Circular economy is not merely a mindset; it is a strategic sustainability necessity for long-term societal well-being and prosperity.

By optimising production efficiency, reducing harmful emissions and recharacterising waste, manufacturers can play an instrumental role in moving industry toward circular manufacturing practices to improve environmental stewardship.

In brief

• The circular economy replaces the ‘take-make-dispose’ model with closed-loop systems that maximise resource use and minimise waste.
• Circular manufacturing practices require products to be designed for durability, repairability and upgradability – or recycling in some cases – to extend their lifespan and reduce the need for complete replacement.
• Industrial symbiosis is a key example of recharacterising waste streams from one stakeholder or process as inputs for another and advanced recycling technologies provide the ability to create high-quality materials from previously used products.
• Government incentives and consumer education are critical for promoting circular practices.
• The circular economy can lead to long-term operating cost savings for manufacturers and a more resilient supply chain.

Closing the loop on manufacturing

The traditional linear economy, characterised as a ‘take-make-dispose’ model, is facing increased scrutiny as industry invests in environmentally-conscious operations and circular business models. This shift aligns with global efforts to promote environmental stewardship, combat climate change, reduce global greenhouse gas emissions and mitigate resource depletion and ecosystem degradation.

The circular economy departs from the linear model by promoting closed-loop cyclical systems, where resources are kept in use for as long as possible, and process outputs are recharacterised as inputs to other processes. This cycle is broadly distinguished by production, consumption and recycling stages.

This operating philosophy emphasizes minimising waste generation at the source, maximising resource use throughout every stage of production and consumption, and recycling as much refuse as possible. However, implementing this transformative approach requires a shift in conventional manufacturing and consumption mindsets, moving away from the disposable culture ingrained in the linear economy towards systems that prioritise resource reuse and repurposing.

Redesigning for longevity and resource optimisation

Designing for longevity, durability and repairability is a key principle of the circular economy. By creating products that are easily disassembled and upgraded, instead of wholly replaced, manufacturers can extend their useful lifespan and facilitate recovery of valuable components for future use. This modular design enhances repairability and enables component-level upgrades, extending products’ useful life.

Alignment with this design paradigm shift also requires adjustments to manufacturing mindsets, replacing subtractive with additive manufacturing methods – such as 3D printing – where possible to minimise raw material waste. Furthermore, incorporating recycled and renewable materials into manufacturing helps minimise reliance on virgin resources.

Overcoming barriers and embracing new models

Despite its potential for optimisation, adopting circular principles is marred by notable challenges. Existing infrastructure tends to favor linear processes, so the circular economy transition requires investments in new technologies and systems for resource recovery, remanufacturing and recycling.

Policy interventions – such as extended producer responsibility schemes – can incentivise manufacturers to create products for circularity and to share responsibility for their end-of-life management¹ . Furthermore, governments can introduce tax incentives and subsidies to promote circular practices, such as adoption of resource-efficient technologies or recycled materials in manufacturing processes² .

Consumer behaviour also plays a significant role in the success of the circular shift. Public awareness campaigns, educational initiatives and efforts to make repair and recycling services more accessible and affordable are critical for driving behaviour changes.

Transforming waste streams into resource hubs

Core to the circular economy, waste streams – traditionally viewed as byproducts destined for landfills – are reframed as valuable resource repositories. Industrial symbiosis is a clear illustration of this concept, where industry participants collaborate to use byproducts as inputs, enabling reuse of one stakeholder’s waste as another's resource. For example, waste heat from a manufacturing plant can be recovered and used to heat nearby buildings³, while byproducts from food processing can be transformed into animal feed or fertilizer⁴.

Advanced recycling is another requirement for achieving a circular economy. Traditional recycling often focuses on downcycling, where materials are recycled into lower-grade products. By contrast, advanced recycling technologies – such as chemical recycling - enable breakdown of complex materials into their constituent components, creating high-quality materials comparable in quality to virgin resources.

