Circular water and waste infrastructure is central to climate mitigation and resource security, and evidence-based tools increasingly shape how such systems are planned and regulated. This study asks whether regulatory quality is associated with circular performance across the European Union and what current trends imply for circularity targets. Using Eurostat, World Bank and OECD data, we forecast the EU circular material use rate to 2035 with linear trend, exponential smoothing and ARIMA models, and test that relationship across all 27 member states. The rate rose from 10.7% in 2010 to 12.2% in 2024, or 0.11 percentage points a year. Forecasts place it near 12.4% in 2030 and 12.8% in 2035, about 10–11 points below the doubling target, with the published target band (22.4–24%) lying outside the 95% prediction interval of every model at the 2030 horizon. Across member states, the simple correlation between regulatory quality and the headline rate is positive but weak. Because that rate is a ratio whose denominator contains domestic material consumption, we also test circular material use per capita, which does not condition on the denominator: regulatory quality is positively but modestly associated with it. In the primary specification, a log-linear regression of that measure on regulatory quality yields a slope of +0.49 log points per unit (heteroskedasticity-consistent 95% confidence interval −0.06 to 1.05; robust p = 0.079, classical p = 0.048; r = 0.38), rising to +0.66 (robust p = 0.005) once material throughput is held constant. Finland and Ireland remain below their predicted values and are not explained by material throughput alone. The findings are compatible with an institutional reading of the circularity gap, but the design cannot identify a mechanism or distinguish it from analytical or technological explanations. We therefore outline legal and procedural reforms, including circular procurement law, water reuse regulation, extended producer responsibility and accountable algorithmic evidence, as a prospective agenda for testing that reading.