered into force in February 2025, harmonising rules for secondary raw materials across the single market. For agricultural processors and food businesses, this creates both obligations and opportunities: obligations to demonstrate circularity in packaging decisions, and opportunities in markets for bio-based and recycled materials.
What Is Coming: The Circular Economy Act and Bioeconomy Strategy
If what is already in force represents one pressure, what is coming represents another: a set of structural changes to the regulatory architecture that will, over the next two to four years, redefine the rules of the game for anyone working in the agrifood and bio-based sectors.
The Circular Economy Act, with a legislative proposal expected in the third quarter of 2026, is the centrepiece. It aims to establish a genuinely functioning Single Market for secondary raw materials, doubling the EU’s circularity rate from its current 12.2% to 24% by 2030. For agriculture, the implications are significant. Digestate, currently classified as a waste residue in most EU member states and therefore subject to costly permitting for land application, could be reclassified as a bio-based product under the new framework. Portugal’s decision in May 2025 to reclassify digestate as a product rather than waste shows what this change would mean in practice: simplified permitting, lower costs, broader uptake, and a functioning market for a resource that today is chronically undervalued.
12.2% → 24% EU circularity rate target by 2030 under the Clean Industrial Deal, underpinned by the incoming Circular Economy Act (European Commission, 2026)
The November 2025 EU Bioeconomy Strategy, adopted by the European Commission, provides the broader framework within which the Circular Economy Act sits. It explicitly positions the bioeconomy as a driver of EU competitiveness and resilience, sets targets for the growth of bio-based industries, and for the first time formally recognises biogas plants as biorefineries producing multiple commercially valuable co-products, not simply energy generators. This recognition carries regulatory weight: it supports the case for full valorisation of digestate, biogenic CO₂, and biochar as products rather than residues.
On pesticides, the picture is more complex. The target of a 50% reduction in chemical pesticide use and risk by 2030, set under the Farm to Fork Strategy, remains on the books. EU data published in July 2025 showed that pesticide use and risk fell by 58% between 2018 and 2023 relative to the 2015-2017 baseline, suggesting the target is achievable. However, the primary legislation that was meant to make the target legally binding, the Sustainable Use Regulation, was abandoned in early 2024 under political pressure. The direction of travel is clear; the binding mechanism remains in contest. Farmers who have invested in Integrated Pest Management, cover cropping, and biological alternatives are ahead of the curve regardless of how the legislative debate resolves.
The Subsidy Signal: Reading the CAP Correctly
For many farmers, the most immediate and tangible expression of the regulatory shift is not in environmental legislation but in where the money flows. The Common Agricultural Policy, with a budget of 264 billion euros for 2023-2027, is the largest single lever in European agricultural policy. The direction it is pointing matters.
The current CAP cycle has introduced eco-schemes as a mandatory component of national strategic plans. These schemes reward practices directly aligned with the bio-circular transition: carbon farming, organic matter building, legume cover crops, reduced external inputs, integrated pest management. The 25% allocation to eco-schemes may increase in the next CAP reform. What is certain is that the principle of linking payment to practice is now embedded, and it is not going away.
EUR 264 billion CAP budget 2023-2027, with at least 25% of direct payments now linked to eco-schemes rewarding sustainable and circular practices
For farmers considering whether to invest in bio-circular technologies, the subsidy signal matters alongside the regulatory one. The CAP rural development pillar allocates 66 billion euros to investments in rural areas, including funding streams explicitly targeted at cooperation, innovation, and knowledge transfer. These are the instruments that, when properly designed, can help farms and communities access the circular infrastructure that individual operations cannot finance alone.
Carbon farming is an emerging revenue stream with direct relevance here. As the EU develops its Carbon Removal and Carbon Farming Certification Framework (CRCF), adopted as part of the Bioeconomy Strategy, farmers who can demonstrate verified soil carbon sequestration, through regenerative practices, reduced tillage, and cover cropping, will gain access to carbon markets as an income source entirely independent of commodity prices. This is still early-stage, but the regulatory foundations are being built now.
