Components of the Circular Economy

Following Ellen MacArthur Foundation (2015), there are still certain characteristics that are considered as core components of the CE concept. These include certain fundamental characteristics and the R-framework which further is explained in the subsequent sections (Ellen MacArthur Foundation 2013, 2015, Ghisellini, Cialani, and Ulgiati 2016).

2.2.3.1 Fundamental Characteristics

According to the Ellen MacArthur Foundation (2015), there are five fundamental characteristics of the CE. The first characteristic is that waste is designed out. Traditionally, waste management has been considered as a simple way to get rid of materials by landfilling or incinerating. This is still the dominant waste management strategy worldwide, which results in negative environmental impacts. CE, however, recognizes waste management as a process where resources are recovered, and the negative environmental impact is prevented. In a CE, waste does not exist, because materials are designed to fit into either the biological or technical cycle (Ellen MacArthur Foundation 2015, Ghisellini, Cialani, and Ulgiati 2016). The idea of biological and technical cycles is adopted from the Cradle-to-Cradle concept and may be referred to as products for consumption and products for service.

The products for consumption, which is in the biological cycle, are consumed throughout their life cycle trough degradation or abrasion and will eventually return to the natural system. Therefore, these products should be designed to safely be returned to the natural environment and cause no negative impact. The products for service, which is in the technical cycle, are materials of human artifice. Returning these materials to the natural environment may cause harm, and therefore they should instead circulate within a closed-loop system through maintenance, reuse, remanufacturing and recycling (Braungart and McDonough 2002). A popularized model of these cycles has been created by the Ellen MacArthur Foundation (2012, 24), as shown in Figure 2-1. This model illustrates how the biological and technical materials cycle through the economy as a regenerative system, as well as how waste is designed out of the process.

Figure 2-1 CE, a Restorative Industrial System

The second characteristic is that resilience is built through diversity. In a living system biodiversity is key to surviving the environmental changes. Similarly, in an economic system a balance of different businesses of various sizes are necessary to thrive in the long term.

The large companies provide large volumes and efficiency, while the smaller firms offer new and alternative solutions when crises occur (Ellen MacArthur Foundation 2015, Ulanowicz et al. 2009). The third principle is that renewable sources need to be used to create energy. By using renewable energy as the main source of energy in the CE, the dependency on fossil fuels is decreased. This will increase the economic system’s resilience toward oil negative effects, such as an increase in oil prices and a lack of supply. Another important impact of shifting towards renewable energy sources is the decrease in the negative environmental impact (Ellen MacArthur Foundation 2015, Ghisellini, Cialani, and Ulgiati 2016).

The fourth characteristic is that CE needs to be thought of in systems. The businesses in the CE are part of complex systems where everything is linked closely together. Therefore, when designing the CE these links and their potential consequences need to be taken into

consideration. The production and consumption systems should be designed to simplify resource exchange among the different components, which encourage full resource utilization (Ghisellini, Cialani, and Ulgiati 2016). The fifth and last characteristic is that the price mechanisms need to reflect the real costs. In the CE the prices of products and resources should act as messages, and therefore reflect the full costs. This requires full transparency, so that the entire costs of negative externalities are revealed (Ellen MacArthur Foundation 2015). Considering components of CE, the R-framework is the fundamental one and this is explained in the ensuing section.

2.2.3.2 The R-Framework

A core component of CE is the R-framework, which appears in research in many different forms. Commonly, it is referred to as the 3Rs: Reduce, Reuse, and Recycle (Ghisellini, Cialani, and Ulgiati 2016, Sakai et al. 2011, Su et al. 2013). Reduce refers to improving the efficiency of production by minimizing the use of resources, such as energy, raw materials and waste. This may be accomplished by introducing simpler packaging and products, newer and better technology, more efficient appliances, a simpler lifestyle, and so on. The way companies are using the reduce principle in practice is by aiming at achieving the concept of eco-efficiency (Ghisellini, Cialani, and Ulgiati 2016, Su et al. 2013). According to Ehrenfeld (2005), eco-efficiency is a business concept that combines performance with development, environment and economics. WBCSD (2000, 4) defines it as:

Being achieved by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity throughout the life cycle, to a level at least in line with the Earth’s estimated carrying capacity.

