What is a Circular Economy

The definition of circular economy begins with the consideration of the current economic system, opposing what is known as taking, using and disposing of. Is a model that resembles cyclic behavior in nature and which aims to use resources through various Eco-friendly strategies.

The so-called circular economy is shown as a paradigm shift where practices such as rent, repair, recycle, renew and reuse prevail. This is accompanied by measures that reduce production to the minimum levels allowed and, when it is necessary to use a product, take its elements that cannot be part of the environment for reuse.

In addition, this economic system promotes the manufacture of goods with the highest amount of biodegradable materials and the lowest energy cost. This practice seeks to ensure that products, once they have fulfilled their purpose, can return to nature with the least possible environmental impact. In addition, this complements the intention of reduce the amount of waste until its minimum expression.

The flow of the economy Circular supports green employment, the rational use of natural resources, sustainable development and the closure of the life cycle, something unfeasible under current economic conditions. Its implementation also aims to eliminate abusive practices, such as planned obsolescence and intensive extraction or exploitation that has had devastating effects on different ecosystems.

Principles of the circular economy

To understand better what is the circular economy, we have to look closely at the principles that govern it. In this regard, it is worth noting:

  • Zero waste or zero waste. Within the philosophy of using and reusing, items classified as disposable are reintroduced at the beginning of the value chain for the same or a new production, renewing the cycle. This reuse aims to prolong its useful life, the use of its properties for similar inputs or its transformation into other useful goods.
  • Ecological design. In order to keep goods as long as possible within the system, companies must favor Eco-conception. Thus the production takes into account, from the idea of ​​creation, the possible environmental effects. If the product includes batteries, metal parts or electronic components, it requires a responsible reuse or recycling design.
  • Input Repair. Given the preference of pulling rather than repairing, there is a need to change this way of thinking. The scheduled obsolescence, from which the world’s most important companies profit, must give way to the second life of damaged products. The new should give preference to the second hand or recycled.
  • Use of renewable energies. Fossil fuel consumption is destined to end sooner or later, with other alternative energy sources missing. In nature, various renewable methods prevail that do not have an impact as destructive as conventional ones. This change will be driven by circular economy companies and the new provisions of the European Union in the coming years.
  • Economy of functionality. Within this new paradigm of consumption, the quality and durability of the products is connected with their maximum utility. Therefore, circular economy projects are intended to privilege use rather than possession. The promotion of sustainable development requires the sale of Eco-friendly services and not simply disposable goods with great impact on the environment.
  • Systemic perspective. As in natural environments, the circular economy pursues an integral approach in which each part is connected to each other. When there is a problem within the system, everything related to it is affected. For this reason, it promotes practices that can benefit both the consumer chains and the environment associated with the manufacture of goods.

How does it work?

The foundation of the circular economy in the 80s and its subsequent popularization by the Ellen MacArthur Foundation (2012), reveals the forms of this strategy. In principle, it tries to emulate the flow of energy and matter present in ecosystems, which present minimum energy costs and optimal reuse of waste.

In fact, everything that becomes part of the natural cycles is reinstated to renew the food chain and other fundamental processes. As an economic premise, it seeks that the manufacture of products in the EU and other countries consume the least amount of energy. At the same time, they must include easy-to-disassemble parts for recycling or reuse, allowing their return to the original production system.

For the use of resources, inputs are classified as biodegradable and technical. These raw materials fulfill a specific cycle, which we can summarize as follows:

The bio-cycle

There are many sectors that use organic materials to generate mass consumption goods through their production, transformation, distribution and disposal. The volume of waste from cities and urbanized areas can be used more efficiently through the flow of the circular economy.

As an example, wastewater and waste can be transformed to generate value, while restoring environmental balance through the following practices:

  • The use of composting for its transformation into fertilizer.
  • The implementation of anaerobic digestion, which repairs the soil layers and produces bio-gas.
  • The extraction of biochemical inputs in bio-refineries, which can be useful in the preparation of other products or in obtaining energy.
  • The application of materials and cascading elements to preserve the inputs in the system for longer. This method is guided by hierarchical use: reuse, repair, recycle, valorize and more.

The technical cycle

As part of sustainable development, this method seeks to reduce the exploitation of natural resources and at the same time reduce energy consumption. To reduce the ecological footprint, CO2 emissions and generate less waste, it is important to extend the useful life of mass consumption products.

