Incentives aim at addressing market failures that prevent or delay the transition towards circular products, services and solutions. They play an instrumental role in pricing negative externalities, steering markets towards sustainability and driving behavioral changes. Incentives have the ability to create value, de-risk investments and improve the competitiveness of value chains that bring net environmental benefits when compared with linear economies. They also yield benefits to the economy and society. This guidance document aims to support public authorities in identifying the most suited incentive or combination of incentives to speed up the transition towards a circular economy at national, regional or local level. As these incentives target different market failures or barriers; their type, combination, associated costs and infrastructure of implementation, temporality or scope; their relevant level of enforcement will inherently vary.