Unleashing the Power of the Circular Economy

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The circular
economy aims
to address
resource
scarcity and
environmental
impacts
The circular economy as a new model
In a circular economy, the industrial system is restorative or regenerative by
design. Within the circular economy new business models are developed that
reduce the need for virgin raw materials. This is accomplished by rethinking
how production chains can become closed loops. The circular economy
aims to become a new paradigm that essentially changes the functions of
resources in the economy: waste material of one (industrial) process will be
input for another, and products will be repaired, reused and recycled. [17]
In the circular economy, as propagated by the Ellen MacArthur Foundation,
waste is minimised. This starts on the design table: in a circular economy a
product will be constructed in such a way that, at the end of the product’s
life, the materials, depending on the kind of material, would biodegrade in a
safe way or could be easily separated for reuse. [17, 22] The resources in endof-life
products are valorised for similar or new applications. Key aspect is
that material resources circle in short cycles (e.g. with little transportation, as
local as possible), in which the material is kept as pure as possible (in order to
ease the reuse) and the quality remains as high as possible over the longest
possible time. Current supply chains have become vulnerable to disruption. In
a circular economy resilience is built in through diversity: a production system
with many connections, including tailored and decentralised solutions. [31]
The circular economy recognises a biocycle and a technocycle with distinctly
different design criteria. In the biocycle, biomass returns into the biosphere
after product use - either directly or in a cascade of consecutive use. It
forms nutrients in the end-of-life phase, e.g. for the soil, without adding to
environmental pressures.
The technocycle contains inorganic products and materials such as metals
and plastics. These materials should stay in closed loops to ensure circular
use of non-renewable resources and to prevent potential pollution. This
requires a resource passport 4 , management and exchange of resourcerelated
information, end-of-life systems for flows of resources and products,
networks of material exchange and networks of collection. [32] In terms of
business models, the circular economy replaces the concept of a consumer
with that of a user. Unlike today, products are leased, rented or shared
wherever possible. [8. 22] In Figure 2 a schematic overview of the circular
economy is given.
4 A resource passport aims to disclose product information on the scarcity, toxicity and recyclability of
the materials in the product in order to close the resource loops. [24]
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