In addition to promoting ecodesign, this cycle is based on measures such as:

  • Second use or reuse. This is intended to reuse the input for the purpose that was created or make changes or improvements to extend its durability.
  • Restoration. Similar to the idea of ​​refurbishing, the repair of the fundamental components that represent its greatest value is applied to achieve an almost original product.
  • Re-manufacturing. Through this practice, companies take advantage of recovered parts to create other inputs that may be useful.
  • Recycling. It is the most common and consists of using industrial waste as raw material to manufacture goods for the population or other companies.


Given the prospects of the current ecological footprint generated by the linear economic model, economic dependence, resource exploitation and climate change, many countries recognize the need to change to a more sustainable model. Among the most important advantages to adopt to a circular flow of economy, we can mention:

  • Eco-design, reuse and waste reduction can save 600 thousand euros for the European Union and other economies. In addition, the emission of greenhouse gases decreases from 2 to 4%.
  • The closed cycle model offers national economies an important competitive advantage within the globalization, since they may gradually decrease their imports and their external dependence.
  • The implementation of this new paradigm guarantees a better supply of raw materials, reduces pressure on ecosystems, generates employment, innovation and sustainable development.
  • In addition to reducing energy consumption, circular economy projects offer the possibility of better life quality, more durable and innovative products and more savings for personal or family finances.

Differences between linear and circular economy

In a world where consumption prevails over social responsibility, changes are not easy to implement, especially if most of the system has favored this strategy. This kind of wild capitalism is responsible for 20% of the population generating 80% of the waste. In addition, with the current rate for 2050, 70% more food and 40% more energy and water will be needed; An unsustainable situation.

That is why it is important to know the differences between the linear economy and the circular economy:

  • While the circular economy seeks a closed cycle for production, the linear economy encourages the slogan: buy, use and discard.
  • Within the linear economy, sustainable development does not matter, only programmed obsolescence and continue selling more every year.
  • The flow of the circular economy is based on practices that conserve the environment, control the extraction of resources and reduce the emission of pollutants.
  • The linear economy depends on the use of fossil fuels and their derivatives, depleting a limited resource. Instead, the circular economy seeks to take advantage of renewable energy.
  • The closed cycle model invites the implementation of the 7 Rs, which favors efficient consumption and preserves the value of things for longer.

What are the 7 Rs of the circular economy?

  1. Rethink
  2. Redesign
  3. Re-use
  4. Repair
  5. Remanufacture
  6. Recycle
  7. Recover

Circular Economy

The momentum of the circular economy has great adherents and represents one of the guidelines of the 2020 strategy of the European Union for sustainable, inclusive and efficient development. In light of the fact that each EC citizen consumes 16 tons of food and produces 6 tons of waste, this reality has led to several important initiatives, such as the SDGs and the Paris agreement.

In Spain, like the rest of the world, the adoption of the circular economy has had a slow start and there is much to progress. It was from 2018 when the country began to implement this kind of sustainable strategies by launching the draft of the Spanish Circular Economy Strategy for 2030.

According to the study “Close the circle”, this country shows a bio-capacity and an ecological footprint that forecasts a territorial expansion 2.4 times greater than the current one. It has also become clear that Spain is behind with respect to its recycling policies and innovations, barely processing 24.32% of the waste, 12 points less than the European average of 36%.

On the other hand, within its long-term strategic program it is implementing other short-term initiatives, such as the 2018-2020 plan, which promotes 70 performances. This project considers the reuse of Mediterranean water to be a priority and incorporates 5 basic sectors: Agrifood, consumer goods, construction, industry and tourism.

Examples of circular economy

For several years, some of the most important companies on the planet have joined the circular economy movement. After the publication made by the Ellen MacArthur Foundation, various organizations are dedicated to studying this phenomenon, highlighting its possibilities, analyzing the different scenarios and making recommendations.

Among the most outstanding circular economy companies, we must mention:

  • Ikea. This Swedish multinational has made it very clear that it manufactures its initial prototypes so that its products can be reused, repaired or re-manufactured. They have put their effort into optimizing the supply chain to offer solutions with recycled materials and longer life. They work hand in hand with partners, shareholders and customers to achieve innovative designs that meet sustainable environmental and energy criteria.
  • Neolectra. It is a Spanish company with offices in Barcelona, ​​León and Madrid. It is focused on the generation of Eco-friendly energy through co-generation, biomass and bio-gas projects. Through innovative and advanced solutions, they seek cost optimization, industrial energy saving, fossil fuel consumption reduction and external energy independence.
  • Tecnalia. Referred by Cotec, it is a Spanish company that was born in 2010 as a result of the merger of 8 technology centers. It ventures into sectors such as sustainable construction, health, energy, environment, industry, transportation, software and more. His main work focuses on circular economy projects of reuse, renewable energy, valuation of by-products, among others.