Pyrolysis is plastic’s core chemical recycling process, responsible for breaking up the polymer chains in an oxygen-free environment at around 600°C. The result is a viscous pyrolysis oil, which provides the starting material for further processing. Depending on its weight, the oil is refined into compounds, such as ethene and propene. From these compounds, new plastics can be formed, closing the circle. Other leading plastic recycling technologies include dissolution and depolymerisation.

Water recycling is another angle of the circular economy. As populations – particularly in drought-stricken regions – consider sustainable pathways for water sufficiency, conservation, advanced treatment and reuse are often central components of the solution.

Investing in the research and development of innovative technologies is essential for closing the loop on material flows, promoting stewardship of natural resources and minimising the need for landfill disposal. Doing so requires collaboration among industry, research institutions and policymakers to create supportive frameworks for technology adoption and scaling.

A catalyst for economic growth in some markets

The impact of transitioning to a circular economy can extend beyond environmental benefits. With the right infrastructure, manufacturers can achieve cost savings over time through reduced reliance on raw materials and energy-intensive production processes. Resource optimisation and waste reduction can increase long-term profitability and from a supply chain perspective, circularity fosters resilience by reducing dependence on volatile global supply chains for raw materials.

As industry adopts the circular economy, it is expected to generate new jobs in areas such as remanufacturing, repair and waste management. These new job sectors will require specialised skills, compelling investment in education and training programs to equip the workforce with the necessary proficiencies.

Building a sustainable industrial future

Mitigating the environmental impact of industrial processes is paramount to the success of the circular economy. This requires implementing cleaner production technologies, optimising resource use and minimising emissions and waste at every stage of the production cycle.

Embracing circularity requires a holistic approach, considering the entire lifecycle of a product and its impact on the environment from raw material extraction to end-of-life management. As awareness grows and successful circular business models – such as industrial symbiosis – proliferate, industry is leading the way in efficient resource utilisation.

Circular economy is not merely a mindset; it is a strategic sustainability necessity for long-term societal well-being and prosperity. By embracing the principles of resource optimisation, waste minimisation, energy efficiency and closed-loop production systems, industry can help create a more sustainable world.

Frequently asked questions

What are the main challenges of implementing a circular economy?

There are three notable challenges to adopting circular principles:

1. Existing infrastructure: Most manufacturing systems currently are geared towards linear processes, requiring investments in new technologies and infrastructure for resource recovery, remanufacturing and recycling.

2. Lack of policy and incentives: Government policies, like extended producer responsibility and tax incentives, can encourage manufacturers to design for circularity and to more closely manage and plan for product end-of-life.

3. Traditional consumer behaviour: Shifting consumer mindsets away from a disposable culture requires public awareness campaigns, educational initiatives and making repair and recycling services more accessible and affordable.

How does the circular economy benefit manufacturers?

While the circular economy prioritises environmental benefits, it can also be advantageous for manufacturers, providing opportunities for:

1. Cost savings: Reduced reliance on raw materials and energy-intensive production processes leads to long-term cost reductions.

2. Resource optimisation and waste reduction: Creates a more resilient supply chain by lessening dependence on volatile raw material markets.

3. New job creation: The circular economy provides new job opportunities in areas like remanufacturing, repair and waste management.

What are some examples of a circular economy in action?

Industrial symbiosis and advanced recycling are two circular trends gaining traction. Industrial symbiosis is the collaboration of two or more industry stakeholders to utilise some waste streams as inputs to other processes, for instance, reuse of waste heat from industrial processes to provide heating in nearby buildings. Chemical recycling is the best current example of advanced recycling, which breaks down complex materials into their base components to create sustainable recycled materials comparable in quality to virgin resources.

Endnotes

1. https://www.ellenmacarthurfoundation.org/extended-producer-responsibility/epr-statement

2. https://eitrawmaterials.eu/wp-content/uploads/2020/07/EIT-RawMaterials-project-POLICE-Final-report.pdf

3. https://www.us.endress.com/en/focus-topics/manage-energy-measurement-insights/industrial-energy-heavy/cs-efficieny-cooling-systems

4. https://www.nature.com/articles/s43016-022-00589-6