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The 7 steps of a circular economy

The extraction and processing of natural resources produces over half of all carbon emissions linked to global climate change. Dramatically curtailing these emissions and the manufacture of virgin plastics presents exciting opportunities for us all. Imagine an economy that could reuse its raw materials in a perpetual, zero-waste cycle: the Circular Economy. How can we get there? We asked an expert, Dr. Henning Wilts, to map out this journey for us.

 

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Design, business model, logistics

Zero waste is the apex of sustainability. How does a circular economy help us achieve it? “The key characteristic of the circular economy is that you try to preserve the value of raw materials and products after they have been used,” explains Wilts. “That requires that you start with the design. It has to be recyclabe. You have to develop business models that are based on selling a service, instead of a product, and making products as durable as possible and it also depends on the logistics, the waste infrastructure: you have to collect and recycle waste, so that industry views it as an actual alternative to virgin material and can increase the share of recycled material in products.”
 

79% of all plastic ever made has accumulated in landfills or the natural environment.

Collaborating on systemic solutions
The challenge lies in the coordination. Countries and regions may have competing interests or approaches. “You have specific regulations, policies, business strategies, for every single step,” Wilts notes. And circular economy proponents may also have to act as both translators and diplomats amid the various sectors in the value cycle. Designers are not necessarily trained to consider the recyclability of their work, nor are business model developers accustomed to asking, “What happens to my product once I’ve sold it to a customer?” “Bringing all of these people together,” says Wilts, “and thinking about systemic solutions - that is the thing that makes the circular economy so interesting.”

A systemically conceived and sustainable circular economy will allow economic growth to be absolutely decoupled from resource consumption.

Circular Economy Roadmap for Germany Vision Statement

Thus, products designed with a view to streamlining their eventual recycling; service-oriented business models that stress product quality, rather than planned obsolescence; and recycling processes that suit manufacturers’ needs: these are the keys to making the circular economy a reality. The rewards, observes Wilts, go beyond a healthy planet: there is a fortune to be made by those who achieve circularity.

The cycle of a circular economy

1. Raw materials: Acquisition of raw materials makes extraction processes more efficient and creates new businesses due to the circularity of products.
Get more detailed insights with the following audio commentary: Raw materials (juliusbaer.com)
2. Design: The development of new, alternative and innovative products and services with greater added value.
Get more detailed insights with the following audio commentary: Design (juliusbaer.com)
3. Production/Remanufacturing: Increased process efficiency, reduced costs and, consequently, increased margins and income, through reduction on energy costs and raw materials acquisition.
Get more detailed insights with the following audio commentary: Production remanufacturing (juliusbaer.com)
4. Distribution: The best logistics practices and techniques facilitate transportation and distribution, avoiding unnecessary and costly travel.
Get more detailed insights with the following audio commentary: Distribution (juliusbaer.com)
5. Consumption, use, reuse, repair: Reducing consumption means distributing a product or service and prolonging its life to minimize wasteful manufacturing and waste. Repairing equipment prevents faster and cheaper waste conversion. 
Get more detailed insights with the following audio commentary: Consumption use reuse repair (juliusbaer.com)
6. Collection: The collection process must be customized to regional realities: a good collecting method in the city is not necessarily the best in rural regions, and Urban Solid Waste may not be the best for industrial waste. 
Get more detailed insights with the following audio commentary: Collection (juliusbaer.com)
7. Recycling: The products maintain, in their composition, a reduced amount of different materials, facilitating the segregation process and making the recycling processes more efficient. 
Get more detailed insights with the following audio commentary: Recycling (juliusbaer.com)