Circular Economy Implementation in the Electric and Electronic Equipment Industry: Challenges and Opportunities

Abstract

The circular economy (CE) encourages sustainability by shifting towards business models that prolong resource use. The quantity of waste generated by electric and electronic equipment (WEEE or e-waste) is rapidly rising and is one of the fastest-growing waste streams. Our paper explores the awareness, benefits, barriers, incentives, and implementation of CE in the electric and electronic equipment (EEE) industry in Slovenia and Croatia. In the theoretical section, we review the existing literature on CE, the EEE industry in both countries, and their policy frameworks for developing CE. Based on primary research through a survey and inferential statistical analysis in the empirical section, we investigate the implementation of CE in the EEE industry in both countries. This paper identifies which CE practices companies in the EEE industry implement, how company size affects CE implementation, how companies evaluate institutional support to CE, and their plans regarding CE. The results highlight some differences between the two countries. Drawing on the empirical findings, we determine key challenges and opportunities for increasing CE adoption in this sector and formulate some European suggestions for policymakers, industry practitioners, and researchers.

1. Introduction

Circular economy (CE) helps to protect the environment and promotes economic resilience and innovation, while encouraging more responsible production and consumption patterns. It is an economic system based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems [1]. It focuses on immediate financial benefits from decreased resource usage, better efficiency, and less waste. CE supports sustainability, which seeks long-term benefits for the entire economic, environmental, and social systems [2] (p. 83). CE can separate economic growth from resource use and consumption, making it a tool for achieving sustainable development [3] (pp. 3–4). It has been proven to positively impact the profitability and feasibility of manufacturing enterprises by creating additional value through the recovery of materials and assets that produce new income streams. It aids company growth by introducing new business ideas. It is critical for resource optimisation in the manufacturing sector, which includes methods like remanufacturing, recycling, and closed-loop production processes, reducing reliance on virgin resources and waste formation. Extended producer responsibility as a CE practice encourages manufacturers to be responsible for their products throughout their lives, including correct disposal, recycling, or reuse at the end of life. This helps them reduce landfill waste and build circular supply chains [4] (p. 3).

The circular economy (CE), which emphasises designing out waste, keeping materials in use, and regenerating natural systems, aligns closely with the United Nations Sustainable Development Goals (SDGs) [5]. The CE can accelerate progress across multiple SDGs by shifting from the traditional linear “take-make-dispose” model to a regenerative system. CE supports SDG 12 (Responsible Consumption and Production) by promoting resource efficiency, waste reduction, and sustainable product design. It also contributes to SDG 13 (Climate Action) through reduced emissions from recycling and lower energy consumption. In urban contexts, circular practices enhance SDG 11 (Sustainable Cities and Communities) via improved waste management and local repair economies. The CE also drives innovation and infrastructure development (SDG 9) and fosters inclusive economic growth (SDG 8) by creating green jobs in repair, remanufacturing, and recycling. Reducing raw material extraction supports SDG 15 (Life on Land) and helps limit waterway pollution (SDG 14). Circular approaches in manufacturing also minimise water use and contamination, advancing SDG 6 (Clean Water and Sanitation). Furthermore, circular models like product leasing and sharing platforms can improve access to affordable goods, supporting SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).

While academic research has laid the foundation for the circular economy, e.g., [6], global consulting firms are increasingly developing business models around measuring circularity. A key example is the Circularity Gap Reporting Initiative by Circle Economy and Deloitte, which has popularised the term “circularity gap” [7]. Although influential, the concept can be misleading by implying that the gap can be fully closed, overlooking constraints like entropy and material degradation [8,9]. Calls for “fully circular” economies often ignore these limitations. Scholars such as Cullen [10] and Figge et al. [11] argue that perfectly balanced closed-loop systems are unrealistic. A more practical approach involves gradually improving circularity through targeted policies and business strategies [12], building on existing practices thriving in specific sectors.

The volume of waste electric and electronic equipment (WEEE or e-waste) increased from 7.6 million tonnes in 2012 to 13.5 million tonnes in 2021 (+77.1%) in the European Union (EU). The overall quantity of WEEE collected rose from 3 million tonnes in 2012 to 4.9 million tonnes in 2021 (+65.1%). A considerable volume of WEEE is created and ends up in landfills without treatment. However, recovered WEEE increased from 2.6 to 4.4 million tonnes (+69.8%), whereas garbage recycled and processed for reuse rose from 2.4 million to 4 million tonnes (+64.8%) between 2012 and 2021 [13,14], which proves that CE implementation is increasing in this industry [15]. Globally, only a small percentage of total WEEE is properly collected and recycled. There is still a substantial difficulty in realising the potential environmental, social, and economic benefits of CE implementation within the electric and electronic equipment (EEE) industry. This highlights the critical need for appropriate support to CE practices to minimise environmental impact and maximise WEEE’s economic worth. Its proper management through CE practices can help prevent environmental pollution and reduce health concerns related to dangerous compounds, while recovering valuable materials that contribute to economic sustainability. The low percentage of correct WEEE recycling and the prevalence of improper disposal underline the need for enhanced CE techniques to capture these advantages better [16] (pp. 2–3).

The implementation of CE practices in the EEE industry brings a range of significant economic, environmental, and social benefits. Economically, adopting circular practices can reduce operational costs, increase sales and profitability, lower business risks, and create new revenue streams. Additionally, simplifying products and procedures contributes to greater efficiency. From an environmental perspective, CE strategies support compliance with existing legislation, minimise negative environmental impacts, enhance resource efficiency, and promote sustainability throughout the supply chain. These practices reduce waste and emissions and foster more responsible use of materials. Socially, CE initiatives contribute to building a stronger brand reputation and increasing its value, which can support entering new markets and expanding international business. CE initiatives also improve workplace health and safety while encouraging the development of innovative skills and knowledge within organisations [17] (p. 385). Integrating CE principles in the EEE sector offers comprehensive advantages that align with sustainable development goals and long-term business resilience.

The EEE industry is one of the most critical industries in Slovenia and Croatia. According to GDP share, export orientation, and profitability, this industry has enormous development potential in both countries. However, research to date has not addressed the challenges and opportunities for the development and growth of companies in this industry due to the implementation of CE practices. This paper aims to research CE implementation and its policy support in the EEE industry in Slovenia and Croatia. This research contributes to a better understanding of how CE practices are embraced and operationalised within this industry. It aims to provide policymakers, industry practitioners, and researchers with several important insights into the challenges and opportunities of CE implementation.

This paper is structured into six main sections. The introduction is followed by the literature review, which introduces CE’s relevance to the EEE industry. It addresses key CE practices, identifies barriers and incentives for their implementation, and highlights the role of policy support in promoting CE at the EU and national levels. This paper continues with the Hypotheses Development section, the Methodology and Data section, and the Results and Discussion section. It ends with the Conclusions section, summarising key findings, acknowledging limitations, and suggesting directions for future research.

