This article discusses the regulation of ‘substances of concern’ in the circular economy (CE) in the European Union (EU). It analyses the tensions and obstacles that the present sectoral separation of waste, product and chemicals legislation sets for the development of the CE. We argue that in a longer term perspective the aim should be to erase the border between waste and chemicals regulation and create a single regime for the regulation of materials and their flow. However, the eventual aim of such non-toxic material circulation can be achieved only via precautious transitional measures that outweigh the costs and benefits of each material flow and set restrictions for the particular substances of concern. Regulatory actions addressing the risks posed by the substances of concern in the waste-based material flows are urgently needed. New measures are necessary to protect human health and the environment and to support the development of the markets for the secondary materials.