How Circular is the Circular Economy?

The circular economy – the newest magical word in the sustainable development vocabulary – promises economic growth without destruction or waste. However, the concept only focuses on a small part of total resource use and does not take into account the laws of thermodynamics.

Illustration: Diego Marmolejo.

This article has been translated into French and Dutch.

Introducing the Circular Economy

The circular economy has become, for many governments, institutions, companies, and environmental organisations, one of the main components of a plan to lower carbon emissions. In the circular economy, resources would be continually re-used, meaning that there would be no more mining activity or waste production. The stress is on recycling, made possible by designing products so that they can easily be taken apart.

Attention is also paid to developing an “alternative consumer culture”. In the circular economy, we would no longer own products, but would loan them. For example, a customer could pay not for lighting devices but for light, while the company remains the owner of the lighting devices and pays the electricity bill. A product thus becomes a service, which is believed to encourage businesses to improve the lifespan and recyclability of their products.

The circular economy is presented as an alternative to the “linear economy” – a term that was coined by the proponents of circularity, and which refers to the fact that industrial societies turn valuable resources into waste. However, while there’s no doubt that the current industrial model is unsustainable, the question is how different to so-called circular economy would be.

Several scientific studies (see references) describe the concept as an “idealised vision”, a “mix of various ideas from different domains”, or a “vague idea based on pseudo-scientific concepts”. There’s three main points of criticism, which we discuss below.

Too Complex to Recycle

The first dent in the credibility of the circular economy is the fact that the recycling process of modern products is far from 100% efficient. A circular economy is nothing new. In the middle ages, old clothes were turned into paper, food waste was fed to chickens or pigs, and new buildings were made from the remains of old buildings. The difference between then and now is the resources used.

Before industrialisation, almost everything was made from materials that were either decomposable – like wood, reeds, or hemp – or easy to recycle or re-use – like iron and bricks. Modern products are composed of a much wider diversity of (new) materials, which are mostly not decomposable and are also not easily recycled.

For example, a recent study of the modular Fairphone 2 – a smartphone designed to be recyclable and have a longer lifespan – shows that the use of synthetic materials, microchips, and batteries makes closing the circle impossible. Only 30% of the materials used in the Fairphone 2 can be recuperated. A study of LED lights had a similar result.

The large-scale use of synthetic materials, microchips, and batteries makes closing the circle impossible.

The more complex a product, the more steps and processes it takes to recycle. In each step of this process, resources and energy are lost. Furthermore, in the case of electronic products, the production process itself is much more resource-intensive than the extraction of the raw materials, meaning that recycling the end product can only recuperate a fraction of the input. And while some plastics are indeed being recycled, this process only produces inferior materials (“downcycling”) that enter the waste stream soon afterwards.

The low efficiency of the recycling process is, on its own, enough to take the ground from under the concept of the circular economy: the loss of resources during the recycling process always needs to be compensated with more over-extraction of the planet’s resources. Recycling processes will improve, but recycling is always a trade-off between maximum material recovery and minimum energy use. And that brings us to the next point.

How to Recycle Energy Sources?

The second dent in the credibility of the circular economy is the fact that 20% of total resources used worldwide are fossil fuels. More than 98% of that is burnt as a source of energy and can’t be re-used or recycled. At best, the excess heat from, for example, the generation of electricity, can be used to replace other heat sources.

As energy is transferred or transformed, its quality diminishes (second law of thermodynamics). For example, it’s impossible to operate one car or one power plant with the excess heat from another. Consequently, there will always be a need to mine new fossil fuels. Besides, recycling materials also requires energy, both through the recycling process and the transportation of recycled and to-be-recycled materials.

To this, the supporters of the circular economy have a response: we will shift to 100% renewable energy. But this doesn’t make the circle round: to build and maintain renewable energy plants and accompanied infrastructures, we also need resources (both energy and materials). What’s more, technology to harvest and store renewable energy relies on difficult-to-recycle materials. That’s why solar panels, wind turbines and lithium-ion batteries are not recycled, but landfilled or incinerated.

Input Exceeds Output

The third dent in the credibility of the circular economy is the biggest: the global resource use – both energetic and material – keeps increasing year by year. The use of resources grew by 1400% in the last century: from 7 gigatonnes (Gt) in 1900 to 62 Gt in 2005 and 78 Gt in 2010. That’s an average growth of about 3% per year – more than double the rate of population growth.

