Trend of the Day: Circular Economy

Circular Economy

= The circular economy is a generic term for an industrial economy that is, by design or intention, restorative and in which materials flows are of two types, biological nutrients, designed to reenter the biosphere safely, and technical nutrients, which are designed to circulate at high quality without entering the biosphere.

Circular economyDefinition

“A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.” (

The Success of the Circular Economy in Japan

1. Dustin Benton:

“As Jonny Hazell outlined in a previous post, the Japanese have changed their linear manufacturing and consumption system into a more circular, collaborative system that is highly effective. Business collaboration may feel alien to the UK, but it would be a mistake to think that the Japanese system works just because the Japanese are enlightened, lovely people (though this helps).

Japan’s system is built on the assumption of collaboration, but the system incentivises everyone to do the right thing:

Consumers pay fees up front to dispose of electronics, and can recycle old electronics via home pickup or a drop off service at any post office or electronics retailer. Penalties for fly tipping are stiff, making participation in the recovery system the easiest thing to do.

Manufacturers co-own the recovery infrastructure. They know about the components inside the products coming back to them. Because they keep the proceeds of better recovery, it’s in their interest to design products for reuse and better recovery.

This model, neatly summarised as ‘honesty, with incentives’ in a fascinating analysis, shows effective Japanese systems in a less culturally essentialist light: honesty and lack of looting following the Fukushima earthquake was the result of consistent and strong rewards for honesty and strict punishments for the dishonest, not just Japanese character. The same factors apply to the Japanese appliance recycling and reuse system.” (
2. Jonny Hazell:

“Japanese recycling rates are extraordinary: 98 per cent for metals for example and, in 2007, just five per cent of Japan’s waste ended up in a hole in the ground, compared with 48 per cent for the UK in 2008. Japan’s appliance recycling laws ensure the great majority of electrical and electronic products are recycled, compared with 30-40 per cent here. Of these appliances, 74-89 per cent of the materials they contain are recovered. Perhaps more significantly, many of these materials go back into the manufacture of the same type of products from which they were reclaimed . This is the ‘closed-loop’ holy grail of recycling essential for a truly circular economy.

So how has Japan managed it and can we do it too?

Collaboration is at the heart of the Japanese system. The public plays a part by separating out recyclables, paying recycling fees directly and holding companies to account when necessary. Manufacturers do their bit by using more recycled materials, and making longer lasting products that are easier to repair and recycle. The system has two key features:

Consumer-friendly collection: The system for collecting old appliances for recycling is so comprehensive and easy to use it’s harder not to recycle them. Old appliances are collected by retailers either in store or when delivering a new appliance. For old IT equipment, you can request that the original manufacturer collect it from your doorstep, or you can take it to any Post Office and have it sent back to them. This is standard across Japan, making it well understood and widely used.

Recycling infrastructure is co-owned: The law requires consortia of manufacturers to run disassembly plants, ensuring they directly benefit from recovering materials and parts. Because recovery is a legal requirement, companies invest for the long term in recycling infrastructure. And because they own both manufacturing and recovery facilities, companies send product designers to disassembly factories to experience the frustrations of taking apart a poorly designed product. Some companies even put prototypes through the disassembly process to make sure they’re easy to recover.

This system doesn’t just work well, it’s also big business: Japan’s reuse and recycling economy was worth £163 billion in 2007 (7.6% of GDP) and employed 650,000 people.” (



Closed nature of cradle to cradle certification process holds back progress in the Netherlands

“I was interested to find out whether experts working on the circular economy in the Netherlands also shared Braungart’s confidence. Krispijn Beek, who worked at the Ministry of Economic Affairs, Innovation and Agriculture on sustainable business policy, said “Cradle to Cradle was a big hit in the Netherlands, including government.” Apparently, the trend really took off after a 2006 television documentary, Afval = Voedsel (Waste = Food).

However, at a later point the idea stalled – at least in government. Beek claims that “one of the showstoppers was the commercial certification process, which made it impossible to use Cradle to Cradle in public procurement.”
Michel Schuurman, a director at MVO Nederland, agrees that “the concept gained a lot of attention some years ago but has faded a bit in recent times.” He believes the reason, at least partially, is that “businesses are in the process of experimenting with it and are not yet ready to communicate publically.” Another reason is what he calls “the closed system of Cradle to Cradle” – “its monopoly, lack of transparency and (expensive) certification has been a reason for some to follow the principles but not the scheme.”

Beek expresses a similar frustration. “The Dutch government had a chance to get Cradle to Cradle thinking into the Reach regulatory framework [but] this momentum was lost because the owners of Cradle to Cradle stayed vague about their objectives against Reach and which changes would be required [to] fit into the Cradle to Cradle framework.”

The private sector has seen more progress. In fact, Beek believes that a critical factor for its success here is that design of the circular economy uses a business perspective, while similar earlier concepts were too driven by non-profits or government policy. Beek is now CSR manager at Strukton, one of the top 10 construction companies in the Netherlands. “We are working on a process called ‘concrete-to-concrete aggregates’ (C2CA)”, he says. “With international partners (universities and companies), we are recycling not only concrete but also concrete aggregates.”

This is only one of many circular economy initiatives and leading corporate examples in the Netherlands. Others I came across in my research include Aveda, Auping, Philips and Interface FLOR. Some local municipalities and regions have also taken a lead, such as Venlo, which hosts a Cradle to Cradle expo lab and Paviljon at the annual Floriade flower exhibition.

As far as spreading these best practices goes, Schuurman observes that, so far, the circular economy has been “driven by visionary and bold leaders” and “the increasing need and desire to have closer relationships along the value chain.” Van Dalen stresses that scaling up the circular economy requires it to be translated into concrete measures and clearly demonstrated as a way to meet multi-stakeholder sustainability targets. Besides these drivers, it is also important to stimulate public debate. According to Beek, this includes ideas like upcycling, the process of converting waste materials or useless products into new materials or products of better quality or for better environmental value, and service lease concepts like Turn Too, Rendemint, or Philips, where you can now lease lumen (units of luminous flux) for your office instead of buying LED lights.” (


More Information

  1. More via
  2. video introduction via
  3. Green Alliance Circular Economy Task Force

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