What the Window Means in Practice
The concept of a policy window, in the academic literature on regulatory change, refers to a period during which the combination of political will, institutional readiness, and public attention makes significant change possible. What makes this moment a genuine window for the bio-circular economy is not any single policy but the convergence of several: the Bioeconomy Strategy is adopted, the Circular Economy Act is being drafted, the CAP is actively rewarding circular practices, and the financial architecture of Horizon Europe is providing research and innovation funding through to 2027.
Windows close. Political priorities shift, budgets tighten, and legislative ambition gives way to implementation fatigue. The 2024 farmer protests, and the political response to them, showed how quickly momentum can be interrupted when the transition is perceived as imposing costs without adequate support. The lesson is not that regulatory ambition should be abandoned, but that the path from policy to practice requires the connective tissue of knowledge, support, and accessible funding that allows farm operators to make real decisions rather than theoretical ones.
For farmers, the practical implication is this: the farms and enterprises that begin engaging with the bio-circular transition now, that build the record-keeping systems that compliance will require, that access the eco-scheme payments available, that explore biogas or composting investments through cooperative models, that connect to the mentoring and cascade funding networks that projects like AGRI-BIOCIRCULAR-HUB are building, will be in a fundamentally stronger position when the regulatory framework tightens further. They will not be scrambling to comply. They will already be capturing the value.
Ukraine, Poland, Latvia: Different Windows, Same Direction
The policy window described above applies most directly to EU member states. But for Ukraine, the direction is the same, and the window is in many ways even more significant.
Ukraine’s path toward EU accession is creating a parallel regulatory convergence. As Ukrainian agriculture aligns progressively with EU environmental and food safety standards, the same principles that are reshaping farming in Poland and Latvia are becoming relevant in Ukraine, often with greater urgency because the transition is happening in compressed timeframes against the backdrop of reconstruction. Farmers, regional administrations, and environmental authorities in Ukraine who begin building bio-circular capacity now are not merely adapting to future EU membership requirements. They are building the infrastructure of a more resilient agricultural sector regardless of the pace of accession.
In Poland, the project partners from Poznan University of Life Sciences and regional agricultural bodies are helping farms navigate the eco-scheme landscape, connecting the academic knowledge of what circular practices work with the practical support that allows farms to access the CAP payments that reward them.
In Latvia, the AREI-led ecosystem is helping the country scale its biogas sector at a moment when the combination of the Bioeconomy Strategy’s recognition of biorefineries and the incoming reclassification of digestate creates genuine commercial opportunity for the kind of sectoral model that the Egg Energy facility represents.
A Moment That Will Not Last Forever
The bio-circular economy is not yet the default mode of European agriculture. The linear model still dominates, still shapes most farm investment decisions, and still defines most market incentives. But the regulatory environment is systematically removing its advantages: the ability to treat organic waste as a disposal problem rather than a resource, to use chemical inputs without restriction or accountability, to farm without regard for soil carbon or nutrient cycles. As these advantages are withdrawn, the economics of the bio-circular alternative improve in relative terms, year by year.
The farms, cooperatives, municipalities, and enterprises that understand this dynamic and act on it now will not simply be compliant in the future. They will be competitive. That is what a policy window means in practice: a period in which the costs of early action are lower than the costs of late adaptation, and the rewards of getting ahead are real and measurable.
The window is open. The question is whether the knowledge, support, and connections are in place to help enough farms walk through it.
This essay is part of the series Field of the Future: Essays on Biocircular Economy, published within the AGRI-BIOCIRCULAR-HUB project. Funded by the European Union under Horizon Europe (Grant Agreement No. 101186869). Data sources: European Commission Circular Economy Act consultation 2025; EU Bioeconomy Strategy 2025; Farmable EU regulatory tracker; European Commission pesticide reduction progress report July 2025; CAP 2023-2027 framework; EU Agriculture and Fisheries Council January 2026.