2. Literature Review

2.1. CE Practices in the EEE Industry

The CE strives to keep goods, components, and materials at their peak utility and value. In the EEE business, cultivating a CE demands constantly reducing raw material input, boosting the use of secondary and substitute materials, optimising packaging, and improving take-back programs [18]. The life cycle of reused EEE includes waste collection, selection, reused EEE manufacturing, preparation for reuse, use, and final disposal [19]. During collection, WEEE is transferred from consumers or distributors to collection facilities. The selection procedure occurs at the collection area, where WEEE is tested for functionality and faulty components that must be replaced are identified. The process entails operating a conveyor belt and occupying the facility and land. The duration of the selection procedure varies according to the WEEE category. The following phase is reused EEE manufacturing, which results from preparing for the reuse activity required to make it functional. Economic value-based allocation considers repair-related costs such as transportation, energy, replacement components, trash disposal, and labour. The preparation phase entails manually disassembling broken components, checking functionality, cleaning with compressed air, and transporting and installing replacement components. In the final disposal process, new and reused EEE undergo the same treatments, including recovering and recycling valuable materials, with an equal recycling rate for each. The main steps in EEE remanufacturing operations are the collection of returned products, primary inspection and sorting, disassembly, inspection and grading, fault diagnosis and prognosis, reconditioning and repair, testing, and final remanufacturing, as well as controlled disposal of materials if necessary. The process starts with collecting returned merchandise. A primary inspection is then carried out to determine the product’s physical condition. Initial testing, such as resistance measurements and insulation checks, is used to identify electric or mechanical defects. Disassembly is not a simple reversal of the assembly process due to various degrees of degradation, missing components, and past product updates. The components are inspected for damage, and core and winding tests are run to discover problems. Inspection decides whether components can be reused directly, following repair, or disposed of. Reconditioning procedures vary depending on the component’s condition and failure style, with repairs or replacements performed as needed. After reconditioning, the components are reassembled. The final assembly of the products completes the process by ensuring that all components fulfil the required criteria. This complete strategy guarantees that goods are properly remanufactured, reducing waste and optimising component reuse [20] (pp. 4–5).

WEEE recycling is an essential aspect of waste management and material recovery. Creating a cost-effective and environmentally friendly recycling system necessitates identifying and quantifying valuable materials and hazardous compounds to better understand the physical characteristics of this waste and improve recovery to protect natural resources. The recycling process often begins with mechanical processing, which comprises three key steps: disassembling, upgrading, and refining. Dismantling is critical for all sorts of WEEE, seeking to segregate dangerous or valuable components for specific management. Following disassembly, the parts are physically processed, including shredding into small bits with crushers and grinders, followed by magnetic, eddy current, and density separation procedures to separate metallic and nonmetallic fractions. The final refining process uses various technologies, including hydrometallurgical, pyrometallurgical, electrometallurgical, and biometallurgical processes, often in combination [21].

Product-service systems (PSS) models provide an incentive to develop goods that emphasise durability, ease of maintenance, and upgradeability, while still being handled by the corporation, which remains the owner [22] (p. 8). Three PSS models are proposed: product-oriented models like after-sales services, maintenance, and repair; use-oriented models like leasing or sharing; and result-oriented models like pay-per-result [23] (p. 8). Furthermore, the PSS model allows for the reuse of products by various customers between contracts while reducing environmental effects, with maintenance and repair included in the model. This pushes businesses to improve the repairability of their products and streamline maintenance processes. Repairing or remanufacturing things for resale is easier, keeping a circular product loop [24] (p. 522). Promoting the development of efficient models is often achieved through legislative instruments such as eco labelling to influence consumers’ purchasing choices [23] (p. 19).

Reverse supply chain implementation for CE procedures includes product packaging, distribution and logistics, and material sourcing [18] (pp. 7–10). Closed-loop components and products derived from e-waste, recycled materials through upcycling and downcycling, energy and material recovery through proper disposal and recycling, single materials, component reuse, material recirculation, innovative materials, material substitution, bio-based materials, and resource conservation, which includes restoring, reducing, and avoiding raw material usage, are all essential concepts in circular materials. Printed circuit boards and copper are among the components and materials causing significant environmental difficulties in this industry. Goods recirculation, redistribution and resale through third parties, refurbishment and remanufacturing, reuse in manufacturing, supply chain complexity reduction, and reverse logistics are all essential parts of circular distribution and logistics. The CE strives to keep goods, components, and materials at their peak utility and value. In the EEE business, cultivating a CE demands constantly reducing raw material input, boosting the use of secondary and substitute materials, optimising packaging, and improving take-back programs. Blockchain technology facilitates supply chain alignment with CE norms by enhancing traceability and transparency. It can make information about the origin of a product, processes, and the parties involved in related transactions and logistics visible, traceable, and verifiable by all those in the supply chain, thus supporting the use of sustainability criteria for the selection of suppliers, materials, and products, as well as the design of more sustainable logistics networks and internal operations [25] (p. 6).

Recent studies, e.g., [4] (p. 82–83), examine CE from a macroeconomic perspective, emphasising the need to demonstrate good corporate collaboration practices to promote sustainable development, particularly through efficient waste exchange, which activates CE aims. For the same objective, based on the “polluter pays” principle, many directions are proposed in the field of extended producer responsibility (EPR) for WEEE: Combining funds to encourage EPR with those to design ecological products, including the second-hand market and remanufacturing companies in the EPR system to create a cascading cycle for WEEE, and developing a new business model with a supply chain that integrates product manufacture and composition with a reverse supply chain for WEEE recovery to enhance voluntary producer responsibility.

Handling ever-increasing WEEE necessitates the urgent need for sustainable treatment solutions, which are becoming a priority for governments, corporations, and communities worldwide. Industry 4.0 propels the manufacturing and remanufacturing industries into a new era of autonomous and intelligent information sharing, enabling businesses to create a digital footprint through sensors and monitoring of machines and equipment [26], [20] (p. 13). AI, IoT, Big Data, and blockchain are crucial technologies for WEEE management. Their use helps address difficulties such as the unknown quantity of WEEE, a lack of technological developments, and insufficient safety and health awareness [27] (p. 5). Artificial intelligence can be used to classify and detect WEEE. AI algorithms can analyse data from images/videos and extract useful information from cameras, whilst an automated sorting system can recognise and classify various forms of e-waste. Furthermore, AI can be used for forecasts by combining two or more modern technologies to estimate e-waste creation and reusable components, utilising historical samples and machine learning approaches [28] (p. 6). Innovative technologies, such as Internet-based WEEE systems and cloud computing, can be used in WEEE management to improve collection routes and lower transportation costs by utilising IoT technology. Internet-based waste solutions provide customers with a convenient and formal avenue for dealing with WEEE and managing and tracking their footprint. By using the Internet, Big Data, and smartphone applications, these solutions make recycling more convenient for customers and alleviate information asymmetry between consumers and recycling companies [29] (pp. 521–525).

