Circular economy

A circular economy is an economic system intended to minimize waste and resource consumption by maintaining products, materials, and resources in use for as long as possible.

Unlike a predominantly linear economic model based on extraction, production, consumption, and disposal, a circular economy seeks to reduce resource extraction, extend product lifetimes, and recover materials for reuse, repair, remanufacturing, recycling, or other productive uses.

A simplified representation is:

$\text{Resources}\to \text{Production}\to \text{Use}\to \text{Reuse}\to \text{Recovery}\to \text{Further Use}$

The circular economy concept is associated with resource efficiency, waste reduction, sustainable production and consumption, and the conservation of natural resources.

Principles

Circular economy approaches generally seek to:

• reduce the use of virgin resources;
• design products for durability and repairability;
• extend product and material lifetimes;
• promote reuse and refurbishment;
• support remanufacturing;
• recover materials from products and waste;
• reduce waste generation;
• increase resource efficiency.

A simplified relationship is:

$\text{Product Design}\to \text{Longer Product Life}\to \text{Reduced Resource Consumption}\to \text{Reduced Waste}$

Linear and circular economy

A conventional linear economic model can be represented as:

$\text{Take}\to \text{Make}\to \text{Use}\to \text{Dispose}$

A circular economy seeks to replace or supplement this model with processes that retain products and materials within economic use.

$\text{Take}\to \text{Make}\to \text{Use}\to \text{Reuse}\to \text{Repair}\to \text{Remanufacture}\to \text{Recycle}$

The objective is not necessarily to eliminate all waste or resource extraction, but to reduce them while retaining the value and utility of products and materials.

Product life extension

Extending the useful life of products can reduce the need to manufacture replacement products and can therefore reduce associated material and energy requirements.

Common approaches include:

• maintenance;
• repair;
• refurbishment;
• upgrading;
• reuse;
• resale;
• remanufacturing.

A simplified relationship is:

$\text{Longer Product Lifetime}\to \text{Fewer Replacements}\to \text{Lower Material Demand}$

The environmental effect depends on factors including product design, energy use during operation, repair requirements, and the environmental impact of producing replacement products.

Reuse and sharing

Reuse involves using a product again for the same or a different purpose rather than discarding it after its initial use.

Sharing and product-service models can also increase the utilization of products.

A simplified relationship is:

$\text{Reuse or Shared Use}\to \text{Higher Asset Utilization}\to \text{Reduced Demand for New Products}$

Examples can include shared mobility, equipment leasing, resale markets, and product-sharing platforms.

Repair and refurbishment

Repair restores a product or component to usable condition, while refurbishment generally involves restoring or upgrading a previously used product.

These practices can retain economic value that would otherwise be lost when products are discarded.

A simplified relationship is:

$\text{Used Product}\to \text{Repair or Refurbishment}\to \text{Extended Useful Life}$

Remanufacturing

Remanufacturing involves restoring used products or components to a condition that allows them to perform a defined function again.

It can involve the recovery, inspection, replacement, rebuilding, and testing of components.

A simplified process is:

$\text{Used Product}\to \text{Disassembly}\to \text{Component Recovery}\to \text{Rebuilding}\to \text{Remanufactured Product}$

Recycling

Recycling involves processing waste materials into materials that can be used again.

A simplified representation is:

$\text{Waste Material}\to \text{Collection}\to \text{Processing}\to \text{Recovered Material}\to \text{New Production}$

Recycling can reduce demand for some virgin materials, although collection, processing, transportation, contamination, and energy requirements can affect its overall environmental benefits.

Circular product design

Circular economy strategies can begin during product design.

Design considerations can include:

• durability;
• modularity;
• repairability;
• upgradeability;
• disassembly;
• recyclability;
• use of recycled materials;
• reduced material intensity.

A simplified relationship is:

$\text{Circular Design}\to \text{Repairability}+\text{Durability}+\text{Recoverability}$

Design decisions can therefore influence the ability to retain products and materials in use after their initial ownership or service period.

Circular business models

Circular economy principles can be implemented through different business models.

Examples include:

• product-as-a-service models;
• leasing;
• renting;
• repair services;
• refurbishment;
• resale;
• take-back programmes;
• industrial symbiosis;
• sharing systems.

A simplified relationship is:

$\text{Circular Business Model}\to \text{Extended Product Use}+\text{Resource Recovery}$

In a product-as-a-service model, customers may pay for access to a product or its function rather than purchasing the product outright.

Industrial symbiosis

Industrial symbiosis involves cooperation between businesses in which waste products, by-products, energy, water, or other resources from one activity can become inputs for another.

A simplified representation is:

$\text{Industrial Process A}\to \text{By-product}\to \text{Input for Industrial Process B}$

This can reduce resource consumption and waste when technically and economically feasible.

Economic effects

A circular economy can affect economic activity through changes in resource use, production, consumption, investment, and employment.

Potential economic effects include:

• reduced dependence on virgin materials;
• development of repair and refurbishment markets;
• new business models;
• increased resource productivity;
• changes in supply chains;
• development of secondary-material markets.

A simplified relationship is:

$\text{Resource Efficiency}\to \text{Lower Material Intensity}\to \text{Higher Resource Productivity}$

The economic effects depend on technology, market prices, regulation, consumer behavior, and the availability of infrastructure for reuse and recovery.

Environmental effects

Circular economy strategies can contribute to reductions in resource extraction, waste generation, and certain environmental impacts.

A simplified relationship is:

$\text{Reduced Virgin Resource Use}+\text{Reduced Waste}\to \text{Potentially Lower Environmental Impact}$

The environmental benefits are not automatic. They depend on factors such as energy consumption, transportation, processing requirements, product lifetimes, and the environmental impacts of alternative production methods.

Limitations and challenges

The implementation of a circular economy can face several challenges, including:

• high collection and logistics costs;
• insufficient recycling infrastructure;
• difficulty separating materials;
• product-design constraints;
• contamination of recovered materials;
• limited markets for secondary materials;
• consumer preferences for new products;
• economic incentives favoring disposable products;
• energy requirements for recovery processes;
• regulatory and supply-chain constraints.

A simplified relationship is:

$\text{Circularity Potential}\to f(\text{Design},\text{Technology},\text{Infrastructure},\text{Economics},\text{Consumer Behavior})$

Consequently, circularity is generally a matter of degree rather than a binary condition.

See also

• Sustainable development
• Sustainability
• Resource efficiency
• Recycling
• Reuse
• Remanufacturing
• Industrial symbiosis
• Waste management
• Life-cycle assessment
• Sustainable consumption