16 December 2019

Emerging aspects of the Circular Economy

The circular economy holds the promise of decoupling economic growth from resource consumption and represents an economic opportunity that could unlock an additional €1.8 Trillion of value for business and society by 2030, for Europe alone.

I’ve had the great pleasure of working with the Ellen MacArthur Foundation and other leaders of this new economic model over the past decade (although I was interested in the concept of Cradle‐to‐Cradle before this). There are many apparent links between the circular economy and the toolsets and knowledge of someone trained in materials science and engineering, and having a keen interest in sustainably it was an exciting topic for me. A particular focus for me has been on the role of materials information as an enabler for the transition to the circular economy and the quantification of ‘circularity’. The most recent output from this collaboration has been the 2019 update of the Materials Circularity Indicator (MCI) methodology.

It has been great to see the progression of conversations around the circular economy. Initial discussions focused on what the circular economy is and why it should be adopted, there were few clear examples of putting it into practice, however, and this was a point of frustration for some, myself included. In more recent years, however, concrete examples of delivering circular economy models have emerged and have fuelled the realisation that this is both a viable and an exciting economic model with a realisable potential for economic, environmental and social benefits.

Where do discussions on the circular economy go next, and what challenges remain to be addressed? From my perspective, there are two relatively untapped seams to the circular economy that bear further consideration.

  • Regenerative production of materials

The 2019 extension of the MCI methodology focussed on the inclusion of biological material flows and now requires that natural materials are either from reused, remanufactured or recycled sources or sourced from regeneratively managed supplies to be considered circular. Likewise, at the end of use, natural materials must be reused, remanufactured, recycled or returned (without detrimental contaminants) to the environment as a biological nutrient, through composting for example. Under particular circumstances and as a last resort, regeneratively sourced materials may also be recovered through energy recovery and still treated as circular – see the methodology for a full explanation of this fringe case.

In developing the methodology, however, we have stopped short of really defining what regenerative production means in the context of the circular economy. There are many standards for the sustainable production of biological materials – FSC for timber, GOTS for textiles, MSC for fish. We also have the UN’s Sustainable Development Goals as a reference. No one has, to my knowledge, really assessed any of these standards for fitness for purposes when operating within a circular economy. Are these standards already fit for purpose, or do they require revision to more accurately represent what the circular economy can or should mean for biological systems?

  • Economic, social and environmental equity in a circular economy.

I have long held the opinion that the path to a circular economy will inevitably lead to a more significant focus on equity for regions of primary production. We will never wholly reuse, remanufacture or recycle everything to the extent that we eliminate the need for primary production – although I believe much of that production will inevitably shift towards the circular bioeconomy, a concept being pushed forward by organisations such as Scion.

For the new materials that continue to be required, production will of course have to rely increasingly on low carbon energy, which is itself a key feature of the circular economy. Circular systems will also need to be applied increasingly to production equipment, chemicals, fertilisers, water and the other consumables used in production.

Importantly though, what will happen to initiatives such as Fair Trade in a circular economy? If we imagine a mature circular economy, where we have heavily reduced our reliance on the production of new raw materials, what happens to the communities that so heavily rely upon the production of these materials? How will they continue to prosper without this income?

During the recent IOM3 conference 'Balancing Resource Efficiency with Climate Change', the initial keynote by Proffesor Walter Stahel mentioned a concept put forwards by Andrew J Hagan on the leasing of molecules, where some of the economic gain from the use of material flows back to those who produced it originally. Is such a concept viable? If so, how would it work and what would it mean for the way we design, manufacture and use products in the future?

I believe we are now at an inflection point for the circular economy. It is no longer a concept but a practical business model, and one which will rapidly become the norm and something that is expected by the consumer. Challenges such the ones I’ve mentioned represent just a couple of the remaining unknowns that we will need to address to ensure that the impacts of a circular economy are beneficial for us all.

Written by James Goddin, IOM3 Strategic Advisor