Circular Economy

It is a production and consumption paradigm that encourages people

The circular economy is a production and consumption paradigm that encourages people to share, lease, reuse, repair, refurbish, and recycle existing resources and products for as long as feasible. 

Circular Economy

The product's life cycle can be prolonged in this way. In reality, this means eliminating waste to the absolute minimum. 

There are four main concepts: 

  • The way we allocate our resources

  • Way we create

  • What we do with things

  • What we'll do with the stuff once we've finished.


Raw natural resources are collected, turned into goods, and then discarded in the linear economy.  This model tries to bridge the gap between production and the natural ecosystems' cycles, which people ultimately rely on.

On the one hand, this involves reducing waste by composting biodegradable trash or reusing, remanufacturing, and recycling transformed and non-biodegradable garbage. On the other hand, it also entails eliminating the usage of chemical chemicals and relying on renewable energy.

Difference between Circular Economy and Linear Economy

We've been living with linear production models for a long time, which means we extract, produce, consume, and trash. Because of the civilization we live in, the rate of consumption is increasing: a model that is quick but unsustainable for the world.


The circular economy develops a more sustainable production and consumption paradigm in which raw materials are retained in production cycles for longer and may be reused several times, resulting in significantly less waste. 

The goal of this approach, as its name implies, is to keep resources in the economy for as long as possible, allowing us to use the trash we make as raw material for other sectors.

Reduce, reuse, and recycle are the three Rs of a circular economy:

  •  The utilization of resources is kept to a minimum (reduce) 

  • The amount of items and parts that may be reused is maximized (reuse)

  •  Last but not least, high-quality raw materials are reused (recycled) 

This can be accomplished by sharing things with a larger number of people, such as shared automobiles. Value is produced in this system by focusing on value preservation.

Principles of Circular Economy

We take resources from the Earth, manufacture things from them, and then toss them away as garbage in our existing system - the process is linear. On the other hand, we prevent waste from being created in the first place.


It is founded on three principles, all of which are:

  1. Waste and pollution must be eliminated.

  2. Products and materials should be circulated (at their highest value)

  3. Nature should be regenerated.

A move to renewable energy and materials underpins it. Economic activity is decoupled from the consumption of finite resources. It's a dependable system that benefits businesses, individuals, and the environment.


It provides us with the tools we need to combat climate change and biodiversity loss while meeting critical social needs.

It empowers us to increase wealth, job creation, and resilience while simultaneously reducing greenhouse gas emissions, waste, and pollution.

Principle 01: Elimination of Waste & Pollution

Its fundamental premise is to eliminate waste and pollution. Our economy now operates on a take-make-waste model. We take raw materials from the Earth, turn them into goods, and then discard them as garbage.

Garbage Truck

A large portion of this garbage is lost in landfills or incinerators. Because our planet's resources are finite, this arrangement will not operate in the long run. 

Although waste may be unavoidable in some instances, it is the result of design decisions.

The first principle, "designing out waste and pollution," urges companies to rethink their supply chains and prevent waste and pollution. 

The best-case scenario is to accomplish this early in the product development process.

We may treat trash as a design problem if we change our perspective.

A need for any design is that the materials re-enter the economy after their usage. By doing so, we may turn the linear take-make-waste system into a circular one.

Many goods could be maintained, shared, reused, mended, reconditioned, remanufactured, and recycled in the worst-case scenario. 

Food and other biological materials that are safe to return to nature can help the land recover, allowing fresh food and resources to be produced.

We can eliminate the idea of waste by focusing on design.

This Finnish firm, Aquazone, has created a way for upcycling wastewater into fertilizer. Solids, water, and nutrients are removed from the wastewater during biochemical treatment. 

The sludge is nutrient-rich and may be utilized as organic fertilizer; the water can be used for irrigation or recycled into drinking water.

We can begin to shut the materials loop and turn off the tap that is now spewing a torrent of rubbish into landfills and incinerators every day by embracing this fundamental principle. We can prevent waste before it is generated by focusing on upstream design.

