What is Circular Economy?

Circular economy is a market economy that aims to keep resources inside the economy for a long time, to protect added values of physical resources, to reduce consumption of raw material, and to minimize waste.

Linear economy, on the other hand, operates with the approach of “buy-build-dispose” in production and consumption. A product is produced from raw materials, it is consumed and becomes waste. In short, it refers to an economic approach that involves collection and processing of raw materials to transform these into products, in which these products finally turn into waste.

Circular economy, however, operates on the basis of principles of “reduction, reuse and recycling” of the resources.

According to its simplest description, what we call “circular economy” is a system which aims to minimize environmental waste generation by reusing resources in the production process and protecting all core values for a long time.

Well then, what is the main idea in circular economy?

It has three principles at its basis:

• Eliminating waste and pollution
• Keeping products and materials in circulation
• Reviving nature

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Introduction to Linear and Circular Economy

Give yourself one minute to think about a product that you own: It can be anything you want, whether big or small. Now ask yourself this: Which raw materials have been used to produce this product? How long will I use it? How will it be disposed of after I am done with it? You can find yourself lost among some answers when you try and answer these questions.

It can be difficult to know where exactly your products came from as long as you have not considered buying ethical products with such an awareness before you have purchased them.

Most of the products you purchase these days are produced in a way that is cheap and convenient. And this results in too much waste since these products are used once or a few times and then disposed of as waste.

What is Linear Economy?

The majority of the world operates within linear economy. This approach, also known as buy-build-dispose, highlights convenience rather than social and environmental sustainability. Linear economy is a concept that involves taking materials and natural resources from the world, producing something out of these and disposing of the waste.

This approach brings with it many problems; one of the most important problems is ignoring how an item will be disposed of once it reaches the end of its life cycle.

Let us start with the simplest example. Coffee giant Starbucks sells 4 million cups of coffee only in the U.S. Only 1% of Starbucks customers bring their own coffee mugs to the shop. This means that millions of single-use coffee cups are being disposed of every day.

And this is the simplest example of linear economy. If you buy coffee, you hold it in your hand for about 20 to 30 minutes and then, most likely, you dispose of it in the closest waste bin.

The circular economy approach is unbelievably valuable for preventing waste production, reducing waste, and promoting reuse.

How it Differs from Circular Economy?

Circular economy prioritizes reusability. Completely eliminating buy-build-dispose model in consumption, circular economy aims at efficient and effective use of items. The disposing process is considered only in the primary stages of the process to enable production of usable waste only.

At the end of their life cycles, materials are put into recycling in order to renew the system. This approach emphasized designing waste and pollution outside of the process and keeping products and materials in use.

Let us look back at the coffee example. Circular economy will seek to create a cup that is reusable, shareable, repairable, and finally transformable to a novel item rather than creating a disposable product. Even if it cannot be transformed into something new, materials can be reused to renew circular economy or given back to the world. In a circular economy, a coffee cup will be made of glass or porcelain, it will be reused by one person, it will be shared under “return your cup” program, it will be repaired when it wears out and finally it will be recycled.

Development of the Concept of Circular Economy

Circular economy has a number of definitions. This is because this concept is being applied by various researchers and experts. A scientist, for example, would emphasize one aspect of the concept while an analyst would refer to another aspect.

However, the common point of all of them is reduction of raw material consumption, reusing and recycling items.

In short, circular economy operates based on “Reduce-Reuse-Recycle” principle.

1- Reducing /using minimum amount of raw material,

2- Reusing / reusing products and components to the maximum level possible,

3- Recycling / reusing raw materials to the highest quality possible.

Circular economy has become an even hotter topic following increased levels of awareness in society, especially about climate crisis. New economic models such as green economy and implementations that promote moving away from disposable consumption items are becoming increasingly popular. Circular economy promotes exactly this purpose.

For more information about green economy, you can visit our blog post here.

It seems like economic models of the future will be the ones that promote common usage, reusing and recycling products. Now, let us learn more about circular economy by looking at some other examples.

