What it means to have a circular economy

Dolmen Editing


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You may have seen or heard the term circular economy recently. It is a phrase that we’ll most likely be hearing much more often in the future, but what does it mean?

The linear model

Our current economic model is what is known as a linear economy. This means that raw materials are converted into a product which is then used and eventually disposed of. Most often items end up in landfill or an incinerator even though they likely contain materials that could be reused.

For example, aluminium from drinks cans can be recycled an infinite number of times, but in 2018, 2.7 million tons of aluminium was sent to landfill in the United States alone. This model relies on vast amounts of non-renewable natural resources and is not considered to be sustainable in the long term.

Our current economic model means many products have a relatively short life cycle. When they reach the end of their useful life, the majority of items are considered too costly or difficult to recycle, and are often discarded. This is especially the case with electronic items, clothing and food packaging.


A circular economy is one that believes the reuse and recyclability of goods is essential for sustainability. It aims to “design” waste out of our economic system.This means manufacturing goods out of recyclable materials and treating the recycled product as a resource rather than waste. It also means replacing our reliance on fossil fuels and other finite resources with renewable sources.

Mushroom-based packaging is an excellent example of how smart design and innovation are needed to move forward. For example, few would deny that styrofoam is a very useful product. It is, however, mostly designed for single-use purposes and disposed of after its short life cycle. This creates a waste material that is not accepted by most recycling initiatives. It is non-biodegrade and is toxic to the environment.

Ecovative, a New York based design company, has created a 100% natural and recyclable alternative to packaging materials such as styrofoam. Its packaging uses a biodegradable substrate such as wood fiber with a mushroom mycelium binding agent.

It can make use of agricultural waste as the bulk of the product and can be composted at home. This model is good for the environment, but it’s also good for business.

Could it be financially beneficial?

Using agricultural waste products, such as those mentioned above, is great for new startups. But, many existing manufacturers may have to reimagine the way they approach design.

Danish company Maersk is the largest container shipping company in the world. It is also exploring methods of incorporating recycling into its design phase. This means creating an online database of the ship's components to make recycling more efficient.

The company relies on a continuous supply of high-quality steel to produce its container vessels. In fact, each ship is constructed from about 98% steel components. The problem is that there are different grades of steel used throughout. During recycling, it can be hard to determine what grade a particular component is made from.

This means that when the ship is eventually retired, all grades of steel component will be recycled together which lowers the overall quality of the steel.

In creating the database, the company hopes that when a ship reaches the end of its useful life, it can be more efficiently recycled and the quality of the materials is maintained. This is not just greenwashing, but a necessary step to sustain an industry that relies so heavily on these materials.


By far the most important change needed for a circular economy to function is in our attitude towards materials. We have to prioritize using materials from renewable sources and maintaining the quality of those materials while keeping them in circulation as long as possible. But how could this work?

One method would be to implement more strict manufacturing restrictions. Single-use plastic bottles, for example, come in a largely unnecessary variety of shapes, sizes and materials, and are a major cause of pollution globally. Standardization of packaging could make recycling much easier and more economically viable for companies.

A major hurdle many recycling initiatives face is that they are not considered economically viable. The sorting process is time consuming and labor intensive, and the return on recycled materials is low. Drastically limiting the shapes, sizes and colors that plastic products can be produced in and standardizing the materials would make them much easier to process after use.

It would also promote the reuse of items such as glass and hard plastic containers that are still functional. After all, cleaning a glass container is much more energy efficient than melting it down and producing a new one.

Implementing modular design practices is one way to make goods more repairable and configurable by the user. For example, when a home appliance such as a toaster breaks, the whole item is often thrown away even though it may only be an electrical component that is broken.

Implementing a “plug and play” modular design for these components could allow products to be easily repaired at home or in a repair shop. This might seem like a novelty but it shouldn’t. It used to be commonplace to repair our electronic items. It's only in the last few decades we stopped doing this as the sale of cheap electronic goods made repair uneconomical.


Adapting to a circular economy, in some cases, may mean a total reevaluation of the way business is currently conducted. In the example of electronic items, creating durable and reparable products is undesirable for a lot of companies, as it reduces the amount of repeat custom.

One option to overcome this is to switch to a leasing system. This would mean the company maintains ownership of the product and is responsible for repairs while the customer pays a subscription fee. This ensures revenue for the company, but also incentivizes the production of better quality, more repairable products.

If the company maintains ownership of the product, they are also responsible for recycling it. This would mean the product designers prioritize reusable materials and efficient design practices. This is in stark contrast to how things are currently done, where manufacturers have no responsibility for the products they create once passed on to the consumer.

Will it be mandatory?

The idea of a more circular economy is already gaining traction in political circles. Some policy makers are already convinced that we need to drastically reduce our consumption of resources and a circular model is not only desirable but necessary.

The European Commision last year adopted a circular economy action plan, which presents measures to empower consumers and make sustainable products the norm throughout Europe. This especially focuses on industries that produce high amounts of waste in the production of electronic goods, batteries, vehicles, packaging, construction, textiles and food.

China has, since 2009, been implementing its own policies to promote a more circular economy. In reaction to environmental issues from rapid industrialization and low availability of resources, the circular model has become central to the countries economic strategy.

Which brands are already embracing the circular model?

There are a few brands that are already implementing aspects of the circular model into their business. Furniture retailer Ikea has started a buy-back scheme where customers can exchange unwanted furniture for store credit.

Major brands like Philips, Renault, Unilever and Danone are also trialing schemes that make use of circular economy principles.

The European Commission released a report on the behavioral study on consumers’ engagement in the circular economy in 2018. It seems that participation in the circular economy is likely to increase in the next decade, but for this to occur, it needs to be policy and consumer led.

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