The rapid increase in population size (the global population has quadrupled over the last century!) – goes hand in hand with an increasing demand for raw materials- but our supplies are finite. A circular economy will enable economic growth without an increased consumption of raw materials, energy consumption and pollution.

We have to be smarter with our resources that we need for food, water, shelter, clothes and electrical products. Around 65 billion tonnes of raw materials entered the economic system in 2010, a huge number which is expected to continue to increase (Ellen MacArthur Foundation, 2013 – “Towards the Circular Economy”). A circular economy will reduce our demand for raw materials by reusing the ones we have. Moreover, it will reduce our dependence on other countries for raw materials. This then also reduces carbon emissions through minimising transportation, as well as reducing the impact on the environment by reducing the energy required to extract and consume resources.

Greenhouse-gas emissions are also reduced by reusing renewable inputs in the primary production as much as possible, which maximises the utilisation and performance of a product. Manufacturers could also offer additional services such as maintenance and upgradability of the product, shifting the ownership away from the consumer and towards the manufacturer.

Various reports have analysed the potential of the circular economy.

• As such, the Ellen MacArthur Foundation estimated that a subset of the EU manufacturing sector could save $380-630 billion annually in material costs towards 2025, depending on the advancement of the scenario (Ellen MacArthur Foundation, 2013 – “Towards the Circular Economy”).
• In the construction sector – where about 40% of GHG emissions originate in material production – it has been estimated that up to 99% in greenhouse-gas emissions could be saved per functional unit with innovative slowing resource solutions, such as material reuse and product refurbishment. Closing resource solutions, such as upcycling, have the potential to reduce emissions by 30-50% per functional unit, but this depends on how efficient recycling is and how far the transportation distances are (Gallego-Schmid et al., 2020).
• In a study comparing traditional with bio-gas based circular economic models of pig farming, it was found that such a circular model could reduce the carbon emissions in a single pig farming unit in China by 3 million tonnes. The circular model used pig excretions to generate biogas. This reduction could generate an economic benefit of $30.92 million (Xue et al. 2019).
• Chemical recycling of monomer plastics could potentially reduce emissions by 4.3 kg of carbon dioxide per kg treated PET packaging waste (Meys et al., 2020)

A circular business model acts on many different levels that all work towards one goal: producing zero waste, eliminating pollution and closing the loop.

This has consequences for every step of the production process, starting from the raw materials used for the product, how the materials are transformed to create the product, the infrastructure, equipment and services required to create the product, how the product is consumed and what is done at the end of its lifetime. At the end of the product’s lifetime, it could either be returned to a state where the materials can be used to create another product, or depending on the nature of the materials, returned safely back into the environment.

In addition to the use and reuse of the raw materials that make the product, the energy resources used are clean and renewable, such as wind or solar energy [internal link].

One big element of a circular system is the collection and subsequent reuse of products (or their components/materials). Across different industries, roughly 25% of products are collected after use (Ellen MacArthur Foundation, 2013 – “Towards the Circular Economy”). Current recycling processes typically use so-called ‘loose’ or long cycles where the materials are broken down to a large extent. In a circular economy, however, the focus will be on repairing, refurbishing and remanufacturing before breaking down the materials, which can be an energy-consuming process that is not always necessary.

A circular business is a win-win for everyone, where prices for raw materials can be significantly reduced, new jobs will be created, the impact on the environment is alleviated, and moreover: the consumer benefits too. When the product design is adjusted to last longer, this will bring down total ownership costs. If a product consists of multiple components that can be tailored, such as different components of a mobile phone, there will be more choices that can be based on what is convenient for the consumer. There are also secondary benefits if products are more than just designed for their primary functioning – such as packaging options that are not only zero waste, but that can serve as fertilisers or contain seeds for flowers.

Promoting a circular economy does not only have to be initiated by companies but has to be done by consumers, too. There are many concepts that all contribute to creating a circular economy, that can be implemented by anyone. Here, we list the many key processes, starting with the classic “reuse, reduce and recycle” and explain the differences between them.

• Refuse – refuse waste, such as non-recyclable products.
• Rethink – rethink if you really need the product, and if you do – could you take over a second-hand item or borrow it from someone in the neighbourhood?
• Reduce – reduce purchasing products that you don’t need, or that are harmful, wasteful and/or non-recyclable.
• Reuse – think twice before you throw something away – can you reuse the item?
• Repair – fix something before you decide to throw it away and purchase a new item. Don’t know how to fix it yourself? Repair shops and communities are becoming more and more common, check out if there’s help available in your neighbourhood.
• Repurpose – just because a product was designed to be used in a particular way, doesn’t mean you can’t use it for different purposes. Get creative, upcycle used items to give them a second life.
• Recycle – if you have gone through all previous R’s, then the best way to dispose of waste is through recycling if possible. Check prior to purchasing the product if the item, or what parts of it, can be recycled.