Examples of Circular Economy

1- Carpooling means that less people will buy cars. This decreases raw material usage. Popularization of applications and companies that offer carpooling services is an example of applied circular economy. This example may be expanded with shared scooter usage which became popular in big cities. (Reducing)

2- If the engine of a car breaks down, it can be repaired, or the frame and internal parts of the car can be used in production or refurbishment of another car. (Reusing)

3- When these parts are no longer reusable, metal, textile and plastic components of the parts may be separated and put through the necessary processes to use in the production of a new car/product. (Recycling)

Big international companies also adopt a circular economy approach. IKEA, for example, opened a store in Stockholm for the first time to sell secondhand furniture.

The leading shoe company Adidas similarly launched a shoe called Ultraboost DNA Loop which was produced from 100% recycled raw materials.

Renault was one of the first companies to apply circular economy principles in the automotive industry. One of the latest initiatives of the company was to establish Refactory in Flins, France which is the first circular economy facility in Europe. Refactory, which will repair half-ruined vehicle bodies for fleets and insurance companies, aims to conduct repairs on 3,000 vehicles in 2023 and on 25,000 vehicles by 2025. Thus, it repairs worn-out automobiles and makes them reusable.

Why is Circular Economy Needed?

A new crisis is at our door while humanity is struggling with the climate crisis! It is biodiversity loss. Facts such as environmental pollution, population rise, and over-consumption reduce biodiversity in our planet. According to the data found in Living Planet Report 2022 published by World Wide Fund For Nature (WWF), the world’s plant and animal species decreased by 69% on average between 1970 and 2018.

According to the article written by Ellen MacArthur Foundation, we will lose more than one million biological species in the next ten years. This corresponds to a great biodiversity loss.

For more information about biodiversity, you can visit our blog post here.

In a world that loses its plant, animal and other species, all ecosystem comes under significant risk. And this is a process that may lead to epidemics, famines and crises and it is extremely hard to reverse this process. Moreover, more than 90% of biodiversity loss is caused by extraction and processing of natural resources, thus, it is a consequence of human activities.

The way to eliminate this threat passes through reusing environmental and natural resources in a sustainable manner and circular economy is a system that aims at this.

Seven Components in Circular Economy

More than twenty organizations, NGOs and governmental institutions working on circular economy have come together to create a common language, terms and definitions and they have reached seven fundamental components in relation to circular economy.

1. Designing for the Future
Using the right materials during the design process, creating designs that are in conformity with the life cycle, adapting designs to enable longer life cycles.

2. Using Digital Technologies
Optimizing resource usage through digital, online platforms and technologies which process data and conducts analysis and strengthening connections between supply chain parties.

3. Protecting Existing Products and Extending their Life Terms
Developing strategies to maintain, repair and upgrade products to extend the life of resources usage.

4. Prioritizing Renewable Resources
Ensuring efficient use of resources that are renewable and non-toxic.

5. Using Waste as Resource
Using waste as secondary raw materials and recovering them through reuse.

6. Reviewing Business Models
Correcting the interaction between products and services, seeking opportunities to create value through business models.

7. Creating Shared Values
Developing relations between organizations by increasing transparency and working together with the public sector.

So how can you help to contribute to circular economy?

Contribute to Circular Economy!

You can contribute to circular economy by:

- Choosing products and services that use smart design and recycled materials.
- Extending the life of the products you already own through repair and renewal.
- Supporting companies that offer recovery programs.
- You can rent instead of purchasing. Focus on the product or service you need and look whether there is a shared option instead of purchasing. Can you rent, borrow, or exchange?

The economy affects everybody, and it is important to remember that how you spend your money has a substantial impact!

Why Should We Transition to Circular Economy?

A circular economy, in which the values of resources and products are protected as long as possible and waste is minimized, creates a sustainable and low-carbon system. Moreover, a circular economy brings countless benefits such as reducing pressure on the environment, promoting innovation, and creating employment.