2.2. Factors of CE Practices Implementation in the EEE Industry

Implementing CE strategies in a company necessitates managing complex internal and external factors, usually categorised into technical/technological, market/economic, social/cultural/public, and regulatory/political [22] (p. 35) [30] (p. 4). Internally, success depends on innovative product design prioritising recyclability, implementing product-as-service technologies that extend product lifecycles, and cultivating a culture that values sustainability at all levels. Effective implementation processes, operational openness, and technology integration are all essential for making circular efforts effective. Externally, the broader ecosystem can have an important role. Collaboration and partnerships with stakeholders, supplier involvement, and alignment on similar aims and values are necessary to develop CE frameworks. Furthermore, understanding customer demands and feedback, and boosting knowledge about sustainable consumption, increases demand for the CE framework. Encouraging sustainable practices requires increasing consumer awareness regarding sustainable consumption and motivating behavioural changes [31] (p. 58). Government policies, including harmonised rules, regulations, subsidies, and national circular plans, provide regulatory and financial incentives that encourage and sustain these activities [32] (p. 11). Economic aspects are a significant driver of sustainability. They involve finding ways to minimise waste and energy expenses while boosting competitive advantage by generating new income streams to increase profitability. By implementing CE practices, manufacturing businesses can drive their economic value by increasing efficiency, lowering costs, and developing new sustainable business models [33] (p. 3). Policy barriers pose significant challenges to implementing CE practices in the EEE sector. Waste management regulation can include complex standards that create bureaucratic obstacles for enterprises and national agencies with little technical capacity. Unclear and conflicting regulations often hinder the legal cross-border movement of used EEE for refurbishment or recycling. Additionally, illegal e-waste dumping at unauthorised sites harms compliant businesses and raises safety concerns. Weak enforcement of waste regulations creates unfair competition, while current tax systems fail to incentivise circular practices. Tax incentives, on the other hand, have a heterogeneous impact across financing sources, implying that policy design must carefully address these diverse effects on investment behaviour [34] (p. 169). Furthermore, existing policies do not sufficiently promote the design of resource-efficient and recyclable products. Another big impediment is a lack of financial resources. Financial factors, including a lack of capital, impede the companies’ transition to CE business models. Businesses, particularly SMEs, lack the resources to invest in the new technology, recycling infrastructure, and environmentally beneficial practices required for CE adoption. Businesses are also reticent to take on the financial risks of switching to circular models, which may include initial investments with uncertain returns. Finally, transitioning from selling items to selling services alters typical cash flow patterns, making investments even more crucial. Overcoming financial challenges necessitates a mix of private and governmental actions. Proper funds and incentives can encourage enterprises to adopt the CE economy and its environmental advantages [35] (p. 3). Cultural boundaries between consumers and companies also significantly impact the adoption of CE business models. For example, poor customer adoption and a preference for new products are why CE implementation progress has been slow. Consumers often do not act on their developing curiosity. Concerns about quality, social image, or simply a preference for new things are holding people back from CE practices. Regarding company culture, CE is frequently not integrated into strategy, mission, vision, goals, and key performance indicators, indicating that the concept has not yet become mainstream. Companies that operate in a linear business model have a more difficult time switching to CE practices because of their conservative supply chain structures. Managers may be cautious owing to perceived dangers, insufficient resources, or conflicting priorities. A lack of instruments for measuring achievement also discourages leadership commitment. Hesitant company culture shows that some organisations only discuss CE practices with sustainable development professionals and have little appeal in more influential departments like operations and finance. This may be due to a lack of customer interest and knowledge [36] (pp. 267–268). Technical barriers occur due to insufficient options for recycling certain materials or the sluggish implementation of existing technologies. Data exchange complexity and new skill requirements can further technically complicate things, especially for small enterprises [22] (p. 4). Technologies like IoT, AI, and blockchain allow for effective resource management and traceability across the product lifetime. Smart product design for easy disassembly and recycling, and advanced manufacturing technologies like 3D printing and modular design substantially impact the adoption of circular models [37] (pp. 4–12). Technological advancement allows manufacturers to reuse items and may provide more efficient material recovery. Currently, most repair activities are performed manually, but digital transformation can ease some tasks by integrating the complete ecosystem of electronic devices. The essential procedure is to develop a value chain to easily search and exchange products and components for new repairs and remanufacturing [38] (p. 60). Structural differences within the EEE industry—such as supply chain complexity, product lifecycles, competition, and regulation—play a crucial role in shaping circular economy (CE) uptake. Complex, multi-tiered supply chains make reverse logistics, transparency, and coordination challenging—especially for SMEs—hindering CE transitions [39]. Short product lifespans and rapid obsolescence, driven by technological updates and limited repair options, lead to high turnover and waste, reducing incentives for repairing or reusing devices [40]. Regulatory divergence across regions further complicates implementation, as firms struggle to navigate differing standards for sustainability and circularity [39]. B2B markets and industries with longer product lives are more conducive to circular models like remanufacturing and leasing [41].

2.3. EEE Industry Overview in Slovenia and Croatia

Slovenia has a strong export-oriented EEE industry, specialising in home appliances, automotive components, and electromechanical equipment. The largest share (over 50%) comes from the electric domestic appliances sector, dominated by companies like Gorenje-Hisense. Micro and small enterprises dominate Slovenia’s EEE industry. Of the 193 enterprises, 50% are micro and 29% are small businesses. Large corporations are less common (11%), while medium-sized companies make up the lowest group (10%) [42]. Slovenia’s top 10 EEE companies achieved a total turnover of EUR 4.936 billion in 2023 [43,44,45]. The Croatian EEE industry is heavily centred on manufacturing electric motors, generators, and transformers, with over 700 million euros in turnover in 2023 from that segment alone. The Končar Group dominates power generation, transmission, and railway systems. The Croatian EEE industry consists of 356 active firms, with micro-enterprises accounting for 66% of the total, followed by small enterprises (24%), medium-sized enterprises (7%), and large enterprises (3%) [46]. Croatia’s top 10 EEE companies totalled EUR 915 million in 2023 [47].

2.4. CE Policy Support in the EU, Slovenia, and Croatia

Regulatory policies substantially impact CE adoption by establishing legislation and acts, and providing funds and programs to promote sustainable practices. The EU aspires to develop a CE to make Europe cleaner and more competitive by implementing the CE action plan from 2020 [48], one of the primary components of the European Green Deal, Europe’s strategy for sustainability. The European Green Deal consists of a bundle of policy efforts that set the EU on the route to a green transition, with the ultimate objective of climate neutrality by 2050 [49]. The EU’s regulatory framework for CE, specifically the Waste Electric and Electronic Equipment (WEEE) Directive, considerably impacts the adoption of CE practices in Slovenia and Croatia. The WEEE Directive enforces extended producer responsibility (EPR), which holds producers responsible for financing the collection, treatment, and disposal of e-waste. This prompts producers to design more sustainable and easily recyclable products to minimise waste management costs. The Directive has an unrestricted scope and applies to all EEE, requiring enterprises to comply with recycling and waste management criteria for a wide range of products while encouraging the incorporation of CE principles into product design and lifecycle management. This offers a unified regulatory environment that supports adopting circular practices by guaranteeing that all enterprises within these countries comply with the exact requirements, lowering the likelihood of noncompliance and fostering fair competition [50]. The Ecodesign for Sustainable Products Regulation (ESPR), which entered into force in 2024, is the cornerstone of the European Commission’s approach to more environmentally sustainable and circular products. The ESPR is part of a package of measures central to achieving the aims of the 2020 Plan. The ESPR replaces the Ecodesign Directive 2009/125/EC and establishes a framework for setting ecodesign requirements on specific product groups. It extends the Ecodesign Directive in two ways [51]. Firstly, while the latter applies only to energy-related products, the ESPR broadens this scope to cover virtually all physical products. Only a few exemptions, such as food, feed, and medicinal products, apply. Secondly, the ESPR reinforces the range of ecodesign requirements that can be set for products, which can comprise requirements relating to durability, circularity, and the overall reduction of products’ environmental and climate footprint. The EU Restriction of Hazardous Compounds in Electric and Electronic Equipment (RoHS) guideline attempts to avoid the discharge of dangerous compounds such as lead, mercury, and cadmium during WEEE disposal. All products containing an electric or electronic component must adhere to these regulations. The guideline also promotes ecological measures, such as the recycling of electronic equipment [52].

Slovenia has identified CE as a strategic development priority [53,54]. It is included in critical national papers such as “Slovenia 2050 Vision,” “Slovenia 2030 Development Strategy,” “Smart Specialisation Strategy,” and “Slovenian Industrial Strategy 2021–2030” [55]. The “National Energy and Climate Plan” for 2030 includes the “Law on the introduction of devices for the production of electricity from renewable energy sources” (ZUNPEOVE), which was adopted in 2023 to enhance the share of energy from renewable sources and help meet decarbonisation targets [56]. Slovenian regulation on handling batteries and accumulators, as well as waste batteries and accumulators (the amendment to the regulation on WEEE), requires manufacturers who introduce these items into the Slovenian market to develop a waste management plan or engage in a joint management plan to demonstrate legal conformity. They might either collect waste or contact authorised collectors to fulfil their responsibilities. To comply with their obligations, they must submit a report on managing waste batteries and accumulators for the previous year by the end of the first quarter of the current calendar year [57,58]. The Corporate Income Tax Act requires that environmentally friendly taxes be collected for air pollution from carbon dioxide emissions (CO₂ tax), the use of lubricating oils and fluids, landfilling of WEEE, environmental pollution caused by wastewater discharge, and environmental pollution caused by waste disposal [59] (p. 8).

