Let's talk about: Circular Economy

The Circular Economy model has the ambition to transform “waste” in a concept of the past. For this purpose, the Circular Economy model proposes the search of solutions that keep the resources circulating in the economy, perpetuating its use to the limit of its capacity. Using the adoption of innovative business models, eco-innovation and eco-design, in a Circular Economy model the products are designed to enhance their utility and life cycle, and for this purpose, the products must present some specific features such as durability, easy maintenance, repairability and modernization. For this end, organizations should value business models that enable the communities to share and use their products through service solutions; that provide easy systems to resell products in good conditions; and/or that promote the production of new products with components from the old ones, through strategies that enhance value recovery, such as refurbish and remanufacturing.


Circular Economy vs. Linear and Recycling Economy - Source: Plan C Initiative

Nature was, is and will continue to be one of the main inspirations for human creations, some of which truly revolutionary. Circular Economy is a holistic model “resilient and restorative by intention”, where, as it happens in nature, “nothing is created, nothing is lost, everything is transformed” (Lavoisier's Law) ”. In this model, there is no waste: Instead, there are valuable resources (or nutrients as they are called in this model), and as such, their useful life cycle should be enhanced, extending the value that it can generate for societies (1).


In a Circular logic, through Eco-design and Eco-Innovation, the products are idealized to be durable and easily disassembled, for an easier and economical repair, modernization or reuse of the components, being injected in the economy continuously and cyclically. The use of renewable energies and the replacement of toxic components are encouraged, which in addition to being harmful at many levels, limit the potential for reusing materials. This way, it’s possible to systematically reduce the dependency on raw materials, the loss of resources with economic value, the volume of waste production and the production of negative externalities (2).


To enhance the transition to the circular model companies should promote and apply business models that optimize the utility of the materials and where products with technical features such as quality, modular design, durability, easy repair, adaptability and circularity are a competitive advantage. Some good examples of these models are the “Product as a Service”, the “Sharing Economy” and the “Second-Hand products”. (3)


Circular Economy is a holistic model “resilient and restorative by intention”


In the transition to the Circular Economy some key points must be taken into account, of which we emphasize:

Butterfly Diagram - Source: “Growth within” (2015) - Ellen MacArthur Foundation and McKinsey Center for Business and Environment

CIRCULAR ECONOMY - ASSUMPTIONS AND KEY POINTS (1)


1) “Design out waste” - As mentioned, in this model, the “waste concept” becomes increasingly obsolete. The products are designed to be of high quality, durable, shared and easy to disassemble, thus ensuring an easy and economical repair, maintenance, modernization, use optimization and even the use of its components for new purposes and industries.


2) Distinction between “biological and technical components (nutrients)” - As can be seen on the butterfly diagram in the image above, these two new concepts, aim to distinguish: the biological nutrients, made up of living organisms, are biodegradable and therefore, they can be used in a cascade system for multiple purposes (eg: paper, cork, cotton, etc.) or safely returned to the biosphere; and the technical components like copper and aluminium, which can be reused to their maximum capacity. The division between biological and technical cycles aims to ensure that each material is maintained in the appropriate cycle, maximizing the value generation. The closer the loop is to the user/consumer, the more the integrity of the materials is guaranteed and the lower the cost of the process (example: repair vs. recycling).


3) Green and clean energy sources - To add value to the circular system, the energy sources used in the several processes must increasingly be from renewable sources, that will allow a reduction of dependence on fossil fuels and the impact on the environment and public health.


The adoption of a circular strategy promotes advantages and opportunities for all actors involved, in particular for the organizations that implement it, enabling significant savings and opening doors to new business models and eco-innovations. The Circular Economy model seeks to generate value for all parties involved, instead of creating value for only one part of the system. As such, organizations must find solutions that allow them to be a positive force for the planet, instead of just being less harmful (effectiveness vs. efficiency) and begin to create real value for the societies, environment and living beings. (2)


In the European Union, this transition is already underway, with high economic, social and environmental benefits expected. Studies indicate that the transition to the Circular Economy model combined with the technological revolution could generate an additional value of more than € 1.8 billion for the European economy by 2030 and a reduction of about 48% in CO2 emissions (4).



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Author: Mariana Pinto e Costa (BeeCircular's Co-founder )

Contact us: beecircular.geral@gmail.com



Sources:

(1) Ellen MacArthur Foundation, Towards The Circular Economy: Economic and business rationale for accelerated transition, EMF, London, 2013

(2) European Environment Agency, Circular by design: Products in the circular economy, EEA, Luxembourg, 2017

(3) Ellen MacArthur Foundation, Towards The Circular Economy: Accelerating the scale-up across global supply chains, EMF, London, 2014

(4) Ellen MacArthur Foundation and McKinsey Center for Business and Environment, 2015, Growth within: A circular economy vision for a competitive Europe, EMF and McKinsey Center for Business and Environment, Isle of Wight.

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