Principle 02: Circulate products and materials

The second premise is about conceptualizing an economy that reuses, remanufactures, or recycles rather than depleting scarce resources.

Products And Materials

It indicates the circulation of high-value products and commodities. This entails maintaining materials in use, either as a product or as components or raw materials, after they can no longer be used. 

Nothing goes to waste in this manner, and the essential worth of items and resources is preserved.

The ultimate objective is to employ bio-based goods, components, and materials to have a beneficial economic and environmental impact.

There are various ways to keep products and materials in circulation, and it's useful to consider two basic cycles: the technological cycle and the biological cycle. 

Products are reused, repaired, remanufactured, and recycled during the technological cycle.

Biodegradable materials are returned to the ground through processes like composting and anaerobic digestion in the biological cycle.

Goods must be built with their future circulation in mind to circulate successfully in either the biological or technological cycle. 

Many items in today's economy are unable to circulate in either cycle and end up as garbage. 

Certain items combine technological and biological ingredients in such a way that they are unable to be separated and circulated. 

If product designers consider how their product will fit into the technological or biological cycles after usage, they may design it with that in mind.

DyeCoo, a Dutch business, has devised a method of dyeing cloth that requires no water and just the colors themselves. 

It works by dissolving the dye and carrying it deep into the cloth with highly pressurized "supercritical" carbon dioxide, which is midway between a liquid and a gas. 

After that, the carbon dioxide evaporates and is recycled and reused. The material absorbs 98 percent of the dye, resulting in brilliant colors. Because the fabric does not need to dry, the procedure takes half as long, consumes half as much energy, and costs half as much.

Principle 03: Regenerate nature

The third premise is to replenish nature. It encourages natural processes and gives more opportunity for nature to thrive by shifting from a take-make-waste linear economy to a circular one.


Rather than perpetually damaging nature, we invest in it. We use agricultural methods that allow nature to restore soils, boost biodiversity, and recycle biological resources.

We begin to resemble natural systems if we shift to a regenerative approach.

Land committed to material sourcing will increasingly be focused on renewable resources cultivated in a regenerative manner rather than the exploitation of limited materials that will progressively remain in circulation.

Only 55% of global greenhouse gas emissions will be reduced by switching to renewable energy. The remainder comes from how we produce and consume goods, as well as how we manage land.

Growcentia was founded by a group of three Colorado State University microbiologists who love sustainable agriculture and devised a way to boost plant nutrient availability using natural microorganisms. 

Growcentia's personalized methodology enables growers and farmers in a variety of climates to enhance soil and plant health, resulting in maximum yields with the least amount of environmental impact.

We may adjust our objectives by adopting the third principle: rejuvenate nature. Our focus should no longer be on causing less damage to the environment but rather on how we might actively enhance it.

Need for Circular Economy

Such an economy, as a closed-loop system in which commodities and materials keep their greatest value, attempts to repair the environment by minimizing scarce resources and substantially lowering waste output. 


Citizens and corporations alike may effectively adopt this type of economy throughout society by decreasing waste, reusing items, and recycling resources. Therefore, the need bear a lot of advantages and is important, like:


It promotes biodegradable materials and attempts to repair the environment by changing firms' manufacturing processes to a more sustainable way. 

Companies may recycle garbage away from landfills while also lowering material prices by manufacturing materials from discarded goods/products.


This economy, which is worth trillions of dollars, promotes significant economic growth across numerous industries. 

With the global recycling sector expanding, there is a chance to create billions of dollars and millions of new jobs in the economy that are now being missed due to the modern linear paradigm.


Renewable energy, as one of its pillars, decreases both environmental exploitation and pollution from fossil fuel burning. 

Renewables provide a steady and inexhaustible power supply in industrial society, boosting our energy security and lowering the additional expenses connected with nonrenewable energy sources.


