The circular economy
The circular economy is an economic system that tries to optimize resource use by reusing, repairing and recycling products and materials, rather than discarded. This is different from the current mainly linear economy, in which resources are extracted, transformed into products, and then discarded as waste after their use, leading to significant environmental problems (Ellen MacArthur Foundation 2024). The principles of the circular economy:
- Minimise waste: Products and services are designed to minimise waste and harmful environmental impacts. This is done by using fewer resources, selecting sustainable materials, and designing products that can be easily disassembled, repaired, and recycled
- Keep materials in use: Repair, reuse, remanufacturing, and recycling extend the life of products and materials. Products should be designed making it easy to replace or upgrade parts or components, making it easy to repair instead of disposing of products
- Regenerate natural systems: The circular economy returns biological materials to natural systems, such as through composting, and by adopting sustainable agricultural practices that enrich the soil and protect biodiversity.
The circular economy can reduce waste and pollution, including carbon emissions (Ghisellini et al., 2016). The circular economy gives business opportunities in areas such as repair, recycling, remanufacturing, and product-as-services (Bocken et al., 2016), and can reduce reliance on specific resources and countries (where raw materials are extracted) (Stahel, 2016). Companies and consumers can, and do, adopt circular economy principles, but the circular economy is still a small part of the total. Challenges are lacking incentives for businesses and consumers to adapt circularity, currently it is more profitable and easier to follow the linear model. To change this, governments must probably introduce measures such as extended producer responsibility, taxes on resource use and waste, or tax benefits for companies that adopt circular approaches (Ghisellini et al., 2016).
The circular economy at H&M
Fast fashion, and H&M, have been criticized by NGOs and consumer organizations for creating (large amounts) of unnecessary waste, in a linear produce – use -throw away logic. Partly as a result, H&M is implementing a range of circular activities. This includes planning supply and demand better, implementing circular design (e.g. better quality/clothes that can be used more), sourcing only sustainable or recycled sources, working with innovative production processes to reduce resource use, implementing initiatives to prolong the life of products (including systems for buying and selling second-hand items), and different collaborations with other companies and startups in the circular ecosystem. (Source: H&M Sustainability disclosure 2023)
The circular programme at H&M has some successes, for instance, 85% of materials used in clothes are now either sustainably sourced or recycled, and H&M have engaged successfully in online and offline platforms and markets for second hand clothes. On the other hand, only 25% of materials is recycled (11% of cotton), and the goal for 2030 is only 30%, meaning that H&M still will introduce large amounts of new materials into the economy. H&M is also relatively silent about the disposal of clothes. They collect used clothes in the stores for resale or recycling, but this is only a very small percentage of the clothes that they bring into the market. At the minimum, they should measure and be open about the life duration of clothes and the amount that are burned or going to landfill.
Industrial Ecology
Industrial Ecology seeks to model industrial systems after natural ecosystems, aiming to reduce environmental impacts. Just as in natural ecosystems where waste from one organism becomes a resource for another, industrial ecology advocates for industrial systems to function in a closed-loop manner, where the waste generated by one process is used as input for another. This relates closely to the circular economy, emphasizing that resources should remain in use for as long as possible, minimizing waste and resource extraction (Ehrenfeld & Gertler, 1997). Important concepts in industrial ecology are:
- Life Cycle Assessments (LCA) evaluate the environmental impacts of a product or system across its entire life cycle—from raw material extraction to disposal. By analysing the entire life cycle, LCA helps identify the stages where environmental impacts are highest and can be improved (Guinée et al., 2011).
- Material and energy flow analysis tracks the movement of materials and energy through industrial systems. This helps identify opportunities for reducing waste or reusing resources (Brunner & Rechberger, 2004)
- Industrial symbiosis is the collaboration between firms or industries to use each other’s waste products or by-products as raw materials, creating a network of resource exchanges. The Kalundborg Symbiosis in Denmark is a famous example, where multiple industries share resources such as water, energy, and materials, reducing waste and lowering production costs (Neves et al 2020).
- Design for environment focuses on integrating environmental considerations into product design. This includes designing products that last and that are easier to disassemble, repair, or recycle, improving resource efficiency and reducing waste.
The industrial district of Kalundborg, Denmark
Kalundborg, Denmark, is often used as an example of industrial symbiosis and a pioneering project in industrial ecology. The Kalundborg Eco-industrial park began organically in the 1970s and grew into a network of firms and exchanges that reduced waste and environmental impact (Ehrenfeld & Gertler 1997).
Asnæs Power Station, a coal-fired power plant, supplied surplus steam to the nearby Novo Nordisk pharmaceutical plant and the Kalundborg Municipality for district heating. The power plant also provides fly ash, a by-product of coal burning, to the Gyproc plasterboard company, to be used in plasterboard production. The Statoil Refinery supplied surplus gas, which would otherwise be flared off as waste, to the power station as fuel. The power station used treated wastewater from Novo Nordisk and the oil refinery in its cooling processes.
The coal plant in Kalundborg was closed in 2019 to reduce climate emissions and was replaced with a wood chip-fired combined heat and power plant.
References
Bocken, N. M. P., de Pauw, I., Bakker, C., & van der Grinten, B. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), 308-320.
Ehrenfeld, J., & Gertler, N. (1997). Industrial ecology in practice: The evolution of interdependence at Kalundborg. Journal of Industrial Ecology, 1(1), 67-79. https://doi.org/10.1162/jiec.1997.1.1.67.
Ellen MacArthur Foundation. 2024. https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview.
Ghisellini, P., Cialani, C., & Ulgiati, S. (2016). A review on circular economy: The expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 114, 11-32. https://doi.org/10.1016/j.jclepro.2015.09.007.
Guinée, J. B., Heijungs, R., Huppes, G., Zamagni, A., Masoni, P., Buonamici, R., Ekvall, T., & Rydberg, T. (2011). “Life cycle assessment: Past, present, and future.” Environmental Science & Technology, 45(1), 90-96. https://doi.org/10.1021/es101316v.
Stahel, W. R. (2016). The circular economy. Nature, 531(7595), 435-438. https://doi.org/10.1038/531435a