What Is A Circular Economy And Why Is It Necessary?

This article was written for Pieces Of The Puzzle by Louisa Knocker, sustainability analyst. 

Circular economy jigsaw company Pieces Of The Puzzle

The concept of the circular economy is to recognise the value in all materials. In the World we now live in, 100 billion tonnes of materials are consumed a year and only 8.6% of those materials are reused and recycled back into the economy. It is time to change the way we run businesses as well as how we produce and consume.

The volumes of products we consume and throw away is unsustainable and waste infrastructures cannot keep up. EU households produced 209 million tonnes of waste in 2016 with only an average of 30% being recycled despite a target of 50%. Even a few days ago, the BBC reported that UK waste being sent to Turkey (to be recycled) was actually just being left on the side of the road and burnt

When people think of unsustainable waste, single use plastic is the main thing that comes to mind. That is because it lasts thousands of years and is relentlessly accumulating in the environment. The World Bank estimates that by 2050 there will be 12 billion tonnes of plastic waste in natural environments. This has disastrous effects on human health, wildlife and ecosystems. 

However, that is not the only issue with the waste we accumulate. It also represents the enormous waste of resources used to make those materials in the first place. As all materials have a carbon footprint – that is, they all require energy to produce, most commonly in the form of fossil fuels, which release carbon dioxide into the atmosphere when burnt. Carbon footprints also include the greenhouse gases released when raw materials are extracted or produced. For instance, mining (for metals etc) is carbon-intensive. Similarly, agricultural products (food, cotton, plant-based plastics) carry high carbon footprints due to the emissions from fertilisers and agricultural machinery. These products also tend to have high water footprints. 

A lot of focus is on the waste that we produce because the damage is tangible and visible. It is harder to observe the effects of climate change and unsustainable water use from the materials that we consume and throw away. Because of this, the solution is not just to use alternative materials that are easier for waste infrastructures to handle. This is because it does not tackle the underlying issue of wasting materials that carry environmental footprints. 

We should not focus on changing the composition of our waste, but to prevent the waste in the first place, to enter a circular economy.

In a circular economy, waste and pollution is viewed as a design flaw, requiring a change in business models and product design. The circular economy prioritises reuse, repair and recycling of materials so that the value of all materials is recognised and few new raw materials are required to enter the economy. The image below from the Ellen MacArthur Foundation depicts the circular economy. Technical resources (metals / electronics etc..) and biological resources (wood and agricultural products & by-products) are continuously cycled round the economy by reusing, re-purposing and recycling. 

Circular Economy - an industrial system that is restorative by design

There are a growing number of circular business models entering markets globally, with the majority being in Europe at the moment. While only 8.6% of the global economy is currently circular, The Netherlands aim to have a 100% circular economy by 2050 (at the moment they are 24.5% circular). There is also a push in the UK to transition towards a circular economy and here at Pieces of the Puzzle we aim to do our bit to contribute to this progress.

For those interested here are some examples of circular business models in different sectors currently:

Food & Drinks Sector

In perhaps the most difficult sector to become circular because of health and safety, Heineken have introduced a reuse system in France where bottles are collected from bars, washed and refilled at their brewery and then delivered back to the bars to reuse. They calculate that this system reduces the carbon footprint by 74%, because they are avoiding having to produce new glass bottles (which requires a lot of energy). 


H&M is trying to mitigate the impacts of fast fashion by recycling old clothes left in stores by customers.


MUD Jeans are a pioneering brand allowing you to lease a pair of jeans for a year – once they have worn out or you want a new pair, you can swap them for a new pair. The old pair get repaired or recycled. 

Ecommerce: RePack have created a viable business using reusable packaging for ecommerce fashion retailers. Consumers return the reusable package in exchange for loyalty points with the retailer.

The Sharing Economy: A lot of equipment is only used for a few hours in its lifetime – think DIY, bikes, cameras, instruments etc. The app Fat Lama allows you to lend and borrow technical equipment to other users, thereby making the most out of the product.

If you have any further questions, please comment below and we will answer them. 


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