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Linear vs Circular Economy revealed

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Embracing the circular economy isn’t just a trend; it’s a necessity for the future of our planet.

As the circular economy gains momentum, it’s becoming essential for corporations, especially manufacturing ones, to take notice and evolve.

The concept of circularity is not new, but in recent years, it has received much attention worldwide, inspiring environmentalists, governments, and businesses alike. To better understand the circular economy and how to transition to this sustainable economic model, it’s essential to recognise what makes it different from the current industrial linear model.

This article reviews key definitions and provides a clear comparison between the linear and circular economic models and will discuss the key drivers to make the transition.

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What is the linear economy?

The linear economy operates under a conventional business model where products are purchased, used, and ultimately thrown away. It follows a “take-make-waste” pattern without consideration for recycling or reuse.

Resources are taken from their source and manufactured into consumable products. The residuals of this consumption later accumulate in landfills or are incinerated. 

The process in which the linear economy deals with raw materials puts pressure on scarce resources and has little concern for environmental and social impact. Businesses maximise production and consumption for profit, leaving many economic and growth opportunities untapped.

In a world with finite resources, infinite growth is unsustainable. Unchecked consumption could soon lead to reduced food production, population decline, and industry collapse.

What is the circular economy in simple terms?

The circular economy is a system where products and materials are reused, repaired, and recycled to reduce waste and lessen the impact on the environment and society.

The circular business model focuses on extending the life cycle of products while maintaining or improving their value. Resources are utilised efficiently, focusing on sharing, leasing, and repairing products rather than throwing them away after a single use. 

The core principles of circular economy are the 4R imperatives: reduce, reuse, recycle, and recover. Producing more durable products that are easier to repair and recycle opens up new business opportunities and fosters innovation.

The circular economy brings together environmental, economic, and social factors to build a more sustainable world. By rethinking our consumption patterns and embracing circular practices, progress can be made towards a future where waste is minimised and resources are preserved.

For those interested in learning more about the circular economy in simple terms, this video by the Ellen MacArthur Foundation breaks down the basics:

What are the key differences between the linear and circular economies?

The main differences between the linear and circular economies are their general approach, vision of value creation or maintenance, perspective when working on sustainability, and adopted business model.

1. Approach

The fundamental difference between these two economic models is that while the linear economy follows the “take-make-waste” step approach, the circular economy follows the 4Rs approach of “reduce, reuse, recycle, and recover”, completely removing waste from the equation.

2. Vision

The circular and the linear systems differ regarding how value is created or maintained. Traditional linear models have short-term revenue in mind and only focus on profitability, creating value through mass production and sales. 

The circular approach, on the other hand, has a long-term vision that also considers sustainability throughout a product’s life cycle. Product updates, repair, and regeneration can achieve longer life cycles.

3. Sustainability perspective 

When considering sustainability, the linear economy works towards eco-efficiency, trying to achieve the same result while reducing the environmental impact generated. This doesn’t enable circularity, and it only delays the linear flow of resources from production to waste by reprocessing materials into a product with less value (downcycling).

Alternatively, the circular economy attempts to increase the eco-effectiveness of products. The environmental damage here is eliminated and even a positive impact is possible. It abolishes the idea of waste and converts materials into something of greater value than they originally had (upcycling).

4. Business model

The current linear economic model focuses on products that are produced, used, and then thrown away as waste.

The circular model focuses on services by offering a single service that many can use instead of the same product replicated for multiple individuals. 

Linear Economy VS Circular Economy

Understanding the fundamental disparities between linear and circular economies doesn’t have to be complicated. Here’s a clear overview to help delineate the key differences between these two economic models:

Aspect Linear EconomyCircular Economy
1. ApproachTake-make-wasteReduce, reuse, recycle, and recover
2. Vision Short-term profitabilityLong-term sustainability
3. Sustainability perspectiveMinimising environmental impactMaximising environmental benefits and resource value
4. Business ModelProduct-centric approach Service-oriented approach 

Transitioning from a linear to a circular economy

Given the planet’s limited resources, the environmental impacts of the traditional linear economy business model are concerning. Governments, companies, and consumers each have a crucial role when transitioning from a linear to a circular model of production and consumption.

