In this paper we analyse transition towards circular economy as a complex adaptive system focusing on the market and behavioural barriers. We investigate the conditions for successful introduction of a new production which is appropriate for a circular economy, ‘circular’ product with a focus on the contribution of underlying demand-side behavioural factors. To do that, we develop a heterogeneous agent model in which consumers are modelled to choose between two varieties of a consumer good/service in the market: a ‘circular’ product/service type and a ‘non-circular’ t type. The results and methods developed in this paper is applied to a use case of recycling of rubbers in the Netherlands.