Growth makes a circular economy impossible, even if all raw materials were recycled and all recycling was 100% efficient. The amount of used material that can be recycled will always be smaller than the material needed for growth. To compensate for that, we have to continuously extract more resources.

Growth makes a circular economy impossible, even if all raw materials were recycled and all recycling was 100% efficient.

The difference between demand and supply is bigger than you might think. If we look at the whole life cycle of resources, then it becomes clear that proponents for a circular economy only focus on a very small part of the whole system, and thereby misunderstand the way it operates.

Accumulation of Resources

A considerable segment of all resources – about a third of the total – are neither recycled, nor incinerated or dumped: they are accumulated in buildings, infrastructure, and consumer goods. In 2005, 62 Gt of resources were used globally. After subtracting energy sources (fossil fuels and biomass) and waste from the mining sector, the remaining 30 Gt were used to make material goods. Of these, 4 Gt was used to make products that last for less than one year (disposable products).

Illustration: Diego Marmolejo.

The other 26 Gt was accumulated in buildings, infrastructure, and consumer goods that last for more than a year. In the same year, 9 Gt of all surplus resources were disposed of, meaning that the “stocks” of material capital grew by 17 Gt in 2005. In comparison: the total waste that could be recycled in 2005 was only 13 Gt (4 Gt disposable products and 9 Gt surplus resources), of which only a third (4 Gt) can be effectively recycled.

About a third of all resources are neither recycled, nor incinerated or dumped: they are accumulated in buildings, infrastructure, and consumer goods.

Only 9 Gt is then put in a landfill, incinerated, or dumped – and it is this 9 Gt that the circular economy focuses on. But even if that was all recycled, and if the recycling processes were 100% efficient, the circle would still not be closed: 63 Gt in raw materials and 30 Gt in material products would still be needed.

As long as we keep accumulating raw materials, the closing of the material life cycle remains an illusion, even for materials that are, in principle, recyclable. For example, recycled metals can only supply 36% of the yearly demand for new metal, even if metal has relatively high recycling capacity, at about 70%. We still use more raw materials in the system than can be made available through recycling – and so there are simply not enough recyclable raw materials to put a stop to the continuously expanding extractive economy.

The True Face of the Circular Economy

A more responsible use of resources is of course an excellent idea. But to achieve that, recycling and re-use alone aren’t enough. Since 71% of all resources cannot be recycled or re-used (44% of which are energy sources and 27% of which are added to existing stocks), you can only really get better numbers by reducing total use.

A circular economy would therefore demand that we use less fossil fuels (which isn’t the same as using more renewable energy), and that we accumulate less raw materials in commodities. Most importantly, we need to make less stuff: fewer cars, fewer microchips, fewer buildings. This would result in a double profit: we would need less resources, while the supply of discarded materials available for re-use and recycling would keep growing for many years to come.

It seems unlikely that the proponents of the circular economy would accept these additional conditions. The concept of the circular economy is intended to align sustainability with economic growth – in other words, more cars, more microchips, more buildings. For example, the European Union states that the circular economy will “foster sustainable economic growth”.

Even the limited goals of the circular economy – total recycling of a fraction of resources – demands an extra condition that proponents probably won’t agree with: that everything is once again made with wood and simple metals, without using synthetic materials, semi-conductors, lithium-ion batteries or composite materials. 

Kris De Decker

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References:

Haas, Willi, et al. "How circular is the global economy?: An assessment of material flows, waste production, and recycling in the European Union and the world in 2005." Journal of Industrial Ecology 19.5 (2015): 765-777.

Murray, Alan, Keith Skene, and Kathryn Haynes. "The circular economy: An interdisciplinary exploration of the concept and application in a global context." Journal of Business Ethics 140.3 (2017): 369-380.

Gregson, Nicky, et al. "Interrogating the circular economy: the moral economy of resource recovery in the EU." Economy and Society 44.2 (2015): 218-243.

Krausmann, Fridolin, et al. "Global socioeconomic material stocks rise 23-fold over the 20th century and require half of annual resource use." Proceedings of the National Academy of Sciences (2017): 201613773.

