Today’s “take-make-dispose” economy has long relied on cheap and available resources to create conditions for growth and stability. Society now acknowledges that continued wealth generation requires a new industrial model that is less dependent on primary energy and materials.

The concept of the circular economy is a way of decoupling growth from resource constraints. It reconciles growth and economic participation with prudence and equity.

Recycling and reusing materials historically discarded 

Companies can satisfy their resource needs by recycling and reusing materials historically discarded as waste. Those  involved in waste management can develop  services that allow manufacturers to capture value from materials left over after production or after a product has reached the end of its life cycle.

Great technological advances have been achieved in recycling, organics processing, and waste- to-energy conversion, and these have revealed opportunities in material and component recovery. Waste-collection operators and recyclers should cooperate with manufacturers to identify and develop opportunities for value recovery, helping manufacturers design products and production processes or  develop ing logistical solutions to incorporate recovered material in their production cycle.

New business models

Companies should consider new business models to retain ownership of the materials used in their products so that they can recycle or reuse the product at the end of its life cycle. For example, some manufacturers of  furniture  and household appliances and are shifting their business models from customer ownership to lease agreements

Impact on the economy

The estimation of materials cost savings of adopting a more restorative approach is over €900.000 millions per year by 2025. Leading companies are driving innovation in circular economy across product design, development of product-to-service approaches and new materials recovery methods. Companies that want to rethink their supply chain and business models should first focus on activities within their operations, where they have the most control; they can turn their attention later to activities that require the cooperation of other organizations, customers, or other stakeholders. Specifically, companies should prioritize the activities that offer the greatest potential for impact given their position on the production circle.

The following video shows in a very visual way the concept of Circular Economy:

Source: Ellen MacArthur Foundation

European Commission is promoting Circular Economy initiatives and projects providing funding through programs such as Horizon 2020. You can find this opportunities accessing to European Funding Observatory. We  would like to encourage you to discover it (premium version can be tested for free).

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