Croatia has taken early steps towards CE through regulations such as the Waste Management Act and Waste Management Plan 2023–2028 [60]. The Waste Management Act establishes targets for WEEE collection and treatment, ensuring businesses adhere to strict recycling and recovery rates. It stipulates that the yearly rate of separate collection of WEEE is at least 65% of the average mass of EE placed on the market in the preceding three years, or 85% of WEEE generated within Croatia’s territory. The Ministry of Croatia provides waste management incentives and subsidies that contribute to the established objectives for WEEE management through the waste priority order. Croatian Act on Renewable Energy Sources and High-Efficiency Cogeneration [61] establishes a framework for promoting the sustainable use of renewable energy and planning and promoting the production and consumption of electricity generated by renewable energy sources. Croatia’s goal is to reduce greenhouse gas emissions to conform with Croatia’s Energy Development Strategy until 2030 and contribute to the European Union’s goals, which are consistent with the EU’s international decarbonisation responsibilities.

The implementation of Circular Economy (CE) practices in the EEE industry is a complex, multi-dimensional process driven by the interplay of technological innovation, regulatory frameworks, supply chain dynamics, industry structural factors and socio-cultural factors—where digital technologies act as key enablers, but structural, financial, and behavioural barriers critically shape the pace and effectiveness of the circular transition.

2.5. Hypotheses Development

The regulatory framework influences the adoption of circular economy (CE) practices. Countries may differ in how actively they promote CE through legislation, funding, and awareness programs. In the EEE industry, which is highly regulated and resource-intensive, these differences can significantly affect how companies implement CE principles. Comparing Slovenia and Croatia provides insight into how variations in national policy, market maturity, and industry support the integration of CE practices at the company level. Hypothesis 1 explores whether there are significant differences in the level of integration of circular economy (CE) practices between Slovenian and Croatian companies in the EEE industry. The relationship tested compares the extent to which companies in each country have adopted CE practices, aiming to determine if national context influences CE implementation. For this purpose, we set the following null hypothesis and alternative hypothesis:

H1₀. 

There are no substantial differences in the integration of CE practices between Slovenian and Croatian companies in the EEE industry.

H1₁. 

There are substantial differences in the integration of CE practices between Slovenian and Croatian companies in the EEE industry.

Enterprise size can significantly influence the ability to adopt and implement circular economy (CE) practices. Larger companies typically have more financial resources, technical expertise, and organisational capacity to invest in CE-related innovations, such as eco-design, recycling systems, or sustainable sourcing. They are also more likely to face regulatory pressure and public scrutiny, motivating stronger environmental performance. In contrast, smaller enterprises may encounter resource constraints and lack access to information or technologies needed for CE implementation. Therefore, company size is often viewed as a key factor affecting the extent and depth of CE adoption in industries like EEE. Hypothesis 2 explores the relationship between enterprise size and the use of CE principles within the EEE industry in Slovenia and Croatia. It tests whether larger or smaller companies in Slovenia and Croatia differ significantly in how they implement CE practices, aiming to identify if company size influences the extent of CE implementation. For this purpose, we set the following null hypothesis and alternative hypothesis:

H2₀: 

There is no significant association between the size of enterprises and their integration of CE principles in the EEE industry in Slovenia and Croatia.

H2₁: 

There is a significant association between the size of enterprises and their integration of CE principles in the EEE industry in Slovenia and Croatia.

3. Data and Methodology

For comparison analysis, the sample was divided into Croatian and Slovenian enterprises. We intended to achieve a proportional number of micro-, small-, medium-, and large-sized companies in the EEE sector. The survey companies were selected using a systematic sampling technique. This sampling method entailed picking a random sample of enterprises from the population of Croatian and Slovenian EEE industry manufacturers. The sample was classified according to company size, geographical location, and years of operation. Within each category, a random selection of companies was made to provide equal odds of inclusion and prevent over-representation of dominant company sizes.

The primary sources utilised to identify the target respondents were the Database of Slovenian Exporters (SloExport) and the Croatian Digital Chamber of Commerce (HDK). The survey was conducted between April and November 2024. Various outreach approaches were used, including email communication, submissions through contact forms on company websites, and direct engagement via LinkedIn. Contacting management and production-level staff directly via LinkedIn yielded the best response rates. In the survey, we contacted target managers and practitioners involved in sustainability or sustainable business practices within companies, so no preliminary pilot study was necessary. Several respondents provided constructive input on the questionnaire, suggesting adjustments to enhance the clarity and relevancy of specific items. The survey was prepared using Google Forms, and it was anonymous and used multiple-choice questions to capture clear and categorical responses, such as the size of the company, country, familiarity with CE concepts and policies, CE initiatives applied, challenges encountered when adopting CE practices, and additional support options sought to improve CE integration (see Appendix A). Likert scale questions assessed attitudes towards the benefits of CE and future investments in CE initiatives, as well as assessments of the government’s support mechanisms and the extent to which CE policies are applied. Open-ended questions encouraged respondents to expound on their experiences and share qualitative perspectives, providing a greater knowledge of the industry’s difficulties and potential for CE practices. The survey was created with a particular emphasis on the CE concept, including basic principles like resource efficiency, waste reduction, recycling, and sustainable business models. By addressing these factors, the survey aimed to assess the existing state of CE practices in businesses and to identify challenges to its wider implementation. The survey results were categorised by country and then by company size. For each country, we first analysed the overall results, followed by the results for each question based on the firm size. After analysing the results for each country individually, we undertook a comparative study utilising inferential statistical methods—ANOVA, Pearson’s correlation coefficient, regression analysis, and the t-test to support or reject the set hypotheses 1 and 2. These methods provide a parsimonious and statistically robust approach since this research focused on observable variables, tested straightforward hypotheses, and did not require modelling indirect effects or latent constructs. They allow for clear interpretation and maintain adequate statistical power without the complexity or additional assumptions required.

According to the most recent data released for 2023 in the HGK database, the Croatian EEE industry consists of 356 firms. After gathering the sample companies and categorising them by size, the survey was distributed to a random sample of 280 companies. The total number of Croatian companies’ responses was 47, with a responsiveness level of 16.8%. Micro enterprises received the most responses (23), followed by small enterprises (13). Six medium-sized enterprises participated. Finally, large organisations had the lowest response rate, with only five enterprises participating in this study. According to the Slovenian Exporters Database (SloExport), there are 193 firms in the EEE industry. After gathering a sample of companies and categorising them by size, the survey was distributed to a random sample of 180 companies. The total number of respondents was 34, yielding a response rate of 19%. Like Croatia, micro businesses had the most responses (12), followed by small companies (8). Medium-sized and large enterprises came in last, with seven responders each. When considering the entire number of enterprises, the outreach rate was 93%, higher than Croatia’s 79%. This could be partly because Slovenian companies have a more substantial web presence, and contact information is more easily accessible.

4. Results and Discussion

The overall implementation of CE practices in Slovenia’s EEE business is strong, at around 74%. Figure 1 shows that the most common CE practices are energy efficiency measures and waste reduction strategies (25%), indicating that Slovenian businesses prioritise resource efficiency and cost savings. Material recycling and reuse programs are also widely adopted (19%). More sophisticated approaches are also being used, such as product redesign for lifespan (17%) and life cycle design for sustainability (8%). Furthermore, elementary procedures such as recycling and trash sorting are adopted significantly (10%).

