New CIRCLE Act Offers 30% Tax Credit for Recycling Plants, Phasing Out After 2032

The “Cultivating Investment in Recycling and Circular Local Economies Act of 2025”—or the CIRCLE Act—is a major push to boost America’s lagging recycling rates. Right now, the country is only recycling about 30% of its waste, far short of the 50% national goal set for 2030. This bill attempts to bridge that gap by offering a substantial tax break to companies willing to invest in recycling infrastructure.

The 30% Investment Kickstart

At the core of the CIRCLE Act (SEC. 3) is a brand-new tax incentive: the Recycling Property Investment Credit. If a company builds, reconstructs, or buys new “qualified recycling property”—essentially, the machinery and facilities needed to process materials—they can claim a credit equal to 30 percent of that investment. This is a direct reduction in their tax bill, not just a deduction. To sweeten the deal further, if the equipment meets specific domestic content requirements, the credit jumps to 40 percent. This is a clear signal that Congress wants both more recycling and more American-made recycling equipment.

This credit isn't forever, though. It starts strong, but it begins to phase out in 2033. Investments made in 2033 only get 80% of the calculated credit, dropping to 60% in 2034, 40% in 2035, and eventually hitting zero for property placed in service after 2036. If you’re a business owner looking to upgrade your facility, the clock is ticking to get the full benefit.

The Real-World Trade-Off: Basis Reduction

Here’s the catch for investors, which is important for any business owner or finance person to know: you can’t double-dip on the tax breaks (SEC. 3). If you claim the 30% credit, you must reduce the tax basis of that property by the exact amount of the credit claimed. For the non-accountants, the tax basis is the value you use to calculate future depreciation deductions. If you take a large credit now, you’re essentially trading future depreciation deductions for an immediate, large tax reduction. This means the overall financial benefit is slightly less than a straight 30% credit, as you forego some tax savings down the road. It’s a classic tax policy trade-off.

Defining What “Recycling” Actually Means

Beyond the tax credit, the CIRCLE Act tightens up the definition of what counts as recycling, which has real implications for certain industries (SEC. 3). The bill explicitly excludes using waste primarily as fuel, for energy generation, or for incineration. This means companies involved in “waste-to-energy” operations, which burn trash to generate power, won't qualify for this specific investment credit. The goal here is to push investment toward true material recovery—making new products from old ones—rather than just burning waste.

Furthermore, the definition of “qualified reuse and recyclable materials” is expanded to specifically include video display devices and computer devices. This is a big deal for the growing challenge of e-waste. It means that companies investing in facilities designed to strip down and reuse components from your old laptops and flat-screen monitors will now qualify for the 30% tax credit, potentially boosting the infrastructure needed to handle the massive volume of discarded electronics.

What This Means for Everyday Life

If this bill works as intended, the main impact for regular folks will be a significant increase in domestic recycling capacity. This could stabilize the supply chain for recycled materials, potentially lowering costs for manufacturers who use them. For instance, if a company that makes plastic packaging can source high-quality recycled plastic locally, they might be less exposed to global price spikes for virgin materials. The focus on e-waste could also mean more convenient and effective options for getting rid of your old electronics, rather than letting them gather dust in a closet or sending them to a landfill. Essentially, the CIRCLE Act is a targeted economic incentive designed to make it cheaper and easier for businesses to invest in the infrastructure needed to manage our waste better.