Circular Economy

The Ellen MacArthur Foundation identifies three core principles that support the circular economy, each building on the others to create a full alternative to the linear system.

Principle 1: Design out waste and pollution. In a circular economy, waste is not an inevitable byproduct but a design flaw. Products are designed from the outset so that all materials can be safely returned to either a technical cycle (metals, plastics, synthetic fibres) or a biological cycle (food, natural fibres, wood). This means eliminating toxic substances that prevent recycling, using mono-materials instead of inseparable composites, designing for easy disassembly, and rethinking packaging to minimise or eliminate it entirely. An example is the shift from blister-packed products to minimal cardboard packaging that is easily recyclable.

Principle 2: Keep products and materials in use. The longest possible use of products at their highest value is central to circularity. This is achieved through designing for durability, enabling repair, enabling reuse and redistribution, and, when a product truly cannot be used further, recycling its materials into new products. The 'inner loops' of the circular economy diagram are prioritised: maintenance and repair are preferred over remanufacturing, which is preferred over recycling, because each step down the hierarchy loses some value and requires additional energy.

Principle 3: Regenerate natural systems. Rather than merely doing less damage, the circular economy aims to actively improve the environment. In the biological cycle, valuable nutrients from biodegradable materials are returned to the soil through composting or anaerobic digestion, supporting soil health and reducing the need for synthetic fertilisers. Regenerative agriculture, reforestation, and ecosystem restoration are all aligned with this principle. The goal is an economy that operates within planetary boundaries and contributes to the health of natural systems rather than degrading them.

The transition from linear to circular is not merely theoretical. new businesses across Europe and beyond are already demonstrating that circular business models can be commercially viable and even more profitable than traditional approaches.

Product-as-a-service models shift the focus from selling products to selling the function they provide. Philips, for example, offers lighting-as-a-service to commercial customers. Instead of buying light bulbs and fixtures, customers pay for guaranteed light output. Philips retains ownership of the hardware, maintains it, and has a direct financial incentive to design the most durable, energy-efficient, and easily recyclable equipment possible. This model has been adopted across sectors from carpet tiles to aircraft engines.

Sharing platforms maximise the utilisation of products that would otherwise sit idle for much of their life. Car-sharing services mean one vehicle can serve dozens of users, reducing the total number of cars manufactured. Tool libraries allow neighbourhoods to share drills, saws, and garden equipment that any individual household might use only a few times per year.

Refurbishment and remanufacturing give products a second or third life. Certified refurbished electronics, remanufactured automotive parts, and restored furniture all deliver comparable functionality to new products at lower economic and environmental cost. Industrial remanufacturing can save 80 to 90 percent of the energy and materials that would be needed to produce new components.

Take-back schemes, where manufacturers accept their products back at end of life, close the loop by ensuring materials return to the producer for recycling or reuse. Extended Producer Responsibility legislation in the EU increasingly requires this approach.

Industrial symbiosis is a system where one company's waste stream becomes another's raw material. In the Danish city of Kalundborg, a network of companies has shared waste heat, water, and byproducts for decades, saving millions of euros and preventing thousands of tonnes of waste annually.