Seventy-four percent of Slovenian enterprises are familiar with possible CE practices. However, only 44% of Slovenian firms are familiar with CE regulation. The findings show that, while Slovenian enterprises are more aware of CE practices, they lack a complete awareness of the precise regulatory frameworks enabling CE implementation. This could impact access to potential incentives or assistance programs associated with CE. The survey results show variations in familiarity with CE practices and country CE regulation across different sizes of Slovenian firms, as seen in Figure 2. Micro businesses are moderately familiar with CE practices (50%), but only 33% know the country’s CE regulation. Micro businesses may operate in niche markets or as suppliers, where they do not face the same level of external demand to demonstrate regulatory compliance. Small companies are more aware of CE practices than micro companies (63%), but only 38% are familiar with regulatory compliance. Small firms frequently focus on more fundamental concerns, such as maintaining profitability, without investing in compliance. Furthermore, medium-sized businesses are more familiar with CE practices (86%), indicating greater engagement than small and micro businesses. Despite modest knowledge of CE practices, familiarity with CE regulation remains low, at 43%. Large companies had the highest knowledge rate, with 100% of respondents aware of CE regulation. They were most familiar with regulatory compliance regarding CE (63%), which might be attributed to their increased visibility and higher pressure to align with CE principles and regulations. The results reported in Figure 2 show a link between firm size and CE awareness levels.

Table 1. Implementation level of CE practices in the Slovenian EEE industry by company size.

Company Size	CE Implementation Level	CE Example Practices
Micro	To a small extent	Waste separation and recycling, energy efficiency measures
Small	To a small extent	Energy efficiency measures, waste reduction strategies
Medium	To a moderate extent	Material recycling/reuse programs, product redesign for longevity
Large	To a great extent	Life cycle design for sustainability, product redesign for longevity

Source: Own research.

shows the levels of implementation of CE practices across different firm sizes, as well as the most used CE practices. As more advanced CE practices are implemented in larger companies, implementation levels tend to increase with firm size.

According to the survey, 42% of micro enterprises implement CE practices. The most commonly applied practices include e-waste sorting, recycling, and energy-saving measures. Implementing cost-effective and fundamental measures is unique to micro businesses, implying that they are beginning to integrate CE practices but still have limits. Small businesses experience a 67% increase in implementation and engagement with CE practices. They implement more advanced CE practices, including energy efficiency measures and waste reduction strategies, demonstrating a rising knowledge of CE compared to micro companies. Medium-sized firms had a moderate CE implementation rate of 88%, embracing more progressive practices such as material recycling/reuse programs and product redesign for durability. This degree of CE engagement indicates a strong commitment to sustainability, most likely owing to increased financial resources and capabilities. Large corporations are leading the way with a 100% CE implementation rate. By implementing holistic and more complex CE practices, such as life cycle design for sustainability and product redesign for longevity, they demonstrate their ability to invest more resources into innovation, most likely due to stakeholder expectations and market demands for more sustainable products.

Regarding resources and materials sourced from sustainable sources, the survey found that Slovenian enterprises performed moderately. Figure 3 depicts the percentage of materials and resources derived from recycled or renewable sources across firm sizes, demonstrating a growth trend similar to that shown in Figure 1, which shows CE implementation levels.

According to the survey, 42% of Slovenian micro companies in the EEE industry use 1–25% of secondary materials and resources from renewable sources, suggesting that most companies use primarily virgin materials. This could be due to a lack of financial resources or reliable vendors. Small companies performed at a moderate level, with 50% sourcing 1–25% of materials or resources from reused or renewable sources, highlighting a positive trend in adopting sustainable resources. Although small companies perform better than micro businesses, they will likely face obstacles such as a limited understanding of sustainable sourcing and a short-term focus rather than investing in long-term sustainability. Medium-sized businesses demonstrate a more substantial commitment to sustainable procurement, with 38% utilising 1–25% renewable sources and 38% using 26–50% sustainable sources. The results indicate that while some medium-sized businesses are still in the early stages of CE adoption, others are advanced in implementing these sustainable principles. In large firms, we see a combination of three groups, with 25% of companies using 51–75% renewable sources. Most large enterprises use 26–50% non-virgin resources (38%). The remaining large companies use a smaller percentage of sustainable sources (up to 25%). Large businesses are likely to perform better due to corporate sustainability plans and economies of scale, which allow them to demand sustainably sourced products without considerably increasing costs or investing in R&D to work on sustainable solutions.

In terms of financial benefits, more than half of Slovenian micro and small businesses answered that implementing CE practices has increased efficiency and benefited them financially. The results imply better overall awareness of CE benefits or that companies have been employing sustainable solutions for extended periods. Furthermore, 78% of medium-sized and large businesses recognise the financial and efficiency benefits of implementing CE practices. Large firms tend to receive higher benefits of such activities due to economies of scale, long-term investments, or improved efficiency due to R&D investments.

According to the survey results, overall knowledge about the CE among Croatian companies in the EEE industry is modest (51%). The lack of familiarity could be due to limited access to information, insufficient promotion of CE activities, or a concentration on traditional linear business models. However, just 30% of Croatian businesses in the EEE industry are familiar with the CE regulation. The lack of CE understanding is particularly troublesome in micro and small businesses, which face various challenges in implementing sustainable practices, such as inadequate financial resources.

Figure 4 depicts the most often used CE practices, which include recycling and waste separation (22%), energy efficiency measures (20%), and material recycling and reuse programs (20%). Furthermore, 16% of companies implement waste reduction methods. This demonstrates that they tend to embrace more fundamental and cost-saving approaches, which frequently need less structural change than other practices, as well as more advanced tactics like product redesign for longevity (16%) and life cycle design for sustainability (8%).

Companies of varying sizes exhibit notable differences in competencies with CE practices and country-specific CE regulations. According to Figure 5, micro businesses have the lowest level of expertise with CE practices, with only 35% of companies understanding them. Their familiarity with the country’s CE regulation is significantly lower, at 22%. Small businesses are getting more familiar with CE practices, with 46% of respondents aware of them, indicating that these companies are becoming more engaged with creative and resource-efficient activities. On the other hand, their acquaintance with regulations and policies remains low, at 31%. Furthermore, 83% of medium enterprises are familiar with CE practices, indicating significant growth compared to small and micro businesses. Thirty-three percent of medium companies are familiar with the country’s CE regulation, marking a transition period in which companies are actively adopting the CE concept and becoming more cognisant of regulatory needs. Large companies have the highest level of awareness of CE practices, with 100% of those respondents in the survey being aware of them. These companies demonstrated the highest familiarity with legislation and policies related to CE (60%), indicating that they are more likely to devote resources to understanding and implementing CE principles and maintaining compliance with regulations.

Figure 5 shows that, regardless of company size, familiarity with CE regulation is consistently lower than familiarity with CE practices. This may indicate a need for more outreach or education on regulatory compliance. The vast discrepancy between micro and large companies indicates resource and capability differences, with smaller enterprises most likely grappling with information access and execution.

The level of CE implementation in Croatian firms varies with company size, as shown in

Table 2. Implementation level of CE practices in the Croatian EEE industry by company size.

Company Size	CE Implementation Level	Examples of CE Practices
Micro	Not at all	Waste separation and recycling
Small	To a small extent	Energy efficiency measures and waste reduction strategies
Medium	To a moderate extent	Product redesign for longevity, material recycling/reuse programs
Large	To a moderate extent	Product redesign for longevity, life cycle design for sustainability

Source: Own research.

, where a massive disparity between large corporations, smaller, and micro businesses is evident. According to the survey results, just 26% of micro enterprises incorporate some form of CE practices, while most respondents do not apply any of them. Most of these companies stated segregating and recycling waste as their way of adopting CE practices into their day-to-day activities, while those who reported using CE practices to a minor extent employ material recycling, reuse programs, and energy-saving initiatives.

