Circular economy booklet

INTRODUCTION TO THE CIRCULAR ECONOMY

Circular economy booklet!

INTRODUCTION TO THE CIRCULAR ECONOMY

© Ellen MacArthur Foundation

LINEAR ECONOMY

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Today's linear ‘take, make, dispose’ economic model relies on large quantities of cheap, easily accessible materials and energy, and is a model that is reaching its physical limits.

The linear economy

Source: Ellen MacArthur Foundation

WASTE

WASTE

CONSUMERS

DOWNCYCLE?

FOSSIL FUELS FOSSIL FUELS FOSSIL FUELSFOSSIL FUELS

WASTEENERGY &MATERIAL

RESOURCES

REDUCES NATURAL CAPITAL

TAKE

MAKE

DISPOSE

CIRCULAR ECONOMY

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A circular economy is one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.

CIRCULAR ECONOMY SYSTEM DIAGRAM

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CHARATERISTICS OF A CIRCULAR ECONOMY

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Think in systems Many real-world elements, such as businesses, people or plants, are part of complex systems where different parts are strongly linked to each other, leading to some surprising consequences. In order to manage the economy well, these links and consequences must be taken into consideration at all times.

Waste is “designed out” Waste does not exist. Products are designed and optimised for disassembly and reuse. Biological material can be safely returned to the soil. 

Diversity builds strength In an uncertain and fast-evolving world, the ability to adapt to changing conditions is essential to thrive. Diversity can provide this adaptability. Economies need a diverse range of businesses of various scales, and organisations need a range of roles and skills.

Renewable energy sources power the economy Energy required for a regenerative economy should be provided by renewable sources, decreasing resource dependence and increasing systems resilience.

Prices reflect real costs Prices act as messages, and therefore in a circular economy they need to reflect full costs in order to be effective.

ReSOLVE – WHAT BUSINESSES CAN DO

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Regenerate and restore natural capital: •  Reclaiming, retaining and restoring the

health of ecosystems •  Returning valuable biological nutrients

safely to the biosphere (e.g. through anaerobic digestion or composting and enabled by the separation of technical and biological nutrients)

Maximise product utilisation: •  Sharing the usage of assets (e.g. through

sharing schemes or exchange platforms) •  Reusing assets (e.g. through resell,

redistribution)

Optimise system performance: •  Prolonging the time products are used (e.g.

through maintenance, design for durability and upgradability)

•  Decreasing resource usage (e.g. increasing efficiency, designing out waste)

•  Optimising the logistics system through implementation of reverse logistics

Re g e n e r a t e

S h a r e

O p t i m i s e

ReSOLVE – WHAT BUSINESSES CAN DO

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Keeping products and materials in cycles: •  Remanufacturing and refurbishing products

and components (e.g. through design for disassembly)

•  Recycling materials (e.g. through making the right material choices in the design process)

Dematerialising resource use and delivering utility virtually: •  Replacing physical products with virtual

services (e.g. e-books instead of books) •  Replacing physical stores with virtual

locations (e.g. online shopping, virtual travel) •  Delivering services remotely (e.g. cloud

computing and storage)

Selecting resources and technologies wisely: •  Shifting to renewable energy and material

sources •  Using alternative material inputs (e.g.

cascading by using by-products or extracting biochemical feedstock from biological nutrients)

•  Replacing old with advanced technical solutions (e.g. 3D printing)

•  Replacing product-centric with new service-centric delivery models

L o o p

V i r t u a l i s e

E x c h a n g e

CASE 1: REPLACING TECHNICAL WITH BIOLOGICAL

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ECOVATIVE DESIGN Ecovative Design created a mushroom-based materials – a compostable, bio-based alternative to petroleum-based expanded plastics.

•  Manufacture a number of products including protective packaging, insulation and even surfboards

•  Packaging components are supplied to Dell, Steelcase and a growing number of Fortune 500 companies

•  A second manufacturing plant, in New York, will become operational mid-2015

Key figures  •  Founded in

2007  •  Raised $14

million funding since launch  

•  65 employees  

•  Agricultural material used as feedstock, bonded together with mycelium, the ‘roots’ of mushrooms

CASE 2: FROM OWNERSHIP TO ACCESS

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MUD JEANS Mud Jeans is pioneering a lease model for its organic cotton jeans, in order to ensure raw materials supply and explore new business opportunities.

•  Jeans beyond repair are send to the denim manufacturer to be recycled

•  By giving more than one life to a jean the brand is preventing a number of environmental impacts

•  Cotton culture is demanding for the environment: 2,4% of the world’s cropland is planted with cotton, yet it accounts for 6,2% of the global sales of insecticide and pesticides

•  The leasing system allow for recovery of old Jeans which are then rebranded as vintage

Key figures •  Started in 2013 •  €7 / month for one

Mud Jeans •  Buy back old jeans

for a €10 voucher •  8,000 litres of

water per pair of jeans

CASE 3: CREATING VALUE THROUGH REMANUFACTURE

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CHOISY-LE-ROI: RENAULT Renault’s remanufacturing plant, reengineers different mechanical subassemblies, from water pumps to engines (gearboxes, fuel injection systems)

•  The parts are 30-50% less expensive than new ones with the same guarantee and quality standards

•  The process is more labour intensive and requires a skilled workforce

•  The plan is profitable because it is less capital intensive and requires less input

Key figures •  Remanufacturing from 1949 •  Turnover: €100 million •  325 employees •  0% of the raw material is

headed to landfill •  Compare to a new

component the process use: -  80% less energy -  88% less water -  92% less chemicals -  70% less waste

CASE 4: B2B ASSETS SHARING

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FLOOW2

FLOOW2 is the first business-to-business sharing marketplace that enables companies and institutions to share overcapacity of equipment, knowledge and skills of personnel.

