Circular economy is a production and consumption model that involves sharing, lending, reusing, repairing, reconditioning and recycling existing materials and products for as long as possible. Circularity normally indicates a return to a starting point: this figure applied to the productive economic sphere symbolizes the idea of an economy that can regenerate itself through systems of recycling everything that is used.
The system at the basis of the circular economy opposes the one that has been dominant since the time of the Industrial Revolution, namely, a linear system where, at the end of the production cycle, something remains that cannot be reused: waste. As we can observe in our daily lives, the effects of this type of linear economy are becoming increasingly burdensome, both for humans and the environment.
The basic principles of the circular economy
To implement a transition from the traditional linear economy to a circular economy, it is essential to revaluate the various stages of production. Adopting a circular economy model means re-examining the mechanisms of product creation, from design, production and consumption, to end-of-life, with a view to resource savings and possibilities for reuse.
According to the approach behind the circular economy, what is normally thrown away as waste in production or in the conduct of industrial activities can instead be put back into the production cycle and given a new life.
In a circular economy, consumer behaviour, waste management and the process of innovation and technological development move in one direction, aimed at the creation of new resources, with waste reduced to a minimum.
In order to make the purpose of implementing a circular economy a reality, certain cardinal principles must be adhered to, which we can summarize here:
Resource sustainability: the use of renewable, recyclable or biodegradable energy and materials in multiple life cycles.
Product as a service: a new idea of the concept of ownership in which the producing company remains the owner of the good and offers it for use by the customer as a service, rental or lease. There is no longer an attempt to sell ownership of an object.
Sharing platforms: encouraging the use of platforms where users and owners of goods can cooperate, thus helping consumers save money and make the best use of resources.
Life cycle extension: design and manufacture with the goal of extending the life cycle, allowing companies to repair and remanufacture products, so as to avoid a waste of materials or energy and thus put the same products on the market to make money.
Recovery and recycling: creating innovative production cycles in which waste is avoided, instead aiming to recover and recycle it so that it can be used again.
It is evident how the process is complex to implement when one considers that it involves disrupting the production cycle as it has been thought of over the past 150 years.
Italy already ranks among the top 5 large European economies (along with the United Kingdom, Germany, France and Spain) in achieving some early goals set to support a more circular economy. In fact, our country boasts the largest share (at 18.5 percent) in raw material recovery among the five economies mentioned above. A step in the right direction, but still much remains to be done.
The benefits of the circular economy
Achieving an economic model based on resource circularity is an economic policy goal of the European Union. In addition to the undisputed environmental and ethical benefits, the circular economy also represents a development opportunity in terms of competitiveness, innovation, environment and employment.
Competitiveness: new business models that are not too dependent on the use of raw materials make it possible to create a cost structure that is not subject to the danger of changing raw material prices, due to market dynamics or otherwise.
Innovation: changing business models on the basis of the circular economy brings a great boost to innovation. Reformulating processes means opening up unprecedented opportunities in all fields of business.
Environment: paying attention to the environment and reducing environmental impact means decreasing waste and pollution, plus containing global warming thus meeting the 2016 Paris Agreement.
Employment: reducing the need and thus the quantity of raw materials purchased and creating new value-added services also means that the cost structure slips from raw materials to labour. That is, sectors related to human activity (for repairs, etc...) are favoured over automated sectors.
How to support circular economy models
We have seen how the current economic model based on extraction, production, use, and disposal generates a huge loss of value and is no longer economically and environmentally sustainable. The scenario envisioned by the EU to achieve climate neutrality by 2050 requires an immediate change of strategy in the direction of a real ecological transition.
Fortunately, several companies are embracing, applying and promoting the principles of the circular economy. Ecircular, for example, is a promising all-Italian business that puts the responsibility of being part of a system at the centre of its business model and aims to cut down food waste and reduce CO2 emissions. The crowdfunding campaign for Ecircular will soon be available on our platform.