Has the circular economy finally reached a positive tipping point?

What is the circular economic? Should we embrace it? When will it become mainstream? Experts weigh in

Positive News has been reporting on the circular economy for over a decade, but hitherto it’s remained a niche concept. Is it finally here? Positive tipping point? Is circularity now a business priority

We gathered two experienced observers to find out: Ella Hedley, the emerging innovation manager at the Ellen MacArthur FoundationMartin Wright, chair of Positive News, and a judge for The Green Alley Award, Europe’s first startup prize for the circular economy. Here’s what they had to say.

Positive News: What is the Circular Economy? 

Ella Hedley:It is easiest to talk about the circular economics by referring to our current economic model, which is a line economy. This system extracts resources from the ground and uses them to create products and materials. Then, those products are either disposed of or burned. A circular economy shifts away from this model and towards a regenerative model. It strives to eliminate pollution and waste, circulate products, and regenerate the environment.

Martin Wright It’s becoming more apparent that doing things the old, linear way is a problem. Whether that’s CO2 emissions being released into the air, throwing away fossil fuel byproducts, or throwing plastic down the drain. There’s a recognition now that we need to move away from the take-make-waste model. Nature is completely circular – it recycles everything – it doesn’t throw stuff away because in nature there is no “away”.

PN: How does the Circular Economy work in the real world.

EH:Our network includes hundreds of businesses who are actively implementing circular economic strategies. We are now launching a public database that will include examples of startups doing exactly that. One of my favorites is WinnowThe weighing scale and bin is AI-enabled. It tracks food waste in commercial kitchens. It helps chefs reduce food waste up to half by tracking food waste in real time. It’s been rolled out across the entire global portfolio of Ikea restaurants. It’s exciting to see larger organisations adopt more circular practices and collaborate with startups to bring in disruptive thinking.

PN: We need to see more adaptations from larger brands.

MW: There’s a real opportunity for major brands to make these ideas mainstream and more politically acceptable. Take Marks & Spencer, which has partnered with Dotte, an online peer-to-peer marketplace for children’s clothing. It encourages customers who have children to return clothes, rather than to dump them. It might sound wacky, but if M&S is doing it, then it becomes normal.

EH:Circular businesses could soon represent 23 percent of the global market, through resale and rental, repair, and remaking. We’ve seen secondhand resale clothing stores like Vinted and Thredup reach billion-dollar valuations but we need to see more collaboration and more scaling up of new business models from bigger brands.

‘There’s a real opportunity for major brands to make these ideas mainstream, says Martin Wright

PN: Is this all driven by consumer demand.

MW:Partly, but certainly not enough. There’s a fantastic little store about a 10-minute walk from my flat called Jarr Market where you take along your own jars and fill them up with detergent or muesli or whatever. There’s no packaging involved. Some supermarkets are trying this idea. but it’s not going to happen fast enough to meet the scale of the challenge in terms of net zero and reducing other wastage problems. It is time for governments to step in and establish a policy framework that accelerates the development of such solutions.

PN: What kind of policy changes are necessary?

MW:All things become instantly economic when carbon is priced. However, we’re not going to get a carbon tax at a meaningful level in the next few years. So, we should tax what we don’t want, not what we do – tax pollution, not people’s income. 

EH: There’s no silver bullet. [The Ellen MacArthur Foundation has] universal circular economy policy goals, which set out a framework for governments, cities, and businesses around the things that need to be taken into consideration, but the same policy won’t work in Africa, for example, as it will for the UK. 

Ella Hedley believes that the circular economy can create jobs and drive economic growth.

PN: How can waste be repurposed in a more positive manner?

EH: As Martin said, there is no “away”. We’ve been throwing away materials that are really valuable and that actually provide input into our economy that we shouldn’t be losing that inherent value from. 

There are companies such as Kaffe Bueno, which take used coffee grounds and use them to make flour for food or cosmetic products with the likes of L’Oreal. Or Back Market, which just became France’s most valuable startup, valued at €5.7bn (£4.9bn). Its entire business model revolves around recycling e-waste. It doesn’t solve the whole problem, but it demonstrates that consumers will interact with a refurbishment model.

MW: Another interesting trend is business clusters, such as Kalundborg in Denmark, where companies establish themselves in industrial clusters so they can reuse each other’s waste materials. One is being developed in Teesside. It is based on chemicals and hydrogen companies. I believe that we will see more of it, and that a more supportive policy environment could speed up up uptake.

Kaffe Bueno transforms coffee grounds into flour for food and cosmetic products. Image: Jose Hernandez-Uribe

PN: What does the circular economy do for the planet and the environment? 

MW:Companies can make more money if they extend the lifecycle of their products by redesigning or repurposing them. This can help shift from selling stock to actually providing a service. It’s about finding ways to ringfence the value of your products rather than let them go to waste.

EH:There is huge potential for economic growth. The circular economy is an economic model. We know that it’s not going to work if the economics don’t work and we’re now seeing that it can create new jobs and deliver massive economic growth, including an estimated €1.8tn (£1.53tn) per year in Europe alone. 

PN: Do you think we need a mindset change from the general population?

MW:There are instances where people have changed from something that was purely round to something that is hideously linear in a matter seconds. This is due to the perverse incentives to buy something cheap. In India, for instance, chai was sold in small quantities by roadside stalls. [biodegradable]Cups, which drinkers threw onto the ground after they were finished. It was fine because it was a complete circular economy – potters constantly made new clay cups. The clay cups were eventually replaced by plastic cups made of thin plastic, but it is still possible to transfer it back.

In India, Chai tea was served with biodegradable clay cups. This is an example of circularity. Image: Aditya Chinchure

PN: So, has the tipping point of the circular economy been reached?

MW:No. There are many points of light, and it is important to try to join them all. Look at things like the Green Alley Award – there are examples of people doing great things.

EH:I was going the exact same. I don’t think it has yet. We’re seeing really hopeful signs of where we’re heading but until we’ve really transformed the global economy, we’re not there.

PN:What will the future look like for the circular economy in the next decade?

MW: Becoming significantly more mainstream or we’re f***ed. Nature offers us a lot for free, and if you pay attention, we can continue to get it for free.

Main image: Guillaume de Germain

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