Transition to a circular economy.

By Brosnar López Rodríguez. Edited: Bettina Renner

Have you ever considered recycling, reusing or repairing an item instead of buying a new one? Even following up on this idea, have you ever thought about where and what happens to items you no longer see used for and let go to waste?
In this context an idea that has gained attention and relevance in governments, companies, and people is circular economy. It describes an important shift in perspectives about resources, consumption and production. With a growing world population and an increasing waste generation it is crucial to question how to adopt circularity in our daily life and take advantage of it. The circular economy is theoretically simple, it is a model of production and consumption where existing products and materials are kept as long as possible, in this system, the goal is to reduce or eliminate waste by maximizing the reuse of resources (europarl, 2021). As a Mexican studying in Germany I was amazed by how advanced German society is in terms of “circularity”. You may think “advanced” is exaggerated, but let’s acknowledge that they are many steps ahead of many in terms of reusing products.

In México, when you buy products such as milk or a drink the consumer does not know what happens with the empty bottle or can. But not so in Germany, here the story is different. My first activity to set up my new life was getting supplies from the supermarket. That day I had my very first, big scale, encounter with real circularity. Due to the regulations more and more brands and companies offer a wide variety of products in bottles or packages which you can easily reuse or recycle. And more noticeable there is a bottle return system called Pfand (deposit) which means that when you buy products such as milk, yogurt, or beer, you pay a deposit for each bottle and when the empty bottle is returned, the customers get the money (deposit) back (allaboutberlin, 2021). The empty bottles are returned via a machine issuing you a “cheque” that you can exchange right away. More bottles reused, more money saved. This encourages people to return the bottles and allow the companies to reuse them. This experience is satisfactory because it goes beyond avoiding waste by reusing empty bottles. The customer experiences how the circular economy works, and even more, the customer can be part of this sustainable economic model by doing a simple and common activity such as buying a bottle of milk or beer.

Nature as role model for circularity
As figure 1 shows, in nature, everything is reused, everything has a function, even after death. For example, the plant that grows in the forest can be food for a rabbit and that rabbit can be eaten by another animal, if that animal dies, it can be food for bacteria in the soil and that bacteria become food for a new plant and so on. This process is known as a circular system, in which all the matter is continuously moving and transforming, but never becoming waste. However, in the case of human society, we design to use, not to reuse, this means that unlike nature, we live in a linear system of production and consumption. We take resources from nature to transform them into goods, use them and discard them, and by doing it, we generate a huge amount of waste with the potential to be re-use (unido, 2021).

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The most important pillar of circularity is to prevent products from becoming “waste” in the first place and re-integrate “waste” in the supply chain through repairing, reusing, remanufacturing, recycling, and sharing. Now, more than ever, it is crucial to adopt sustainable economic models to face and prevent global environmental degradation. According to the Circularity Gap Report 2021, the world´s material consumption reached 100 billion tons last year and this number is expected to double by 2050. From the total amount of materials that our economy consumes, more than 59 billion tons of greenhouse gasses are generated and only 8.6% of the materials are reused. Circular economy can play a fundamental role to reduce these negative indicators for our future generations (Laxmi Haigh, 2021).

Modern circular economy as “Business Model”
The Circular Economy as a “Business Model” approach is an important and needed tool for governments, organizations, entrepreneurs, and people to convert resources and capabilities into continuous economic value. And of utmost importance, it is a step further to reduce environmental damages. The adoption and implementation of circular business models are part of an ongoing process with 3 main phases as Figure 2 shows.

The first phase is the narrowing phase, which is related to the “use of fewer resources”. Currently, we are very good at “doing more with less”, due to many technological improvements and new methodologies such as “lean production”. Industries around the world try to use less resources when creating a new product, however, this approach needs to be complemented with the next question: What happens with a product after it has been used? The narrowing phase takes into consideration a product perspective instead of a material perspective. By doing this, we can create better products with more durability, more value, and a better design. These characteristics add more functionality and complexity to a product and maximize its lifespan. (Konietzko, 2020).

The second phase is known as the slowing phase, which is related to “use longer” by re-integrating used products to the productivity chain. To achieve this, we must create networks and share information with other players. If we take the initial example of the Pfand system to recycle bottles, behind that system are many players: the a) brands that design a recyclable product, b) the government that creates a regulation to pay a “deposit” for each bottle, c) the supermarkets where the collector-machines are installed, d) the companies that process the empty bottles, etc. This phase is the most difficult because many companies are afraid or unwilling to share their data due lack of awareness, incentives or because they are in a comfort zone. However, there will always be synergies and common goals among stakeholders which can create opportunities to adopt a circular economy in traditional business (Konietzko, 2020).

The last phase of a circular business model is called the closing phase and is related to “use again”. In this phase, the main goal is to transform what we classify as waste into resources with actual value for the productive chain. Even if we create durable products with great designs and complexity, at some point, they will lose functionality. When this happens, a product does not necessarily become a waste. Depending on its state, it can be re-integrated in two ways: 1) as raw material or 2) as energy. This phase will significantly reduce the dependency and consumption of external sources of energy and materials in production processes (Konietzko, 2020).

It is important to mention that circular economy and circular business models are part of an “ongoing” process in which governments, companies, and individuals are responsible for its improvements through the implementation of policies. To adopt and promote a circular economy, we need to become a circular society, in which each player actively participates to raise their voice. Everyone can contribute to identify weaknesses in our system and take them to an administrative and regulative level. Weak points and opportunities for change have to be discussed and transformed into better regulations for companies and create the infrastructure to facilitate customers to make better and more sustainable choices. The progress in the adoption of more sustainable economic models like the circular economy have been made thanks to the people and small actions that transform a whole industry. Now more than ever we need pioneers with creativity and innovation to disrupt the traditional and linear system and create new ways of production and consumption in which we find a real social, economic, and ecological balance.

If you want to learn more, I recommend you have a look at the website of these amazing programs & tools:

Circulator: https://www.circulator.eu/

The Circular Design Guide: https://www.circulardesignguide.com/

Circularity: https://www.circularity-gap.world/2021

 

Brosnar López Rodríguez
MSc. Sustainable Resource Management / TUM / contact: brosnar.lopez@gmail.com

 

References

allaboutberlin. (2021, February 25). The Pfand system: how to return bottles in Germany. Retrieved from The Pfand system: how to return bottles in Germany. Available at: https://allaboutberlin.com/guides/pfand-bottles

europarl. (2021, March 03). Circular economy: definition, importance and benefits. Retrieved from Circular economy: definition, importance and benefits. Available at: https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economy-definition-importance-and-benefits

Konietzko, J. (2020, January 05). A Tool to Analyze, Ideate and Develop Circular Innovation Ecosystems. MDPI. Available at: https://doi.org/10.3390/su12010417

Laxmi Haigh, M. d. (2021). The Circularity Gap Report 2021. Amsterdam: PACE.
unido. (2021). Circular economy. Retrieved from Circular economy. Available at: https://www.unido.org/our-focus-cross-cutting-services/circular-economy

Transition to a circular economy.

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