The circular economy is revolutionizing how industries manage waste and resources, shifting from a take-make-dispose model to a sustainable, closed-loop system. By redesigning processes to recover, reuse, and regenerate materials, businesses can significantly reduce environmental impact while improving profitability. Klean Industries is at the forefront of this transformation, providing advanced waste conversion technologies, consultancy services, and high-performance equipment that empower industries to maximize resource efficiency and achieve true sustainability.

The concept of the circular economy has left the realm of academic theory and entered the business world. The price of natural resources and materials is soaring, and in response to volatile markets and increasing competition, developed nations are examining this sort of alternative economic model.

A circular economy exchanges the typical cycle of make, use, and disposal in favor of as much reuse and recycling as possible. The longer materials and resources are used, the more value they extract. This could reduce Europe’s dependence on critical materials such as cobalt, fluorspar, or gallium. It could also reduce overall demand by recovering the resources, nutrients, or energy contained in products at the end of their useful life.

Extending the life of products and materials prevents the overproduction of waste and recovers the full value of products. This would create new business opportunities and revenue streams while minimizing the environmental impact of mining, resource extraction, refining, and manufacturing.

The plans put forward.

One of the pillars of the EU 2020 strategy is moving towards a more circular economic model. Within a few weeks of each other, the European Commission and a committee of British MPs have released reports on how to achieve this.

The EU proposes defining a headline target of material productivity, measuring the value generated per unit of raw materials or products. This would be set at 30% by 2030 based on GDP relative to raw material consumption. The package also includes a legislative proposal to review waste targets, which include targets for 70% recycling of municipal waste, 80% recycling of packaging waste, and bans on any landfilling of recyclable goods.

Other measures would boost innovation in resource efficiency and tackle material-intensive sectors like construction. These measures would improve the material efficiency of buildings through a harmonized framework for their life-cycle assessment and the promotion of secondary markets for construction materials.

From the UK, the Environmental Audit Committee’s report on “ending the throwaway society” calls for an ambitious strategy to establish the right conditions for transitioning to a more circular economy.

The committee’s proposals are more radical. They suggest lower VAT for recycled products and repair services to encourage new markets, innovation, and better product eco-design. The report also calls for a recycling regime that would improve the limitations of the current system of many local schemes.

Are they enough?

Although all these measures have potential, it’s unlikely they will provoke the sort of radical changes in patterns of consumption and production required. In Europe, the strategy relies on hefty recycling targets, but the measures to make it easier and more worthwhile to reuse waste to create new products are still missing.

Taxes have proven highly successful in reducing material waste and driving demand for secondary, recycled, or re-used materials markets. For example, the UK aggregates levy for the construction industry has increased recycling rates of aggregates (sand, gravel, etc) to 25% and boosted the market for recycled aggregates. In other words, it has made it worthwhile to reuse and not waste. Run across the entire EU, a similar tax could lead to revenues of €800 billion and hugely reduce material requirements for the building sector.

While talk of implementing a circular economy emphasizes the opportunities, there’s little reflection on the costs and challenges of the changes required. Waste is indeed valuable, but recovering that value is complex and costly. For example, construction waste, the most crucial waste stream in the EU, contains metals, minerals, glass, and wood, but in most cases, it has negative value – companies have to pay others to take it away. The re-manufacturing sector in the UK has the potential to generate £5.6 billion with the proper support. Still, none of the suggested policies do anything to overcome the barriers it faces.

The entire European package lacks any systemic approach. The emphasis on waste and recycling distracts from the need to address consumption. Although there is some mention of the need to design products to be more recyclable and reusable from the start, more work is needed to redesign the whole production and consumption system itself. We need more efficient and economically recycled products that last longer and are better for the environment. We also need the production and consumption infrastructure in which resources are optimized to maintain their value and usefulness over the lifespans of many products, at the end of each being recycled into another.

This is no mean feat, and will require measures such as industrial symbiosis, which aims to close the loop by promoting cooperation across different industries, where waste streams from one become inputs to another, or an extended producer responsibility scheme where producers have a duty of custody of the resources contained in a product even after its sale.

Another shortcoming of the package is the lack of reference to commerce and industry, which accounts for about a quarter of the EU’s waste. Some organizations are taking the lead, for example, the ambitious Marks & Spencer’s Plan A, Unilever’s sustainable living plan, or Sainbury’s recent announcement that one of its stores would “close the loop” by using its food waste to power the store. However, until these outliers become the norm, the EU and national governments could do much more to encourage them.

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