The application of hydrogels in wastewater treatment has significant promise for addressing environmental concerns and promoting the principles of sustainability and the circular economy. This paper analyses the legal framework and policy consequences of using hydrogel technology, focusing on its advantages, difficulties, and the required support systems for advancing environmental sustainability and circular economy concepts. Regulatory frameworks are crucial in promoting the acceptance of hydrogel technology in wastewater treatment. The safety and effectiveness of hydrogels are ensured by adhering to standards and guidelines for their manufacturing, usage, and disposal. The policy implications for increasing the use of hydrogels in wastewater treatment involve providing incentives for research and development, such as funding possibilities and tax incentives, to encourage innovation and technological progress. By implementing policies that encourage the use of hydrogel-based wastewater treatment systems, companies can be motivated to adopt these systems, leading to the closure of the resource loop and contributing to a more sustainable and circular economy. The establishment of regulations and policies regarding the use of hydrogels in wastewater treatment is crucial for advancing environmental sustainability and supporting the concepts of a circular economy.