Korhonen, Jouni, Antero Honkasalo, and Jyri Seppälä. "Circular economy: the concept and its limitations." Ecological economics 143 (2018): 37-46.

Fellner, Johann, et al. "Present potentials and limitations of a circular economy with respect to primary raw material demand." Journal of Industrial Ecology 21.3 (2017): 494-496.

Reuter, Markus A., Antoinette van Schaik, and Miquel Ballester. "Limits of the Circular Economy: Fairphone Modular Design Pushing the Limits." 2018

Reuter, M. A., and A. Van Schaik. "Product-Centric Simulation-based design for recycling: case of LED lamp recycling." Journal of Sustainable Metallurgy 1.1 (2015): 4-28.

Reuter, Markus A., Antoinette van Schaik, and Johannes Gediga. "Simulation-based design for resource efficiency of metal production and recycling systems: Cases-copper production and recycling, e-waste (LED lamps) and nickel pig iron." The International Journal of Life Cycle Assessment 20.5 (2015): 671-693.

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Comments

[Tristan]

(1)

Your article is brilliant as always, and sums it all up : Growth is not sustainable. Boundless continuous growth is impossible in an finite and bounded world and must stop sooner or later. Whether in chosen and planned ways, or out of resource depletion, ecologic annihilation and scarcity wars, is up to us to choose, and circular economy pleas just fool us if they don't tackle the growth issue.

I would suggest for those interested to read about François Roddier, should he some day be translated in other languages. He discusses the issue of thermodynamic and entropy in very different aspects of physics, biology, human history and information society. Each time the structures more able to dissipate energy impose themselves to the detriment of the others. It may be the case of galaxies, hurricanes, living cells more adapted to an environment and therefore to thrive until they plunder their resources and disappear or evolve into some more complex or adapted form of life.

The Roman Empire or Capitalism and its techniques as well, impose themselves to everything, provided its stability is based on continuous expansion. You can not plunder twice a village's gold or an oil field, you have to go further to pay your soldiers or lure investors.

Now we could consider the hypothesis of a growthless private means of production system. Or if you prefer a "steady state économy" as classical economists were fearing and J.S. Mill was wishing. Piketty explained us in his best seller that capitalism with a rentabily rate superior to income growth only can create inequality, since a bigger part of the global income is always more invested back in capital.

The issue in which we are with the degrowth claim, is that, once it is admitted and the consistent policies are implemented, nobody would be able to find legitimacy in a system of ownership that creates growing inequality and does not promises plenty and opulence anymore.
That is why the issue of degrowth remain a political taboo even though it is necessary.

[Paul Harris]

(2)

Well said. You can’t square a circular economy with growth. Simple as that.

[Daniel]

(3)

I have to say I disagree with much of what is written here. Yes, growth is difficult to reconcile with sustainable outcomes and may be a major flaw in the circular economy, but try convincing society to cut down or reduce use, and they will flat out reject it. 100% circularity is of course also impossible, but many of the other aims of circular economy are actually on extending lifetimes of our stocks to reduce consumption of resources, be they buildings, electronics or other.

The first priority of fairphone is that the resources used are conflict-free and re-use not recycling. Normally the approach is to say resources in stocks accumulate, then also leave stocks again at some point in the future - this does not have to be in 1-2years as implied, but can also be 100-200 years timescale. Particularly on building we need longer lasting structures to reduce resource use.

The circularity gap report shows how far we are from a circular economy - at the moment they estimate that just 9.1% of resources are cycled worldwide. Even if we manage to get this up to just 20%, would this not be a positive outcome? The point is not that we can't get 100% circularity, rather that it highlights where our current systems waste on such a massive scale today.

Circular economy communicates these system failures. Take eg mobility: a car is driven 5% of the time, it's efficiency of fuel to movement is maybe 20% and you transport one human with 2 tons of steel. This supposedly efficient production chain represents something like 2% efficiency at doing the task of moving humans. Not only this, but we waste 50% of the space in our cities with roads. So far CE is the only convincing vision where you can also get producers on side politically to change their processes - and they are the ones you ultimately have to convince to stop producing if you follow a 'stop growth' approach.

