Circular Economy
The transition to renewable energies could prevent up to 55% of CO2 emissions, but what about the remaining 45%? It is associated with the use of land and the production of consumer goods, and the way to combat it involves using circular economy models.
Circular economy: Definition
Just think for a moment about how consumption was generally undertaken in Western countries during the twentieth century: A product was bought, used and thrown away. This applied to both individual behaviour and that of large and small companies, and occurred both in the consumption of goods and in their production. This dynamic was one of the many factors that brought about the climate crisis in which we find ourselves and, one of the solutions is to commit to circular economy models.
The circular economy, compared to the linear consumption we mentioned above, is committed to extending the useful life of products and raw materials as much as possible. Through a series of essential principles, circular economy models promote the optimisation of resources and the use of waste, either by recycling or re-using it, to reduce the consumption of raw materials and, in the long run, CO2 emissions.
This economic model is based on a combination of the return to traditional forms of consumption, where a product was never thrown away without exhausting its possibilities, with the most innovative options offered by technological innovation, such as recycling and ecodesign. Ecodesign adds environmental criteria to those that were traditionally part of the design process, such as cost, safety and utility. It is based on creating products that are easy to repair, with modular spare parts that can be replaced and with optimum recycling, to minimise environmental impact. It is undoubtedly one of the essential pillars in the transition to circular economic models.
“The circular economy is the trend to follow to fight climate change and reach the goal of having a completely decarbonised economy by 2050”.
Linear economy vs. circular economy.
Linear economy
Raw materials ➡ Manufacturing ➡ Consumption ➡ Waste
Circular economy
Raw materials ➡ Manufacturing ➡ Consumption ➡ Recycling
The 7Rs in the circular economy
At the G8 Summit in June 2004, the then Prime Minister of Japan, Koizumi Junichiro, presented the 3Rs for the ecology initiative: Reduce, Re-use and Recycle. These were the basis in the following years for the development of the 7Rs for circular economy, and these are the following:
- Reduce: Reducing consumption is the first step towards environmental sustainability.
- Redesign: The logical continuation of the previous point is the redesign of products so that they have a better place in circular economy models, by increasing their useful life, expanding their functionalities, etc.
- Re-use: Raw materials, products, tools, etc. No more using them and throwing them away.
- Repair: In line with re-use is repair. For a circular model to work, before throwing something away because it is broken, we should do all we can to fix it.
- Renew: As well as repairing a product, you can extend its useful life by renewing it to avoid throwing it away prematurely.
- Recycle: Despite all the above points, the possibilities for products and raw materials are sometimes exhausted, then it is time to recycle.
- Retrieve: Using used or recycled materials and reintroducing them into the production chain is the finishing touch to close the cycle of the circular economy.
Benefits of the circular economy and its relationship with sustainability
All the principles of the circular economy point in a clear direction: To achieve completely decarbonised production and consumption models and fight climate change. This economic model is undoubtedly the trend to follow to meet the objectives for 2050, as it plays an essential role in developing new business models that disassociate production from natural resources, thus completing the decarbonisation process.
“Only by developing new business models where growth is disassociated from material consumption can sustainability be achieved”.
In the end, the circular economy is an economic model that offers enormous opportunities for economic development, while disassociating the consumption of resources and materials from economic growth in all types of companies. It promises great benefits, both to society and to companies, essentially the following:
- It saves on costs, raw materials and resources
- It promotes environmental sustainability
- Offers greater competitiveness, efficiency and productivity
Sabina Scarpellini, Professor of the Department of Accounting and Finance at the University of Zaragoza, tells us about the economic benefits that the circular economy has for companies.
The main challenges of the circular economy
The theory is clear to everyone, when put into practice complications and difficulties may arise that could delay or disrupt circular economy models. It is crucial for companies to see the need for developing new business models where growth is disassociated from material consumption, and that is what circular economy is.
One of the most difficult starting points for circular models is to have a different outlook on both the production processes and the possibilities for a product. Abandoning traditional lines of thought to find creative alternatives is undoubtedly the first step on the road to a circular economy, and the most complex. Only with the leadership of companies and start-ups that are committed to innovation can circular economy models be implemented.
Circular economy in the European Union
According to a report by the European Union, in 2016 a total of 2,500 million tons of waste were produced among all member countries. Of this figure, only 8.50% came from households, the majority (36.40%) originated in the construction sector and 25.30% in mines and quarries.
Given these data, which show a need for measures to be taken in all areas of society, not only by users, the European Union has been looking for solutions for years. The most recent efforts seek to achieve climate neutrality by 2050. One of the clearest examples of these measures based on the circular economy is the right to repair. The proposed legislation provides an incentive for users to choose to repair products instead of replacing them. It also requires manufacturers to provide information and options for properly maintaining and repairing products, as well as ensuring computer upgrades for a minimum length of time.
Circular economy in Spain
In Spain, numerous efforts are also being made by the government to achieve circular economy models, encompassed in the so-called Spanish Circular Economy Strategy. This document is in line with European precepts and establishes a series of objectives to be reached by 2030, taking 2010 as a reference. The most significant are the following:
- Reducing national consumption of materials by 30% with regard to GDP.
- Reducing waste generated by 15%.
- Reducing the waste of food in households and retail consumption by 50% and by 20% in production and supply chains.
- Increasing the re-use of municipal waste generated by 10%.
Examples of circular economy in the energy field in Spain
There are many ways to implement circular models in economic production. To do this efficiently and definitively, you need to work on the entire value chain, from design, supply, construction, operation and maintenance and, finally, dismantling.
So in the case of the energy field, it is not only about generating sustainable energy that uses renewable sources and being integrated into the local community. Even though this minimises the environmental impact and reduces costs, all the other levels still need to be addressed.
The ultimate goal should be to seek sustainable and circular energy. That is, when manufacturing the equipment required by energy transition, you should not only take into account its construction and assembly, but also other circular economy criteria like ecodesign and the use of recycled materials. This is especially important given that in many cases these materials are scarce or even critical for a number of reasons (highly polluting extraction, risk of child exploitation, dependence on countries with non-democratic regimes and price volatility).
Here are a few examples of successful circular models:
- Melilla second life: At Endesa's plant in Melilla, a storage system has been developed to re-use used batteries from electric cars. This initiative is a pioneering project in Europe and uses batteries as energy sources for the entire plant. It has a capacity of 4MW and can produce up to 1.7MWh. A great example of circular economy: Re-use of raw materials to meet local needs as a result of the energy peculiarities of Melilla due to its geographical location.
- Wind turbine blade recycling: This project is being developed in León and will be the first of its kind in the Iberian Peninsula. The objective is to respond to the challenge of recycling the more than 6,000 tons of fibreglass and carbon from wind turbines each year to make it possible to re-use these materials.
Watch our videos by experts to learn more about circular economy.
