Business innovation | Opinion

Circular economy on a roll

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Call for better design

The limits to what the circular economy could deliver seem endless – but there may be a danger in focusing on circularity for circularity’s sake

The circular economy bandwagon is starting to roll at speed, judging from a continuing flood of studies on the concept.

Most recently, the Aldersgate Group, which promotes business sustainability, published a new report that sets out what needs to be done to unlock the circular economy’s benefits.

The Aldersgate report specifically tags a more circular economy as the way forward for developed economies. Europe in particular imports most of its resources, either in raw form or already incorporated into products.

This means, the report notes, that rich countries are vulnerable to “resource price shocks as well as societal and environmental ‘externality’ costs”.

Efficient by design

The circular economy is centred on resource efficiency. Rather than dumping old mobile phones, for example, their elements – including gold, silver and copper among others – can be recovered and reused.

Some companies – such as Belgium’s Umicore, which used to have a smelter in the Congo – have already built global businesses out of such recycling.

But the circular economy concept goes further: it is really about design. Mobile phones should be made in the first place so at the end of their useful lives their constituent materials can be easily reclaimed and smoothly reabsorbed into the production of new phones.

Systems that sell

The design aspect of the circular economy extends to design of systems, which are arguably of equal importance to design of products for avoiding waste. Efficient collection and recycling systems are needed for a host of waste streams, and systems need to be designed in such a way to make it easy for the consumer to participate.

Recent experimentation with such ideas has so far mainly been small scale. Dutch company Mud Jeans – the Netherlands is a circular economy hotbed – leases rather than sells its products. After one year, the customer can opt to keep the jeans, swap them for a new pair, or return them to the company. In the latter case, the fabric is reused in new garments.

The broader idea is that instead of buying a product, the customer buys the function of the product, with the material ultimately going back into the production chain.


But here’s a note of caution: better collection systems and resource efficiency do not necessarily translate into broader sustainability.

Recycling of materials can take as much energy and water, or generate as many emissions, as extraction of raw materials. Circular economy approaches might boost resource efficiency in some sectors, but others will face technical challenges, even if they are able to set up efficient collection and recycling schemes.

Tyres for example, are banned from landfill in the European Union. Old tyres are collected and processed into crumb or powder, but this material is not of good enough quality to be reincorporated into new tyres. Instead it is used as a fuel in cement kilns, mixed with bitumen in road surfaces or made into rubber mats.

Virgin rubber therefore still has to be produced for new tyres, and though recycled material is used efficiently, it is not evident that it offers major environmental benefits.

The real challenge for the circular economy, if it is to be a step change in sustainability, could prove to be less the redesign of systems and products, and more the overcoming of technical limitations so that production and consumption loops really can be closed.

And while governments have done well to push recycling to the consumer level, they need to continually review policy frameworks so that they also support the further development of circularity.

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