The world is currently only 8.6% circular in 2021, whereas in 2019 it was 9.1% (Circularity gap, accessed November 2021). To ensure the world continues to be liveable by reducing carbon emissions, we need to get to at least 17% circularity. Most of the greenhouse-gas emissions come from building houses (13.5 billion tonnes of emissions/year), which could be reduced e.g. through recycling raw materials, using more lightweight and regenerative materials rather than cement and steel, and shifting to renewable energy. Secondly, agriculture and aquaculture are responsible for 10 billion tonnes of emissions annually, which can be reduced by e.g. switching to plant-based diets and using regenerative agricultural practices to increase yields.

A circular economy can only be promoted in practice, if graduates are trained to understand how business models can be changed, policies are adapted by governmental agencies to accommodate and promote circular businesses, and research and innovation are needed on social, technological, and commercial levels (Stahel 2016).

A big milestone to overcome is the convenience of disposal of products at the end of their life, and the low costs associated with this compared to collecting and recycling materials. Therefore, collection points are needed for both users of products and their manufacturers to take, bring or buy back discarded products. Waste has to become available to make the supply chain economically viable, which will mean that resources will circulate differently through space and time. To ensure that recycling processes do indeed lead to lower carbon emissions, recycling has to be done locally, close to its collection point.

A report conducted in 2016 shows that in European countries, there is a contribution of roughly 4.4% in Croatia – 17.1% in Italy (11.7% in the EU in general) of recycled materials to the demand for raw materials (Eurostat – check out their website for other info on European countries regarding generation and recycling rate of waste per country).

Even though the principles of a circular economy indicate a clear benefit towards the planet and the people, every advantage has disadvantages. Critiques of a circular economy argue that the potential benefits of a circular economy can be overstated, as all the different definitions and requirements to be circular is too hard to understand and assess. As matter cannot ever be created or destroyed, it makes it impossible to recycle products and materials indefinitely, without any waste.

Another argument is that there is a lack of addressing the social dimensions to a circular economy. There will be socio-economic benefits of a circular economy, such as the creation of new jobs in new waste management and recycling facilities. But, the quality of such opportunities has not been discussed yet at all, such as the reward levels associated with them, nor the geographical distribution of such benefits at regional, national, and international levels (Jones & Comfort, 2017).

One aspect of the circular economy is that the ownership of products is reduced, and the focus shifts to the service itself and the functioning of the product. As such, products can be leased as opposed to owned by the consumer, which ensures that the manufacturer creates a product that is durable rather than focussing on selling quickly in large quantities. But how does this shift in ownership affect the consumer and how does this impact the environment?

Zink and Geyer presented the concept of a circular economy rebound in 2017, which occurs when circular economy activities actually increase production overall. This could be because secondary goods, made up of substitutes of the primary goods (e.g. recycled plastics), might be of insufficient quality and are less desired. Another way that the circular economy could rebound is when increased secondary production (reusing/recycling/remanufacturing raw materials) impacts prices – if the price of secondary products is lower, this might lead to producers making more materials to create more products, and if they are of lower quality they might have to be sold at lower prices to the costumers, too. As a result, more goods get produced, sold, and used. For example, a consumer could save money on a product through optimising its usage and/or if the product is made of secondary items but then allocates this saved money to activities or other products that then harm the environment again. Also, good incentives and lower costs could make a consumer choose a product over the more environmentally product that they were using in the first place, such as car-sharing over a bike.

To see how circular economy rebound could work in practice, a study was conducted in 2018 to see if carbon and material footprint is reduced if people would rent products rather than buy. They found that reduced ownership does not automatically reduce the environmental impact of a production-consumption system. Reduced ownership did not have any influence on the material footprint, and only had a mild positive implication on carbon footprint but only in low-income households. It seems that only if one is constrained by a budget and then might therefore face trade-offs, reduced ownership slightly decreases a household’s carbon footprint. On the other hand, owners with high ownership of products and assets seem to be willing to invest voluntarily in energy-efficient housing and vehicles, reducing carbon emissions. These results imply that if we all shift towards a society where products are rented rather than owned, this only has a minimal impact on carbon and material footprint.