Small businesses outperform micro businesses in adopting CE practices, with 54% integrating CE techniques to some level, primarily through waste recycling. Aside from that, micro enterprises are employing efficiency methods and waste reduction strategies, demonstrating a rising knowledge of the benefits of CE compared to micro businesses. The survey found a moderate uptake of CE among Croatian medium-sized firms. More advanced strategies are also evident, such as product redesign for durability and material recycling and reuse programs, highlighting a greater capability among medium enterprises to implement CE principles, most likely due to better access to resources and knowledge than small and micro companies. Large firms, like medium-sized companies, use CE practices to a considerable extent. However, they focus on more innovative solutions, such as life cycle design for sustainability, to ensure long-term viability. Large organisations are typically better positioned to invest in CE efforts because of their higher financial and organisational capacity.

Figure 6 provides an overview of the proportion of resources and materials derived from recycled or renewable energy sources. According to the survey, just 22% of micro enterprises use 1–25% of secondary materials and resources from renewable sources. This indicates that these companies have limited capability, most likely due to financial or logistical constraints. Small companies display a slightly better result, with 35% sourcing 1–25% of materials or resources from reused or renewable sources. While a higher portion of their materials is falling to 1–25% compared to micro companies, the result is still low overall, suggesting that small companies face barriers in adopting renewable sourcing. Compared to small and micro businesses, medium-sized enterprises increased their use of recycled or renewable resources and materials. According to the survey, 50% of companies source 1–25% of their materials or resources from recycled or renewable sources, while 33% utilise 26–50%. Finally, 100% of the large companies use resources and products derived from recycled or renewable energy sources. They primarily source 26–50% and 51–75% of their materials responsibly. The survey results indicate that large companies may have better access to sustainable suppliers or reverse logistics integrated into their business processes.

Approximately 25% of Croatian micro and small businesses answered that implementing CE practices has increased their company’s productivity and profitability. Most micro and small enterprises disagree or are neutral, indicating that they are still in the early phases of CE integration and have yet to reap the benefits. A lack of clear evidence or awareness of the potential economic benefits of implementing such methods could also contribute to these outcomes. On the other hand, 80% of medium and large businesses saw benefits in adopting CE practices, showing that higher adoption levels can result in long-term financial gains and corporate efficiency.

We also asked companies to evaluate the CE government’s support. The results in Figure 7 show that most Slovenian and Croatian enterprises had no comment on the government’s support, implying that many businesses are uninformed of the various incentives and support programs to promote CE practices. The overall perception of government assistance mechanisms was evaluated as fair or poor, with the lowest percentage of respondents considering it favourable.

While incentives are in place to promote CE, they are limited and unfamiliar to many businesses. To increase adoption and competitiveness in global markets, governments could provide low-interest loans, tax exemptions, and greater grants, and they could make efforts to create knowledge about CE incentives, targeting smaller enterprises.

The companies were also asked how likely they are to increase investments in CE implementation. Figure 8 shows that Slovenian micro enterprises have an increasing possibility, at 58%, indicating that more companies realise the benefits of CE practices. Medium-sized businesses show a slight difference, with a probability of roughly 70%. Large enterprises in both nations are 100% likely to invest in CE projects in the future, most likely due to regulatory compliance and acknowledged benefits of CE practices. Forty-three percent of Croatian micro businesses are inclined to invest more resources in sustainable practices, which could be due to lesser financial benefits recognised during the early phases of adoption of CE business models.

The results show a consistent association between company size and future investments in CE activities. The likelihood of future investments in CE is most likely related to the advantages of such practices. In previous sections, we showed that micro and small businesses have fewer benefits since they implement fewer complex CE models within their financial and knowledge capacities, resulting in a short-term gain. Large organisations, on the other hand, deploy complex CE models that require higher expenditures. However, as a consequence, companies gain from lower costs, less reliance on primary resources, higher market competitiveness, loyal customers, and so on. External factors such as regulation, government subsidies, market developments, or changes in consumer behaviour may all impact future investments in CE practices. Governments should pursue increased EU funds for CE incentives. Through awareness campaigns or digital technologies, consumers should receive more attention and education on sustainable consumption, repairability, and WEEE recycling.

We used one-way ANOVA and t-test with two samples of equal variances to confirm or reject hypothesis 1, claiming that there are (no) substantial differences in the integration of CE practices between Slovenian and Croatian companies in the EEE industry. Pearson’s correlation coefficient and regression analysis were used to test hypothesis 2, claiming that there is (no) significant association between the size of enterprises and their integration of CE principles within the EEE industry in Slovenia and Croatia.

The calculation was based on survey-derived CE implementation level data. Total CE implementation level in Croatia was compared to total implementation level in Slovenia, with implementation variables set as “not at all” = 1, “to a small extent” = 2, “to a moderate extent” = 3, and “to a great extent” = 4. The test results are provided in

Table 3. One-way ANOVA results (single factor) for testing H1.

SUMMARY
Groups		Count	Sum	Average	Variance
Croatia		47	81	1.723404	0.726179
Slovenia		34	72	2.117647	0.834225
ANOVA
Source of Variation		SS	df	MS	F	p-Value	Fcrit
Between groups		3.066333	1	3.066333	3.975475	0.049618	3.961892
Within groups		60.93367	79	0.771312
Total		64	80

Source: Own research.

. The p-value of 0.049618 falls below the generally used significance level (p < 0.05). Based on this, we reject the null hypothesis (H1₀) and support the alternative hypothesis (H1₁), indicating statistically significant differences in the integration of CE practices between Slovenian and Croatian companies in the EEE industry.

In a two-sample t-test with equal variances, the implementation levels of Slovenian and Croatian enterprises were utilised as independent variables, and P(T < t) two-tailed was compared to the significance level (α = 0.05). According to the data in

Table 4. T-test results (two-sample assuming equal variances) for testing H1.

	Croatia	Slovenia
Mean	1.723404255	2.117647059
Variance	0.726179463	0.834224599
Observations	47	34
Pooled Variance	0.771312242
Hypothesised Mean Difference	0
df	79
t Stat	−1.993859447
P(T ≤ t) one-tail	0.024809142
t Critical one-tailed	1.664371409
P(T ≤ t) two-tail	0.049618284
t Critical two-tailed	1.99045021

Source: Own results.

, the p-value (0.049618) is slightly below the significance level (0.05), indicating that we reject the null hypothesis at the 5% significance level. The absolute t-statistic is 1.99386, somewhat greater than the critical t-value at 1.99045, supporting the rejection of H1₀. The results demonstrate a considerable disparity in the implementation of CE practices between Slovenian and Croatian companies in EEE industries and confirm the H1₁.

We used Pearson’s correlation coefficient and regression analysis to test hypothesis H2. Pearson’s coefficient demonstrated the strength and direction of the relationship between firm size and CE implementation level. A regression analysis was conducted to investigate the association between the company size and the level of CE implementation practices in Slovenia and Croatia. A measurement model was created to determine Pearson’s correlation coefficient to confirm the relationship between a dependent (Y) and an independent (X) value.

Table 5. Measurement model.

Company Size	X	CE Implementation Level	Y
Micro (1–9 employees)	1	Not at all	1
Small (10–50 employees)	2	To a small extent	2
Medium (51–250 employees)	3	To a moderate extent	3
Large (251+ employees)	4	To a great extent	4

Source: Own research.

shows the measurement model.

Table 6. Pearson’s correlation coefficient.

	Company Size	CE Implementation Level
Company size	1
CE Implementation level	0.768498287	1

Source: Own research.

reveals Pearson’s correlation coefficient r = 0.77, indicating a strong positive correlation. This explains why the CE implementation level tends to rise with larger company sizes and vice versa.

Regression analysis was performed to determine whether firm size predicts CE implementation and whether other variables, such as industry rules or company type, influence this association.

Table 7. Regression analysis results.