FLOOW2’s 6 steps of asset sharing: 1.  See the opportunities: Financial, sustainable & social 2.  Acknowledge underutilized equipment and personnel 3.  Form policy an appoint manager 4.  Take inventory of supply & demand 5.  Use FLOOW2 sharing marketplace 6.  Ensure commitment to culture in daily business

•  Users can register on the platform for free and participants pay a subscription to advertise their equipment on the platform, providing a revenue stream for FLOOW2

•  The company also provide additional services, like online payments services, credit checks, tracking and trace service on assets and insurance through partnerships with other businesses 

•  Advances in ICT have contributed to the collaborative consumption’s viability and FLOOW2’s offering enables businesses to take advantage of this trend

Analyses outlining a trillion dollar opportunity

CIRCULAR ECONOMY EVIDENCE BASE

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Reports

Towards the Circular Economy Vol. 1: an economic and business rationale for an accelerated transition (2012) Focus on the medium lived complex goods and detailed a USD 630 billion of net material cost savings per year in the EU.

Towards the Circular Economy Vol. 2: opportunities for the consumer goods sector (2013) Focus on the fast-moving consumers good and detailed a USD 706 billion of net material cost savings per year, globally.

Towards the Circular Economy Vol. 3: Accelerating the scale-up across global supply chains (2014) Focus on actions to accelerate the scale up across global supply chains. The report was written partnership with the World Economic Forum  

Giving a collected overview

Towards a Circular Economy: Business rationale for an accelerated transition (2016) 20-page summary of the Ellen MacArthur Foundation's analysis to date. It is relevant to all with an interest in the opportunities presented by the circular economy.

Addressing systemic stalemates in global material flows and enablers of the circular economy

A methodology for sector based analysis

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A New Plastics Economy: Rethinking the future of plastics (2016) This new report provides, for the first time, the vision for a global economy in which plastics never become waste, and outlines concrete steps towards achieving the systemic shift needed.  

Delivering the Circular Economy: A toolkit for policymakers Provides a set of tools for policymakers who wish to embark on a circular economy transformation, and a concrete example for a pilot country (Denmark).

Intelligent Assets: Unlocking the circular economy potential - With up to 50 billion connected devices predicted by 2020, the 'Internet of Things' is transforming the economy. This report provides the first vision for how a digitally enhanced, prosperous circular economy could look.

CIRCULAR ECONOMY EVIDENCE BASE Reports

Analyses showcasing EU GDP growth potential

Growth Within – A circular economy vision for a competitive Europe (2015) Outlining opportunities for three core human needs (housing, mobility, food), with a potential of 7% additional GDP growth by 2030 vs current development path and a reduction of CO2 emissions by 48% vs 2012 levels.

WANT TO KNOW MORE?

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Useful links to open and free resources

Watch more: •  The circular economy: from consumer to user

www.tinyurl.com/circulareconomy1 •  Re-thinking Progress: The Circular Economy

www.tinyurl.com/circulareconomy2 •  Ellen MacArthur, TED Talk:

www.tinyurl.com/circulareconomy3 Read more: •  The circular economy overview:

www.tinyurl.com/circulareconomy4 •  Find all case studies:

www.tinyurl.com/circulareconomy5 •  All publications:

www.tinyurl.com/circulareconomy6 Stay updated: •  Circulate - online hub for news, editorial and insight on the

circular economy and related subjects: www.circulatenews.org

•  Sign up to the Ellen MacArthur Foundation newsletter: www.ellenmacarthurfoundation.org

Free educational resources, courses & webinars: •  The Disruptive Innovation Festival (DIF) – online global circular

economy knowledge festival www.thinkdif.co

•  Collection of online educational resources: www.tinyurl.com/circulareconomy7

•  Introduction to the circular economy – online course led by the Technical University Delft www.tinyurl.com/circulareconomy8

 

ABOUT THE ELLEN MACARTHUR FOUNDATION

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The Ellen MacArthur Foundation was established in 2010 with the aim of accelerating the transition to the circular economy. Since its creation the Foundation has emerged as a global thought leader, establishing circular economy on the agenda of decision makers across business, government and academia. The Foundation’s work focuses on four interlinking areas: Education & Training, Business & Government, Insight & Analysis and Communications & Publishing  

Watch introduction to the Ellen MacArthur Foundation:

www.ellenmacarthurfoundation.org/about

@circulareconomy #circulareconomy Ellen MacArthur Foundation Ellen MacArthur Foundation ellenmacarthurfoundation

NOTES

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NOTES

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