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What challenges face the Circular Economy?

Colette Fox
Apr 16, 2014

‘Circular economy’ is fast becoming a popular term when discussing recycling and reuse of goods, and is often associated with the Ellen MacArthur Foundation which is one of its biggest proponents. A number of industries and businesses have long been operating in a circular method, such as Caterpillar who has been remanufacturing engines since the 1970s. However, despite the popularity of this idea and the fact that it has been happening in some industries for many years, it seems difficult to drive forward.

The main challenges to remanufacturing are related to how well product design allows for remanufacture; supply chain communication providing education on and encouraging remanufacture; regulatory framework actively enforcing it; and type of product. This last point also extends to another main feature of the circular economy – reuse. Remanufacturing and often reuse are not always suitable for fast moving consumer goods, where trends and technology move very quickly, or the product is of such low value that consumers will just replace it with a new product. In these instances recycling is potentially more appropriate.

At the March 2014 Resource event, senior figures in the waste management and resources industry discussed the barriers to a circular economy, which focused on more businesses and more consumers playing an active role, identifying that a circular economy is not possible when only a small number of businesses, organisations or consumers buy into it. Government support and use of regulation would also create a very strong driver for businesses.

At the current time, the Waste Electrical and Electronic Equipment industry appears to be the main area of producer responsibility which is focusing on circular economy, with research projects being undertaken on the benefits and impacts of reuse. It will be interesting to see how that progresses and whether the results of that research can be used to promote circular economy through other producer responsibility regimes.

There is a long way to go with the circular economy and it seems likely that it will be incredibly challenging until the factors above are addressed, and all stages of the supply chain play their role.

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