Regression Statistics
Multiple R	0.768498287
R Square	0.590589617
Adjusted R Square	0.585407207
Standard Error	0.575911655
Observations	81
ANOVA
	df	SS	MS	F	Significance F
Regression	1	37.79773546	37.79773546	113.9604	5.53021 × 10−17
Residual	79	26.20226454	0.331674235
Total	80	64
	Coefficients	Standard Error	t Stat	p-Value	Lower 95%	Upper 95%
Intercept	0.618116315	0.135148539	4.573607069	1.75 × 10−5	0.349109876	0.887122754
X variable 1	0.627637674	0.058793861	10.67522464	5.53 × 10−17	0.510611421	0.744663927

Source: Own research.

shows a correlation coefficient (Multiple R) of 0.7685, indicating a strong positive association between the independent variable (business size) and the dependent variable (CE implementation). According to R-squared, company size accounts for 59.06% of the variation in CE implementation. The adjusted R-squared accounts for the number of predictors in the model, and since there is only one predictor (business size), the difference is negligible. Statistical significance is shown in ANOVA in Table 7. The F-statistic was used to determine if firm size significantly explains the heterogeneity in CE implementation. A high value of 113.93 indicates that company size significantly impacts CE implementation. The significance of the F value (5.53021-17) is less than the p-value (0.05), suggesting that company size is a significant predictor of CE implementation. The p-value for firm size (X Variable 1) in Table 7 is less than 0.05, indicating that for every one-unit increase in firm size, CE implementation improves by 0.6276, holding everything else constant.

Using the F-test, we investigated whether the variability of CE implementation levels varies considerably among company sizes. The results in

Table 8. F-Test two-sample for variances.

	Company Size	CE Implementation Level
Mean	2.024691358	1.888888889
Variance	1.199382716	0.8
Observations	81	81
df	80	80
F	1.499228395
P(F ≤ f) one-tail	0.035989461
F Critical one-tailed	1.447728084

Source: Own research.

show that the F-statistic value (1.499) is greater than the F critical (1.4477), indicating that the variances are significantly different, while the p-value is less than 0.05, at 0.0359. Based on the results of the analysis, we rejected H2₀. We endorsed the alternative hypothesis (H2₁), claiming that there is a significant association between the size of enterprises in the EEE industry and their CE implementation level in Slovenia and Croatia.

Companies of varying sizes in Slovenia and Croatia confront specific challenges when adopting CE practices, and institutional support or incentives to encourage them to do so differ accordingly. As part of the research, these questions assisted us in understanding the specific difficulties and solutions that firms in the EEE industry need. Differences in financial resources, regulatory compliance, and stakeholder involvement are common causes of challenges across companies of various sizes.

Table 9. The most common challenges and support sought for CE implementation in Slovenian and Croatian companies in the EEE industry.

Company Size	Most Common Challenges	Additional Support Sought
Micro	Lack of resources/funding and lack of awareness/education	Financial incentives/tax breaks and technical assistance/training programs
Small	Lack of resources/funding and lack of awareness/education	Access to resources/materials and government subsidies/grants
Medium	Lack of awareness/education and resistance from stakeholders	Access to resources/materials and government subsidies/grants
Large	Regulatory barriers and resistance from stakeholders	Government subsidies/grants and technical assistance/training programs

Source: Own research.

indicates the most prevalent issues faced by Slovenian and Croatian companies, as well as additional support required, based on the company size.

Micro and small businesses face the most challenges, particularly regarding financial resources and funding, followed by a lack of awareness and education on CE. Without enough financial resources, businesses cannot invest in long-term solutions that often provide rewards. Conversely, a lack of awareness further impairs their ability to apply CE practices. To help overcome these obstacles, they tend to seek financial incentives such as tax breaks and government grants to invest in CE practices, as well as technical assistance and training programs to expand their expertise and understanding of CE concepts and their benefits. As the company grows, we notice how the obstacles evolve. Medium-sized businesses have more resources than micro and small businesses, but they frequently confront regulatory challenges and opposition from their stakeholders. Compliance with sustainability requirements can be complex and require government assistance, such as subsidies and grants, or greater access to sustainable goods and resources. Large companies, as opposed to medium and small businesses, are less likely to suffer financial hurdles or a lack of awareness. They are more likely to face opposition from stakeholders or to persuade investors or supply chain partners who are still unwilling to adopt CE methods. Regulatory challenges are similar to those of medium-sized businesses and require government assistance. Technical assistance and training programs may be used to help them integrate more complex solutions.

Slovenian micro and small businesses exhibit a relative lack of expertise with regulatory compliance, which influences implementation levels. This could result from regular modifications or extensions to CE-related rules, making it difficult for smaller businesses to keep up. Many companies find legal material too difficult to convert into the real processes required to comply with government laws. Smaller firms, like large businesses, frequently lack internal legal teams and the experience and resources to monitor legislative changes. There may be a lack of government-provided workshops since many enterprises prioritise business operations training over policy learning. Low involvement with regulatory organisations leads to decreased understanding of government support systems and missed opportunities to invest in more advanced CE solutions.

Slovenian enterprises have financial constraints because of the significant initial investment costs associated with migrating to CE models. Slovenian firms also face challenges in obtaining secondary raw materials and resources to develop energy-efficient infrastructure. As a result, they may be more reliant on imported raw materials and have less control over supply chains, leaving them more susceptible to price swings. If there are not enough recycling facilities for WEEE, many materials will wind up in landfills rather than being recycled. There may still be a limited market for secondary materials because most sectors prefer virgin resources over recycled materials due to cheaper costs and availability. Many consumers and businesses continue to choose products created from virgin resources; therefore, there are still misconceptions about the quality of secondary materials.

Croatian businesses are primarily hindered by a lack of awareness regarding CE procedures, particularly among micro and small businesses. Another barrier that Croatian enterprises face is limited financial resources and regulatory loopholes, making it more challenging to access sustainable sources and receive government support. The fact that 64% of respondents, primarily micro and small businesses, are unfamiliar with the CE ideas demonstrates a substantial obstacle to widespread implementation of practices. Low awareness reduces comprehension of circularity’s ideas and benefits, decreasing adoption of CE practices in Croatian businesses. Low familiarity with regulatory awareness results from low awareness, which leads to a lack of financial resources. According to the survey results, few corporations know the government’s incentives to promote sustainability.

A lack of funding is one of the most significant challenges to implementing CE standards in Croatian micro and small businesses. Transitioning from a linear business model necessitates thoroughly rethinking industrial processes and organisational structures, which small and micro companies struggle with. There is a learning cost to implementing CE practices, and some firms wait for others to invest first and progress up the learning curve. Lack of technical abilities is frequently associated with a lack of money and time for training to obtain the essential skills.

There is a significant disparity in awareness and execution of CE procedures between smaller and larger enterprises in Croatia. Because the Croatian EEE industry comprises micro and small businesses, adopting sustainable methods is a significant obstacle. Slovenia, on the other hand, is more sustainable, but it still faces regulatory challenges, investment expenses, and industry resistance. Micro and small businesses in both countries lack general awareness of CE practices, their benefits, and technical know-how for implementing such standards. This difficulty directly impacts the company’s degree of CE adoption, implying that specific steps must be taken to raise awareness, particularly among smaller businesses. Orientation activities, such as workshops bringing together all enterprises in the EEE industry, could provide opportunities to learn more about CE and discover best practices. Starting projects by identifying waste and carbon hotspots in present processes and designing plausible scenarios incorporating CE could provide firms with ideas on implementing sustainable practices. Raising awareness about the CE and its potential benefits can create a more favourable environment for implementing sustainable practices [62] (p. 11).

Educational initiatives should be undertaken to address the shortage of information and skills. Governments and corporations could work with colleges and technical institutes to obtain training in CE business models such as eco-design, circular infrastructure development, and sustainable materials. Open and transparent channels should foster Information sharing and collaboration throughout the sector. Using technological breakthroughs such as IoT and Big Data, organisations could have access to a broader range of information and data to track the environmental impact of their suppliers [27] (p. 5).