The shift to circularity goes beyond recycling and reusing materials. It requires a meticulous evaluation of the impact products and their components have in every step of their lifecycle. It needs actions and policies in place to succeed. 

There are many ways to incorporate circular practices in business. Collaboration between businesses and stakeholders across the value chain and a consumer mindset change is essential.

The United Nations Environment Programme (UNEP) explores some key drivers that businesses may consider when transitioning to more circular business models:

1. Entering new markets

The demand for green products and services is growing and the markets for low-emissions offerings are expected to expand further. The transition from a linear economy to a circular model allows companies to enter these new markets and increase their market share.

Companies can also maximise the value of their products by keeping them in the circular loop, extending their lifecycles through reuse, refurbishment, or remanufacturing. The increasing demand for net-zero products is creating unprecedented opportunities for businesses and countries to implement a circular model.

2. Attracting and retaining talent

Purpose-driven companies have higher productivity and growth rates, along with more satisfied workforces with lower employee turnover. A strong commitment to a circular model helps companies attract and retain the best talent. This is especially true among the younger generation that has strong environmental concerns and is eager to get involved and be an active part of the solution.

3. Reducing risk and future-proofing the business

The circular economy seeks to create industrial systems that are restorative or regenerative by intention and design. Shifting from a linear economy to a circular one minimises the use of virgin materials and allows companies to incorporate alternative materials taken from existing products. This can reduce companies’ dependence on suppliers and lessen their corporate risks.

Using more sustainable materials — such as refurbished, renewable, or recycled materials — can improve the supply chain’s resilience and help businesses manage future demand for circular products and meet their customers’ needs. 

4. Triggering innovation

When shifting towards a circular economy, companies will need to reevaluate the way they think about products, technologies, processes, and business models. Innovation is a key driver in this transition away from the wasteful linear economy system.

Circularity serves as a “rethinking device”, triggering creative new solutions and boosting innovation rates so that businesses can satisfy key societal and market needs.

5. Reverse logistics

Reverse logistics manages the return of goods and services from consumers to consolidation points, aiming to close gaps in the circular economy by reusing or recycling resources. It’s about making the most of post-consumer materials. Considering reverse logistics during product design can streamline operations and prevent unforeseen costs.

6. Product design

As stated by our CEO, Krzysztof Wróblewski, in an article from Automotive World, product design is crucial in increasing circularity. He emphasised that rethinking the design of everyday items, like tires, can significantly reduce waste.

“Manufacturers can aim to streamline recycling by integrating it into tire designs to increase the use of circular, sustainable raw materials in the automotive industry.”

Krzysztof Wróblewski, CEO at Contec S.A.

Selecting materials that can be easily reused or recycled minimises the need for new resources, while standardised components simplify repair and recycling. Designing durable products advances the transition to the circular economy by reducing replacements, conserving resources, and planning for end-of-life scenarios to ensure efficient material reintegration.

Bringing circularity to the tire industry

At Contec, we believe that the circular economy is pivotal for the tire industry to transition to a more sustainable future. Our mission is to be a driving force, helping to transform the industry towards carbon neutrality.

Currently, we’re contributing to circular principles in two major areas:

  1. Circular product creation — Our circular products replace petroleum-derived products with high-quality, low-carbon solutions.
  2. Contec process — We’re continuously optimising our pyrolysis process to be more sustainable and resourceful. Our Szczecin plant runs on 100% renewable energy, generated from our pyrolysis process.

Overall, it’s our vision to close the loop in tire production by enabling a tire-to-tire model and supporting manufacturers with circular solutions in the plastics industry. Get in touch to learn more about our sustainable solutions.

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