Circular Economy
What is a Linear Economy?
From the past to the present, the Linear Economy model has been applied.
Linear Economy: The traditional model
• Natural resources are extracted.
• Products are manufactured using natural resources.
• Products are consumed.
• What remains after consumption is treated as waste and disposed of.
This traditional model has led to a “take–make–dispose” society. The consumption-oriented “Linear Economy” has become unsustainable in a world of growing population and shrinking natural resources.
What is the Chain Economy?
Today, the increasing complexity of business and social structures, rising costs, growing environmental awareness and the importance of efficiency have led to the implementation of the chain economy.
Chain Economy: The current model
• Natural resources are extracted.
• Products are manufactured and consumed.
• What remains
• is either treated as waste and disposed of;
• or it is turned into a lower-quality product (downcycling).
Downcycling is the transformation of waste materials or unusable products into new materials or products that are of lower quality or functionality than the original product and not necessarily better in terms of environmental impact.
In the chain economy, for some materials such as glass, recycling can be successfully implemented without downcycling effects.
Why Do We Need a New Economic Model?
In recent years, the growing scale of environmental, economic and social challenges has rendered the solutions offered by the “chain economy” insufficient. Considering the climate crisis — the greatest environmental threat — efforts to achieve the UN Sustainable Development Goals, and the rapid advancement of technology, science and knowledge, the “circular economy” has emerged as a model that provides maximum resource efficiency and more effective solutions.
What is the Circular Economy?
The circular economy is a sustainable economic model in which products, components and raw materials are kept in the system for as long as possible, waste is minimized and value is maximized. It aims to ensure the efficient use of natural resources, prevent waste and align systems with nature.
Circular Economy: The model that is targeted and being transitioned to
• It includes sustainable production, sustainable consumption and upcycling processes instead of downcycling.
• Waste is minimized (“zero waste”).
• Everything that remains is not treated as waste, but as a resource.
Upcycling is the transformation of waste materials or unusable products into new materials or products of higher quality or with better environmental performance.
From a broader perspective, the philosophy of the circular economy involves transforming the existing economic model to incorporate ideas such as the sharing economy, new business models and eco-design.
In the circular economy, “closing the loop” is essential for achieving resource efficiency.
What does a “closed loop” — that is, a circular system — mean?
• Extending the service life of products before they reach the end of their useful life (durability);
• Reducing the use of hazardous or hard-to-recycle materials and replacing them with new materials(substitution);
• Creating markets for recycled materials (standards, green public procurement);
• Designing products so they are easier to repair, upgrade and recycle(eco-design);
• Encouraging consumers to reduce waste generation and to separate their waste at a high quality;
• Promoting collection and sorting systems that reduce the costs of recycling and reuse;
• Supporting the formation of industrial symbiosis networks where by-products are exchanged or processed among industries to prevent them from becoming waste (industrial symbiosis);
• Encouraging wider consumer choice by accessing products through leasing instead of ownership (leasing, sharing economy, new business models).
What Are the Advantages of the Circular Economy?
✅ Resource Efficiency: As materials stay in the loop, fewer natural resources are consumed.
✅ Waste Reduction: The amount of waste decreases, reducing the burden on municipalities and industry.
✅ Climate Friendly: Carbon emissions are reduced and net-zero targets become more attainable.
✅ Job Creation: New jobs are created in areas such as repair, maintenance and remanufacturing.
✅ Economic Resilience: Resilience to shocks (pandemics, wars, supply crises) is increased.