In the future we will need to aim not just for 100% renewable energy, but abundant renewable energy. Again a pipe dream, but reach it and then you can start to implement recycling processes which currently are unfeasible from an environmental point of view. In fact I don't see the 20% of fossil fuels usage as a dent in the argumentation of circular economy, I see it as another very good reason why we have to stop using fossil fuels.

[Jamie]

(4)

I find this a most negative article which basically says: 'We are doomed - doomed...' I would also quote Goethe: 'Whatever you can do, or dream you can do.....begin it. Boldness has genius, power & magic in it.'

Unless we start, most likely individually, to look at our 'growth' economy and try and come up with solutions, again individually, then a solution or answers will start to happen. Knocking holes in any effort to come up with alternatives is not the answer.

In my lifetime, 66 years, the population has grown from approx. 2 B to now nearly 8 B - one answer to solve the food supply issue is for 1/2 the worlds (Overweight.) population to eat 1/2 of what they are presently eating......

[ijk_ijk]

(5)

"Circular economy" is just another word to try to maintain the same old vision of perpetual growth. Just propaganda.
Only stupid and interested people can count on propaganda slogans.

You are too much soft and kind about these criminal uses of the language. These new words come from people who live in a very rich part of the world, may be big companies or universities and they don't have any idea how to live without cars and credit cards...

http://ravennapensa.blogspot.com/2018/03/economia-circolare.html

[Kostas]

(6)

Very nice article once again. I recommend to use the previous method of referencing by putting the reference number in the point in the text it wants to explain. It makes it easier for someone to go to a specific source to validate a point.

[David Bourguignon]

(7)

"That’s why solar panels, wind turbines and lithium-ion batteries are not recycled, but landfilled or incinerated."

This assertion seems sketchy, to say the least. Eg. there has been recent progress on the solar panels' side: https://www.pv-magazine.com/2018/10/16/high-yield-recycling-of-pv-modules-demonstrated-by-eu-team/

There could be also recent advances regarding the two others. Why not mentioning them? By stating upfront that recycling is currently difficult, you are right. But considering it will always stay so, is dubious, especially if it becomes an economic opportunity (as it is the case for PV panels).

[Amit Baum]

(8)

Although human indiference to our planet's destruction, I wouldn't rule out completely this new mantra. People and industries need general guidelines to follow, and the governments should shape these as best as they can to improve constantly.

After my 2nd master degree in sustainability and numerous sustainability projects, I realized that the best way for me to approach this terrifying and massive global problem is by just trying my best to implement all of the theoretical knowledge that I acquired in this field in changing consumption patterns.

My partner and I left both our jobs and opened DeliKaktus Café ( http://www.delikaktus.de ), a sustainable vegan restaurant and bakery that offers all its food also for take-away with a deposit system. We thrive to minimize waste in the food production and the packaging, and our costumers love the food and the idea in whole. If we would manage to prove that at least the food industry could be 10 folds more efficient and maybe also sustainable, that would be at least a life achievement for us.

[eric]

(9)

That's why, on recycle symbols, it says Reduce first. Demand overwhelms sustainability. Just remember folks, Reduce Reuse Recycle.

[RKP]

(10)

Taking most things to their literal extreme (as this article does) makes them laughable (or cryable). Circular economy is a goal and the value is in the journey, not the unattainable ultimate. The comments to this article are quite good, if a bit obscure and hard to read. (I think Tristan means "Piketty explained to us ... that capitalism with a rentability (profit) rate [higher than] income growth can only create inequality, since a bigger part of the global income is always invested (by the rich) back into capital (to make them richer).') Assume we can find a way out of the inequality trap (a separate question). Then a circular economy, where resources are recycled and 'infinite' solar and wind and/or nuclear energy is added sustainably becomes at least a reasonable target. 'Growth' does not have to be in size. The electronics industry is a beautiful example of how a huge amount of growth in jobs and profits and perceived human value has come while actually decreasing the aggregate physical size of computers, phones and TVs.

[Danno]

(11)

"A product thus becomes a service, which is believed to encourage businesses to improve the lifespan and recyclability of their products."

The push to remove the concept of ownership, thereby undermining consumer law, is one of the prime motivating forces from the Corporate Collective, against society. Personal possession is a keystone to a healthy market, IMO - to have someone else own your necessities, is to introduce serfdom back into our world.

You may only purchase the right to use the King's possessions...

