10 keys points on the circular economy

15 June, 2021

In the last 50 years, the world’s population has doubled and the Gross Domestic Product of countries has quadrupled. This has resulted in the consumption of large quantities of natural resources, which have driven economic development and led to various improvements in human welfare.

However, these advances have had a major impact on the environment. Promoting a circular economy can help to alleviate this situation. According to experts, the development of a widespread circular economy would lead to a clear decrease in CO2 emissions, stimulate economic growth, and create employment opportunities.

1. What is the circular economy?

The model of production and consumption that promotes the sharing, renting, reusing, repairing, renewing, and recycling of existing materials and products, as many times as possible, to create added value is what we call the circular economy. In doing so, the life cycle of products is extended, and waste generation and energy consumption are reduced.

Thanks to the circular economy, when a product reaches the end of its useful life, its materials are kept within the economy whenever possible. Thus, they are used productively time and time again.

2. What are the basic principles of the circular economy?

The three basic principles of the circular economy are as follows:

1. Preserve and enhance natural capital: this principle consists of making the most efficient use of natural and renewable resources. In the processes that require natural resources, priority should be given to those that use renewable resources or use smaller quantities of natural products.

2. Optimise the use of resources: this principle is based on seeking a higher rotation of products and their components, achieving a longer cycle of use, and therefore, a longer life cycle. For this to work, eco-design is essential in ensuring the product can be created, repaired, and/or recycled in an efficient way.

3. Promote the efficiency of the system: this principle is achieved by reducing the externalities of the processes of using natural resources (e.g. using food waste, using the land less or in a better way, etc.), and seeking synergies between the different agents involved in this process.

3. What are the advantages?

Essentially, there are six:

1. Reducing the use of existing resources and promoting efficiency. It provides a solution to the problem of raw material shortage. One-third of the materials that are used end up in landfill with no possibility of reusing or recovering them.

2. Reducing environmental impacts. By being resource efficient, we can reduce a large amount of waste (in the EU, around 2.5 billion a year). This would immediately contribute to improving environmental pollution rates and, as a consequence, reducing emissions between 2% and 4%, and in turn, the greenhouse effect.

3. Minimising the impact of plastic. Reuse of plastic products, recycling, and use of more sustainable materials.

4. Creating employment in recycling, recovery, and reuse activities, and in re-design, re-manufacturing, and repair operations.

5. Net savings of operating costs by optimising the use of resources and reintroducing waste into the production cycle.

6. Innovation by improving the ability of organisations to gain market share, opening up new markets or market niches or being sector leaders.

4. What role does the circular economy play in climate action?

Today, the production of the materials we use on a regular basis is responsible for 45% of CO2 emissions. The circular economy promotes the control of production of products and services.

The Ellen MacArthur Foundation has published the report Completing the picture: How the circular economy tackles climate change, which reveals that the implementation of circular economy strategies in key areas can eliminate almost half of the remaining emissions from the production of goods – some 9.3 billion tonnes of CO2 by 2050 – which would be equivalent to reducing current emissions from all transport to zero.

The production of the materials we use on a regular basis is responsible for 45% of CO2 emissions

Consumers, for their part, would have products that last longer, save money, and provide a better quality of life.

5. How does the circular economy impact the use of raw materials?

The use of secondary raw materials instead of virgin raw materials in the production of metal, glass, and paper leads to energy savings ranging from 20% to 90%, as well as water savings, according to various studies by the European Union.

In addition, it leads to a relevant decrease in environmental impacts, since manufacturing that uses fewer resources (i.e. energy, water, land, and materials) has positive impacts on climate, marine litter and biodiversity.

Lastly, the risks associated with raw material supply, such as price volatility, availability, and dependence on imports, which would be mitigated by using secondary raw materials, are significantly reduced.

6. What initiatives exist at European level to promote the circular economy?

In 2015, the European Commission adopted an action plan to drive Europe’s transition to a circular economy.

This plan included 54 measures aimed at “closing the product life cycle”. In 2019, the EU presented the European Green Pact, a roadmap for transforming the European economy into a modern, resource-efficient, and competitive one. Within the framework of the Green Deal, in 2020, it approved the new Circular Economy Action Plan, with measures that made it possible for companies, public authorities, and consumers to adopt a sustainable model.

7. Which countries in Europe are leading the transition to a circular economy?

In recent years, European policies on circular economy have continued to grow and gain importance across the continent, although it seems difficult for many member states to move completely from written promises to action.

One of the countries that is taking it most seriously is the Netherlands, which has an ambitious project to become a 100% circular economy-based country by 2050.

The use of secondary raw materials instead n the production of metal, glass, and paper leads to energy savings ranging from 20% to 90%

Moreover, France has favourable legislation and a clear discourse on circular economy and eco-innovation.

Italy is also doing things right, according to the Circular Economy Network 2020 report by the Italian Foundation for Sustainable Development. It has a 2020 budget law that includes measures to comply with the Green Deal, establishing a public investment fund to promote innovative projects in sustainability, circular economy, sustainable tourism, decarbonisation, and climate change mitigation.

8. What initiatives is Spain promoting for the circular economy?

In Spain, the Spanish Circular Economy Strategy 2030 was approved in June 2020 and will be implemented through several three-year action plans. The first of these, the 1st Circular Economy Action Plan 2021–⁠2023, contains 116 measures in the areas of consumption, waste management, secondary raw materials, reuse and purification of water, research, innovation and competitiveness, participation and awareness, employment and training.

This strategy establishes in ten points some strategic orientations. It also sets a series of quantitative objectives for 2030.

9. What are the objectives of the Spanish Circular Economy Strategy (EEEC)?

• Reduce the national consumption of materials in relation to GDP by 30%, taking 2010 as a reference year.

• Reduce waste generation by 15% compared to 2010.

• Reduce the generation of food waste throughout the food chain: 50% reduction per capita at the household and retail level, and 20% reduction in production and supply chains from 2020 onwards.

• Increase reuse and preparation for reuse to 10% of municipal waste generated.

• Improve water use efficiency by 10%.

• Reduce greenhouse gas emissions to below 10 million tonnes of CO2 equivalent.

10. What are the key sectors on the path to the circular economy?

For the EU the key sectors are: plastics, textiles, electronic devices, food; water and nutrients, packaging, batteries and vehicles; buildings and construction.
They must incorporate circularity and sustainability at all stages of the value chain to achieve a fully circular economy: from design to production, and from production to the consumer.

It is necessary to incorporate circularity and sustainability at all stages of the value chain to achieve a fully circular economy

For Spain, and as reflected in the Spanish Circular Economy Strategy 2030, the priority sectors of activity to incorporate this challenge towards a circular Spain are construction, the agricultural sector, the fishing and forestry sector, industry, consumer goods, tourism and textiles and clothing.