Businesses must transition to new techniques to satisfy customer demand for more sustainable and eco-friendly products while still making money to meet the rising demand for more sustainable and eco-friendly products.

This business model may help corporate development and sustainability while reinforcing a positive business reputation, resulting in higher brand awareness by opening up new commercial options.


This may reallocate a considerable amount of our trash back into society by upcycling, improving the lifespan of resources, limiting value loss, and recirculating materials.

As many nations strive to eliminate the massive discharge of dung from animals, using biogas facilities to turn manure into bio-methane, a potential source of energy, can be life-changing. 

Biomethane may minimize waste from cow dung while simultaneously reducing the consumption of fossil fuels for energy, making it a win-win situation.

Benefits of Circular Economy

Waste avoidance, ecodesign, and reuse are examples of strategies that might save EU businesses money while also lowering overall yearly greenhouse gas emissions. Currently, 45 percent of CO2 emissions come from the manufacture of things we use every day.


Moving to a more concentrated towards this kind of economy might have several advantages, including lessening environmental impact, enhancing raw material supply security, increasing competitiveness, spurring innovation, raising economic growth (by 0.5%), and creating jobs.

It has benefits that are operational as well as strategic and brings together a huge potential for value creation within the economic, business, environmental and societal spheres.

1. Environmental Advantages

It has the potential to reduce greenhouse gas emissions and raw material consumption, improve agricultural production, and lessen the negative externalities that the linear model causes.

By 2030, the development route might halve carbon dioxide emissions compared to 2018. It has a favorable impact on the planet's ecosystems and helps to combat excessive natural resource exploitation.

2. Soils that are Healthy and Resilient

The principles of Circular Economy in the farming system ensure that key nutrients are returned to the soil through anaerobic processes or composting, softening land, and natural ecosystem exploitation. 

As trash is returned to the soil, the soil becomes healthier and more robust, allowing for better balance in the ecosystems that surround it.

3. Employment Increases

Greater local employment in entry-level and semi-skilled occupations can be achieved by combining the development of a circular economy model with new legislation (including taxation) and labor market structure.

4. Profitable New Ventures

Businesses that adopt the circular economy model can save input costs and, in certain situations, develop new profit streams. 

Profit potential in this circular sphere may arise from entering new markets, reducing costs through waste and energy savings, and ensuring supply continuity.

Raw Materials

5. Saving of Resources

A circular economy model with more resources can save a greater amount of material. 

Given that the overall demand for materials is expected to rise as the world's population and middle classes develop, a circular economy reduces material consumption by avoiding landfills and recycling and focusing on making materials' cycles last longer.

6. Increased Economic Growth Potential

Increased income from new circular activities, along with lower manufacturing costs achieved by making items and materials more useful and readily dismantled and reused, has the potential to boost GDP and hence economic growth.

7. There will be fewer negative externalities

Negative externalities such as land usage, soil, water, and air pollution, as well as hazardous chemical emissions and climate change, are better handled when the circular economy's principles are followed.



1. A circular economy is an industrial system designed to be restorative or regenerative. 

2. It aims to eliminate waste through the superior design of materials, products, systems, and business models.

3. It aims at replacing the end-of-life concept with:

    ♦ restoration, 

    ♦ shifting toward the use of renewable energy, 

    ♦ eliminating the use of toxic chemicals that impede reuse and return to the biosphere, and 

    ♦ eliminating waste through the superior design of materials, products, systems, and business models.

4. The goal of this model is to eliminate waste at its heart.

5. It is founded on three principles, all of which are:

    ♦ Waste and pollution must be eliminated.

    ♦ Products and materials should be circulated (at their highest value)

    ♦ Nature should be regenerated.

6. It provides the tools we need to combat climate change and biodiversity loss while meeting critical social needs.

7. It empowers us to increase wealth, job creation, and resilience while simultaneously reducing greenhouse gas emissions, waste, and pollution.

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Research & Authored by Ankit SinhaLinkedIn  

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