What is Circular Economy ?
To answer this question, we can quote Antoine Lavoisier, an 18th century philosopher :
Indeed, one of the objectives of the circular economy is to create flows that allow us to re-inject our “waste” into loops in order to recover it. However, the circular economy is not limited to the end-of-life management of products. This alternative model offers multiple high-performance and sustainable solutions compared to our linear economic model, which we will present below.
The Linear Economy : our current economic model
Before introducing you to the notion of a circular economy, we must first present the concept that opposes it: the linear economy, our current economic model. The linear economy is the economy as we know it today and has been prevailing since the first industrial revolution. It consists of “extracting, producing, consuming and disposing”.
Today, this model has reached its limits and is not sustainable for the environment and human societies. Indeed, it is based on the intensive use of fossil fuels (oil and coal); energy extracted from our non-renewable subsoil. The rapid growth of our consumption over the last century has led to the depletion of our resources (metals, organic matter, fresh water, etc.). For example, in France, between 2000 and 2006, 120 km² of soil was artificialized each year**, the equivalent of 12,000 rugby fields, which has dramatic consequences on biodiversity.
On the other hand, this economic model has irreversibly changed the state of the Earth. Indeed, scientists have identified 9 planetary limits that must not be exceeded to avoid a change in the state of the Earth system. Since 2015, 4 limits have been exceeded: change in the chemical composition of the atmosphere (i.e. climate change), erosion of biodiversity (in terms of number of species and populations), disruption of the biogeochemical cycles of phosphorus and nitrogen, and change in land use (notably caused by deforestation)**.
Finally, society is accumulating more and more materials, preventing them from being recycled. Even if recycling has been anchored for decades in certain sectors (such as the paper and steel industry), it is not sufficient as a sustainable solution to our over-consumption. For example, in 2017, a French person produced an average of 514 kg of household waste per year and only 43% of this waste was recycled*.
The Circular Economy : a sustainable model
Thus, we need to change our economic model and take concrete actions, beyond recycling, to reduce the environmental and social impact of our consumption patterns. The circular economy is a solution that more and more businesses, communities and citizens are turning to in order to produce and consume in a more sustainable way.
The ADEME (the French Environment and Energy Management Agency) defines the circular economy as :
“An economic system of trade and production which, at all stages of the life cycle of products (goods and services), aims to increase the efficiency of resource use and reduce environmental impact while enhancing the well-being of individuals.”
Through more efficient management of resources, the circular economy makes it possible, in particular, to limit waste and the environmental impact of human activities. It is therefore opposed to the linear economy, which does not take these two criteria into account, and is largely inspired by natural ecosystems. The stakes and interests of a circular economy are multiple, particularly concerning food production capacities. Indeed, one of the long-term effects of climate change is the weakening of our capacity to produce field crops (corn, rice, wheat, etc.). By 2050, wheat production is expected to decline by 42%**.
Faced with growing demographics, it is therefore absolutely necessary to develop more efficient and sustainable production methods.
Some policy levers in the history of the development of Circular Economy
At the European level, there is a European circular economy prosecutor’s office, which has amended existing directives to adapt them to the principles of the circular economy, in particular for waste management. One of the major objectives of the European Union is to recycle 65% of municipal waste by 2030.
In France, the government uses the ADEME definition of the circular economy as well as the life cycle approach of a product (from eco-design to recycling).
In 2018, the Circular Economy Roadmap has put in place regulatory measures to encourage businesses to undertake circular economy initiatives. For example, the circular tax allows to reduce the externalities of sustainable offers and some sectors, like the packaging, construction and automobile industries, have the obligation to integrate recycled materials in their new products.
In February 2020, the Anti-Waste Law for a Circular Economy was enacted. The issues addressed in this law are: getting rid of disposable plastic, better informing the consumer, fighting against waste and for solidarity reuse, acting against programmed obsolescence and better production. The recycling objectives of this law will reduce the carbon impact as much as the planned closure of the four coal-fired power plants in France.
The 3 areas & 7 pillars of Circular Economy
It is easy to think that the circular economy is reduced to the end-of-life management of a product. However, circular economy goes far beyond simple recycling. It is characterized by three main areas, each of which represents a part of the life cycle of a product or service. These 3 areas are themselves segmented into 7 pillars, or key concepts, to develop a circular economy approach.
First area : The offer of economic stakeholders
The first area is the offer of economic stakeholders which is characterized by 4 pillars. It allows the integration of circular economy approaches upstream of the life cycle of a product or service.
Sustainable supply is a supply that “concerns the way in which resources are exploited/extracted with a view to their efficient exploitation by limiting scrap and environmental impact for renewable and non-renewable resources”. ***
Sustainable supply lies in the establishment of a system where the exploitation and extraction of resources is thought in terms of available stock and renewal capacity. It is also essential to consider the environmental impact of the exploitation of these resources. Therefore, sustainable sourcing favors the use of recycled raw materials which, in the vast majority of cases, have a lower environmental impact than the exploitation of virgin raw materials.
Among the initiatives met by CirculAgronomie and favoring sustainable supplies are the Brussels Beer Project, a Brussels brewery that produces beer from unsold bread rather than using malt, or EtNISI, a French company that makes various objects (furniture, tiles…) from construction or food waste, such as bricks or mussel shells.
Eco-design is the act of “designing an offer of products (goods or services) more respectful of the environment” ***. Concretely, it is a question of considering the impact of a product throughout its life cycle, i.e. from the extraction of the resources needed to create it to the end of the product’s life. Meanwhile, the Life Cycle Assessment (LCA) of the product will account for the environmental impact of each stage of its life cycle: industrial transformation, transport, use.