Both countries expressed limited familiarity with CE frameworks, implying that governments should implement greater communication methods to promote awareness. Governments should establish a long-term plan and increase surveillance and law enforcement to track the manufacturer’s obligation [27] (p. 10). Governments should encourage partnerships between large and small businesses, with large corporations funding CE practices in smaller firms. Building facilities such as material recycling factories and remanufacturing facilities could contribute to developing a secondary raw material market. Governments can help minimise import dependence by boosting access to resources and materials, making businesses more resilient to price swings. Material advances may help companies connect with their sustainability goals by funding research and development in the field of EEE. Fostering collaboration within the sector and regional collaboration between Slovenian and Croatian enterprises could help to innovate sustainable material sources and supply chains. A kind of industrial symbiosis could be achieved, in which e-waste from one industry provides raw material for another.

5. Conclusions

CE promotes resource efficiency, waste reduction, and product life extension by encouraging reuse, recycling, and remanufacturing. It reduces pressure on natural resources, lowers greenhouse gas emissions, and minimises environmental pollution. From a sustainability perspective, CE supports all three pillars: ecological sustainability by conserving raw materials and reducing waste and emissions, economic sustainability by creating new business opportunities, improving resource security, and reducing production costs and social sustainability by fostering innovation, green jobs, and more resilient local economies. The CE provides a practical framework for transitioning to more sustainable production and consumption patterns, aligning economic activity with the planet’s ecological limits.

The Electric and Electronic Equipment (EEE) industry relies heavily on critical raw materials, many of which are finite and sourced under environmentally and socially challenging conditions. Additionally, the rapid pace of technological advancement leads to short product lifecycles, resulting in vast amounts of e-waste—one of the world’s most complex and hazardous waste streams. CE reduces e-waste volumes and associated environmental harms, such as pollution and landfill overflow, by extending product lifespans, enabling repair, and improving recyclability. It helps companies meet these obligations. CE fosters design, production, and business model innovation (e.g., product-as-a-service), which can reduce costs and open new market opportunities. Efficient resource use also decreases production expenses. Growing awareness among consumers and investors regarding sustainability presses EEE manufacturers to adopt CE practices to maintain brand value and market competitiveness. The EEE sector contributes significantly to carbon emissions. CE approaches help reduce emissions by lowering material extraction, energy use, and waste incineration. The circular economy is beneficial and increasingly necessary for the EEE industry to ensure long-term sustainability, regulatory compliance, and competitiveness in a resource-constrained and environmentally conscious global market.

This paper sought to investigate the present level of CE implementation in Slovenian and Croatian companies in the EEE industry, examining the influence of legislative frameworks and identifying challenges and opportunities for companies in this industry. The findings provide significant insights into the drivers and challenges of CE implementation in this industry. Survey results show considerable disparities in CE implementation between Slovenia and Croatia, supporting alternative Hypothesis H1₁, which predicted significant differences in CE implementation between Slovenian and Croatian companies in the EEE industry. While both countries follow EU policies, Slovenia has a higher CE implementation level, notably among medium and large businesses, possibly due to higher awareness, tighter industry compliance, larger expenditures for sustainable innovation, and different structural industry elements.

The relationship between firm size and CE integration, as investigated in Hypothesis H2, demonstrated a definite trend, with larger organisations being more likely to integrate CE practices due to financial resources, regulatory duties, and availability of sustainable materials, thereby confirming the alternative H2₁ hypothesis. Micro and small businesses, on the other hand, have indifferent attitudes about CE investment, owing primarily to insufficient money, a lack of technical skills, and confusion about the benefits of implementing CE. This emphasises the need for appropriate financial incentives, open access to secondary raw materials, and targeted seminars to promote broader adoption among companies of different sizes.

This research identified numerous significant challenges, including insufficient awareness of government support incentives, a lack of technical expertise and skills, restricted access to sustainable resources, and expensive start-up expenses. The survey results also revealed that most businesses had ‘no view’ on government support, indicating a lack of communication regarding the incentives and support provided by the government and the EU. Furthermore, whereas medium and large companies stated a substantial likelihood of future CE investment, micro and small businesses remained indifferent, indicating a lack of financial support mechanisms and awareness of the benefits of CE business models. Slovenia and Croatia adhere to EU CE directives, significantly impacting moulding industrial practices. However, the understanding of CE laws and government support is still inadequate.

While Slovenia has an advantage in CE adoption over Croatia, both countries face distinct challenges. Analysing the circularity of the Slovenian economy in comparison to the EU-28 average reveals that Slovenia also lags in some categories. This is due to a lack of awareness of government programs promoting CE activities, limited funding alternatives in Slovenia, cumbersome administrative or legal procedures, compliance fees, and difficulties collecting financial resources. While Croatia has improved its waste management policies, additional effort is required to achieve EU recycling targets and hasten the CE transition. Croatia continues to landfill twice as much e-waste as the EU average, owing to poor waste sorting, collecting, and recycling.

To address these issues, we identify several opportunities for increasing CE adoption in both countries. Incorporating European CE directives into national legislation and action plan development indicates progress. However, assessing progress remains difficult due to a lack of standardised criteria. While the EU has set up some indicators, more work is needed to provide complete and consistent assessment methods. Governments should increase policy knowledge and streamline compliance procedures. New laws must be developed, public awareness must be raised, and investments in innovative technology must be made. Governments should also provide more financial aid through grants, tax incentives, and low-interest loans. Industry collaboration should be strengthened to build shared circular supply chains, expand access to secondary resources, and facilitate cross-sector alliances. Training initiatives and workshops should be implemented to improve knowledge gaps and offer organisations the skills needed to transform to CE, particularly for smaller companies. There is a potential for growth in comprehending CE laws, possibly through workshops, seminars, or online resources. The shift to a CE in the EEE business requires a comprehensive approach. To support it, governments should implement tailored measures. By aligning corporate strategy with CE principles, investing in innovation, and enhancing regulatory engagement, the Slovenian and Croatian EEE industry can become more sustainable, competitive, and resilient in the changing European and global market.

This research faced several limitations regarding sampling, response rates, and data collection methods. Although a systematic sampling technique was used to ensure proportional representation of companies by size, location, and years of operation, the response rates were relatively low, which may affect the generalisability of the findings. Micro and small enterprises were overrepresented in the final sample, while medium and large companies had lower participation, potentially skewing the results toward the experiences and perspectives of smaller firms. Additionally, the uneven availability of contact information, especially for Croatian companies, posed outreach challenges.

While the survey design incorporated quantitative and qualitative elements, the reliance on self-reported data and online methods (e.g., email, LinkedIn, contact forms) may have introduced selection bias, favouring more digitally active or sustainability-aware companies. Despite efforts to refine the questionnaire based on feedback, interpretation differences among respondents could still impact the consistency of responses. The survey provides valuable insights into CE practices in the EEE sector; however, the limited and imbalanced response sample suggests caution in generalising the results to the entire EEE industry in Slovenia and Croatia.

Expanding the sample size and employing mixed-method approaches, such as in-depth interviews or case studies, could provide deeper insights into company-specific CE practices in future research. Comparative analyses with other EU countries to better contextualise Slovenia’s and Croatia’s progress within the broader European circular economy landscape could additionally upgrade this research. Given the low awareness of CE policies and government support, future studies could investigate the effectiveness of specific policy instruments, such as grants, tax incentives, or training programs. There is also a need to develop standardised CE assessment tools and metrics for tracking progress across industries and countries. Furthermore, qualitative research could examine internal organisational factors influencing CE adoption, such as leadership attitudes, innovation culture, or supply chain collaboration. Future research could also focus more on micro and small enterprises, identifying relevant support mechanisms, such as financial incentives, technical training, and communication strategies, that could facilitate broader CE implementation and ensure inclusion of smaller companies in the transition toward a sustainable EEE industry.