[Tara]

(12)

I really enjoyed this article. I have issues with the idea of the circular economy because of the energy used to transport and collect materials. I live in a rural part of Canada, any materials to be recycled and or processed have to be transported to a recycling or waste depot or site, through local governments. The likelihood of individual companies wanting to have anything to do with rural pick-ups or collection is very remote.
If we look at transitioning to services such as light rather than a light bulb for example, I think the price of everything will just go up and up. This transition has been made for many software packages and with annual fees the costs have gone up considerably for some software.
The same goes for wastes that could be recycled. I have been involved in building demolition projects where everything ends up in the local landfill site, almost nothing is recycled. This is because of a lack of facilities to handle specialized wastes, again in rural locations.
Everything is not doom and gloom as some previous comments have suggested. If we look at what we really need, to live a good life, we will find we need a lot less material goods than most of us have now. We are currently trying to fulfill our non material needs with material stuff. We really need more creativity, participation, connection, recreation and freedom. This does not need more stuff.

[jol25]

(13)

Oblige makers/industries to build final products that you can easily repair or recycle. Plan from scratch the end of life of everything made. This would be a good start... Most of recycle is less energy consuming that building from raw resources.

[Daniel]

(14)

Dear Friends, where is the low tech mindset? We need to create the corporate circles and reject the ladders! Growth-as-practiced is obviously not the way to go but growth IS natural and desirable. Have you ever heard of a rain forest or coral reef that is too dense, too big or experiencing "bad" growth? Of course not!

I appreciate it is too tempting to pick apart, but why not pick a part? Lets explore what could be in our tiny little part of the whole. We know that ecologically there is no such thing as waste. We understand that "waste" is an individual organismal viewpoint and not a part of the whole-earth view. Some things you eat and some things you excrete and never should the two meet! (I'm channeling my inner Doctors: Seuss and Bronners ;)

What would it take to go full circle? How are you trying? Do you recognize that the circle is the key to balancing our planet?

I love this website and your musings....

[Henry]

(15)

Daniel - the rainforest or coral reef will grow until they reach a resource limit. They are self-limiting, unlike humans. Our resource limit will not result in an awakening to a beautiful, social world of wooden windmills and a connexion to natural processes, but a dire population contraction and convulsion, if any people survive the transition from advanced capitalism to enforced steady-state frugality, assuming there's a habitable planet.

Endless growth is impossible, and a drastic reduction in material goods and modes of life that insist on them is the only feasible method of approaching this. That is the only 'sustainable development' and relies on the low-tech and person-heavy.

[Gizem]

(16)

Thank you very much for the article. It explains exactly why I am a dystopian but also want to work in waste management sector. I believe that without getting out of this "growth" mindset, we cannot really stop the destruction of the humanity. However, I also believe that by encouraging reduce, re-use, recycle we can slow it down.

Believing in one day we will close the circle within the current growth based economy is preferable by many who does not want to give up their current lifestyle. More money = more goods and services = more happiness. This should be changed and the happiness or satisfaction should be decoupled from amount or size of the goods that people have.

However, I have difficulties to believe that it will ever happen while the rules are being set by the ones who actually are the back bones of the system intentionally or unintentionally backed up by the vast majority of the public.

That's why at least reducing down the resource and raw material use under the terms of circular economy does not seem to be a bad idea before we destroy our own kind or finally de-growth somehow takes over growth.

[Kurt Scholz]

(17)

This idea of circulation suffers from symmetry assumptions.

Old microchips are silicium like sand and stone. They could be turned into building materials. Plastics can be hydrated into fuels and lubricants.

We really need to get carbondioxide out of the atmosphere and store it. Hydrocarbons such as wood, which can be plastified for longetivity and increased stability, are an opportunity to build up carbon structures.

A demand for wooden buildings would be in an agriculture that builds structures for growing plants in multiple layers on a small spot of land with well managed conditions and use of robotics enhanced labour. Multiple yields can be achieved through energy conversion of sunlight into wavelengths of higher absorption by the chlorophylls.

Another option is biomass enriched soil with thicker humus layers and in turn improved agricultural yields. We have untapped options to make much more of our economy circular through the use of nuclear fusion energy in the form of sunlight and the key seems agriculture and construction.

[Nuno]

(18)

This is great content, both article and comments.

