Circular Economy

The circular economy is a production and consumption model involving sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products as long as possible.

Annually, more than 2.5 billion tonnes of waste are produced in the European Union. This number introduces the need to urgently promote a more sustainable model as the circular economy, directly connected to the legislation on waste management, where ERP plays an important role.

The circular economy model is different from the linear economy model, which was based on a take-make-consume-throw-away pattern, where excessive and unnecessary consumption was seen as the right behaviour.

The circular economy focuses on sharing, repairing, refurbishing, and recycling instead. The result being that the life cycle of products is extended and the waste is reduced to a minimum, as its materials are kept within the economy wherever possible by reusing them to create further value.

The circular economy model is a resilient system that is good for business, people and the environment. It integrates every stage of a product’s life cycle, from the moment it is designed until it becomes waste and how the recycling materials can be introduced in the manufacturing process.

Areas where the circular economy can be applied and developed are: biodiversity, city organization and management, climate, fashion, green energy, finance, food, waste and resources management.

The world’s population is growing, increasing the demand for raw materials that are finite and limited.

This scenario leads to the fact that some EU countries are dependent on other countries for their raw materials. Consequently, the extracting and using of raw materials has a major impact on the environment as well as increasing energy consumption and CO2 emissions.

The European Commission presented the circular economy action plan in March 2020, to promote more sustainable product design, reduce waste and empower consumers (for example by creating a right to repair). The focus is on resource-intensive sectors, such as electronics and ICT, plastics, textiles, and construction.

One year later, the Parliament adopted a resolution on the new circular economy action plan demanding additional measures to achieve a carbon-neutral, environmentally sustainable, toxic-free and fully circular economy by 2050, including tighter recycling rules and binding targets for materials use and consumption by 2030.

The first package of measures was released in 2022 to speed up the transition towards a circular economy, as part of the circular economy action plan. The proposals include stimulating sustainable products, empowering consumers for the green transition, reviewing construction product regulations, and creating a strategy for sustainable textiles.