Eco-design therefore means considering this systemic assessment of the environmental impact from the product design stage and seeking to reduce this impact as much as possible. With the emergence of Corporate Social Responsibility (CSR) and the demand for transparency on the impact of the products consumed, eco-design is increasingly becoming part of companies’ R&D strategies.
*Example taken from the MOOC Vers la performance environnementale des produits alimentaires (Towards environmental performance of food products), organized by AgroParisTech.
It is “a method of organization between companies which gives them the possibility to exchange flows or pool needs from one another. It aims to optimize the resources in a territory, whether it is energy, water, materials, waste, but also equipment and expertise, via a systemic approach inspired by the functioning of natural ecosystems”. ***
The objectives of industrial and territorial ecology are to :
- Recycle waste
- Minimize emissions of substances
- Reduce resource and energy consumption
- Produce more energy with less fossil carbon
All this is done at the scale of a territory or a business ecosystem.
Among the initiatives met by CirculAgronomie is the SMICVAL (Syndicat Mixte Intercommunal de Collecte et de Valorisation du Libournais Haute-Gironde), a local authority that collects and recycles household waste from 138 towns. For example, organic waste is recycled into compost for the region’s wine growers.
This concept “privileges use over possession and tends to sell services related to products rather than the products themselves”. ***
In particular, this makes it possible to increase the satisfaction of the need with fewer resources.
The functional economy is based on 6 principles:
This type of approach is difficult to set up because it requires a major organizational change for a company but it is economically very interesting in the long term for the manufacturer and for the customer.
A world-famous example is the Michelin company which has set up the sale of tyres for heavy trucks. They pay per kilometre travelled rather than for the tyre itself. This allows a 50% reduction in the energy and raw materials used in tyres and lowers the customer’s prices while increasing the manufacturer’s profitability.
Second area : Consumer demande and behaviour
The second area of the circular economy is consumer demand and behavior and is characterized by 2 pillars. It allows the integration of circular economy approaches downstream of production, during the purchase and use of a product or service.
It is a consumption that “must lead the buyer, whether he is an economic actor (private or public) or a citizen-consumer, to make his choice by taking into account the environmental impacts at all stages of the life cycle of the product (goods or services)”. ***
Consumption includes the acquisition, use and disposal of a good or service. Responsible consumption meets needs while reducing the ecological impact and maintaining the quality of life of individuals and the community. This is achieved through responsible purchasing, collaborative consumption, reuse, life extension and self-production.
Among the initiatives met by CirculAgronomie is Fruta Feia, a Portuguese company that buys from farmers fruit and vegetables that are out of caliber and therefore unsaleable in medium and large supermarkets. The products are then sold to consumers in baskets, which promotes the local food network and significantly reduces food waste.
“The extension of the period of use by the consumer leads to resorting to repair, sale or giving of second-hand goods, or the purchase of second-hand goods for reuse or re-use.” ***
Many products today have a shorter life than expected. Aesthetic obsolescence, especially due to the influence of advertising, is driving the consumption of new products. Functional obsolescence leads to the purchase of an entire product rather than the replacement of a defective component. There is also programmed obsolescence, which is deliberately implemented by the manufacturer to increase the replacement rate of a product, and which has been a crime in France since 2015. To counter these obsolescences, there are more and more innovative approaches such as the Repair Café, a collaborative repair workshops, which, thanks to mutual aid, make it possible to repair household appliances or electronics, or even clothing.
Third area : Waste management
Finally, the third area of the circular economy is waste management and is represented by a single pillar : recycling. It is a process that takes place downstream in the life cycle of a product.
Recycling is “the use of waste as raw materials”. ***
On average, household waste represents 10% of a territory’s waste and less than 40% of this waste is recycled. In France, households produce the equivalent in weight of 10 Eiffel Towers of waste every day. In addition to reducing our environmental impact, developing recycling channels is very advantageous because these channels are very important sources of job creation that cannot be relocated (compared to incineration) and allow cooperation between players (methanization on a territorial scale, for example).
Among the initiatives met by CirculAgronomie is Naga Earth, a social enterprise based in Cambodia, one of whose first projects was to create biodiesel made from recycled vegetable oils, derived from used cooking oil from restaurant owners in the town of Siem Reap.
*** definitions by the French Environment and Energy Management Agency (ADEME)
The circular economy can be perceived at different levels :
- The circular economy, at the “local” or “product approach” level, which consists mainly of using less energy and materials ;
- The genuinely circular economy has a more global approach and takes into account all of society’s flows in terms of resource consumption;
- The perma-circular economy is an economy that adjusts to planetary limits and tends to reduce flows in general.
The transition to a circular economy is under way. Businesses, through eco-design, are producing more durable goods. Territories are increasing their autonomy by using renewable resources and developing local networks. Finally, citizens, through their implications and commitments, are changing their consumption patterns to be more responsible.
In order for a circular economy approach to be successful, it is necessary to experiment, innovate, work over the long term, have a systemic vision and promote proximity and cooperation between the players. This is what CirculAgronomie wants to promote. Thanks to our online encyclopedia, enriched year after year by analyzing projects from around the world, we wish to highlight the diversity of circular economy approaches and their success. We want to demonstrate that the alliance of sustainability and economic performance is possible.
The information with ** comes from the MOOC Circular Economy and Innovation proposed by the Université Virtuelle Environnement et Développement Durable (UVED) and accessible free of charge on fun-mooc.fr. (in French)
Here is a video made by the Ellen MacArthur Foundation, to help you understand what is the Circular Economy :