Figge, Young, and Barkemeyer (2014) describe how companies can increase the eco-efficiency in their production process, by either increasing or keeping the value of the products and at the same time reducing the environmental impact. This is achieved by using fewer resources and less harmful materials per unit of value produced.

According to the EU (2008, 10), the second R, Reuse, means “any operation which products or components that are not waste are used again for the same purpose for which they were

conceived”. Reusing products is very beneficial from an environmental point of view as it requires less resources, energy and labor compared to production processes that calls for extraction of new resources and materials (Ghisellini, Cialani, and Ulgiati 2016). In a study by Castellani, Sala, and Mirabella (2015), they showed that reusing items such as clothes, furniture and books reduce emissions of noxious substances. Some companies apply the reuse principle through offering repair services, which allows them to resell used products.

Others may use rental models where they rent products to their customers for a given period, allowing them to maintain the ownership of the products and ensure that the materials are sustainably repurposed at the end of their lifetime (Besch 2005). However, according to Prendeville and Sherry (2014) there are several challenges to implementing the reuse principle. First, the market demand for reused products is poor due to the consumers’

perception of these products and their quality. Second, a larger number of manufacturers need to be willing to design durable products and participate in take-back schemes to ensure that the products will be used in multiple cycles. Still, it is argued that it is possible to overcome these challenges by incentivizing companies to favor take-back schemes, and through marketing used products to consumers.

The last R, Recycle, encourages the processing of products into new materials at the end of their lifetime in order to reduce the need of virgin materials in the production processes (Su et al. 2013). EU (2008, 10) defines recycling as:

Any recovery operation by which waste materials are reprocessed into products, materials or substances whether for the original or other purposes. It includes the reprocessing of organic material but does not include energy recovery and the reprocessing into materials that are to be used as fuels or for backfilling operations.

Recycling can be divided into two categories, downcycling and upcycling. Downcycling is when products are converted into new materials which are of poorer quality and with reduced functionality. This usually happens by mixing or adding different materials and chemicals together in the process. Downcycling is the most common use of recycling today, which contributes to maintain the linear character of most material flow systems (Ellen MacArthur Foundation 2012). Upcycling, however, is the process of utilizing materials at the end of their lifetime to create new materials of even higher quality or value than the

compositional elements. This practice is embedded in the CE but may be difficult to implement in all material recycling (Sung, Cooper, and Kettley 2019). According to Prendeville and Sherry (2014), it is for instance difficult to upcycle some types of plastics and metals.

Even though the 3Rs are described as the main actions in CE (Ghisellini, Cialani, and Ulgiati 2016), they may be extended to include a fourth R named Recover (Kirchherr, Reike, and Hekkert 2017). Jawahir and Bradley (2016) refer to recover as the process of gathering products at the end of their lifetime, and further disassembling, sorting and cleaning them for future use. Even so, the R-framework may be extended to include six Rs, or even nine (Kirchherr, Reike, and Hekkert 2017). According to Potting et al. (2017) nine different Rs can be included in the framework, where they all play a role in reducing the consumption of resources and materials, as well as the minimization of waste. These 9Rs are listed in Figure 2-2 (Kirchherr, Reike, and Hekkert 2017, 224).

Figure 2-2 The 9R Framework

A feature of the R-framework is the hierarchy of priorities of the different R’s that are included. In the hierarchy the first R is viewed as a priority to the second R, and so on (Kirchherr, Reike, and Hekkert 2017). In other words, the different Rs are ranged in a descending priority, as shown in Figure 2-2, where the first R is the most efficient to achieve

the CE objectives. Therefore, refuse, rethink, and reduce are considered the most important Rs, while recover and recycle the least. Figure 2-2 also shows that when only considering the 3R-framework, reduce is acknowledged as the highest prioritized R, while recycle the least (Potting et al. 2017). According to Kirchherr, Reike, and Hekkert (2017), most of the 9Rs are possible to categorize within the broader framework. The first R in the 3R-framework, Reduce, may contain refuse, rethink and redesign. Reuse can include repair and refurbishing, while the last R, Recycle, may deal with remanufacturing as an upcycling strategy (Steinhilper 1998). Furthermore, the R-framework is closely related to looping models, which is explained in the next section.