I guess the whole point of the main article is that achieving theoretical 100% circular usage of all global resources it is a very hard task, if not impossible.

That comes with no surprise!

But the framework provided by circular economies theory is a great place to start tackling smaller industries or more particular fields like single use plastics or renewable energy storage.

I see the circular movement as a manifesto. Any progress in any of the circular values will be a small victory regarding sustainable living.

[hugh owens]

(19)

Kris, you and your blog are a real jewel in the rough. I think you have established that a circular economy under a fossil supported industrial economy model is impossible. Our current networked self organizing complex economy is a dissipative structure relying upon energy/matter inputs and absent a continuous energy supply will collapse following 2nd law thermodynamics yielding high entropy.(see Ilya Prigogine for details!).

The implication of this statement if you believe the theory is that new structures are possible and indeed inevitable but this baby reliant as it is on a finite hydrocarbon energy supply is toast now matter how we might wish it were not so. My training is chemistry and physics so I am somewhat trapped in my perspective but the function of our current economic model is physics based and thermodynamically determined in my opinion.

The statement that somebody is a "doomer" by refusing to accept the fact of energy use/transformation going from a low entropy state to high entropy is howling at the moon. Our economy is indeed doomed to follow physical laws. Terrific post as always and some equally terrific posts by some thoughtful people. My location is Wyoming(US) and my age is 74.

[Alex]

(20)

I thought the phrase "Less is more" would be appropriate to this great article, but I'm confusing architecture with E. F Schumacher, "Small is beautiful".

There are still elephants in the room though, population.
So many of the problems facing the world would be either mitigated or solved by a small, beautiful, ethnically diverse population. What would a 1 billion world population mean for our challenge? This doesn't change your argument, a circular economy within a technological society is not feasible, but it would give us more time.

For now the answer isn't the oxymoronic "sustainable growth" it's using what you have for as long as possible.
It's not buying what you don't need. It's not "keeping up with the joneses"

I drive a 56 year old car (on LPG)and Sunday I cut my finger opening up my 2006 iPod video to replace the battery.
It had worked until 2012 and the new battery had been waiting for 2 years.

In the short term, global warming, resource depletion will only mean more government control, Like the remark made above, once everything becomes a product of service, you're at the mercy of others. If a man loses his job and can't pay the rent, he's both hungry and homeless. If he loses his job with a house that's already paid for, he's only hungry.

Kind regards,
Alex

[jke]

(21)

And also please don't forget that the MDB Cradle to Cradle approach addresses much more of your concerns than the EMAF "circular economy" thing that Ellen created out of it (just because the two guys behind C2C are a bit complicated). Circular Economy isn't enough.

[Zanstel]

(22)

I don't understand the critics.
The critic to Circular Economy is that... is it not implemented?

Most of the critics are based on that.

A full implemented circular economy means, by definition, that its sources of energy must be renewable.

Means that waste must not exists or be totally non pollutant (so, not a real waste).

All the critics are based in that circular economy now is not really a circular economy and more a transient stage from open to close (circular) model of economy.

[Riccardo Pusceddu]

(23)

What about producing enough renewable energy to use for making, moving around and recycling stuff? Things that can't be recycled now could with enough energy be recycled. Increasing demand could be satisfied with more energy. And so on.

[Lorenzo]

(24)

Isn't circular economy a lie or an excuse?
Of course it is something, but all our system is based on new stuff.
For example, if a company gets a funding from EU or intermediate public office, you always have to buy new to be refunded.
Other example: if you buy a used car, at least here in Italy, you have high taxes, making not convenient to buy a used car (and convert it to biomethane).

Based on what you state here, supposed that we have enough time, we should rethink the whole market, economy, administration from scratch. I mean the way of thinking of actual humanity

We should make a common effort to change it all but, as problems with supply, food, energy arise, and they will, every country will start pulling the best they can in their own favor.
We just play along with pseudo-solutions, being totally unable to find solutions for such a complex situation.

We should do something to stop growing, but if we do it we start fighting.
An eye opening book is Collapse by Jared Diamond
cheers

[Rob Hitchcock]

(25)

How many TV adverts do you see for pre-used products? Shiny, brand new is still more appealing to people and is a status symbol - education of the consumer may help, but it won't eliminate human psychology or prevailing marketing/sales strategies.