A new perspective on circular economy for development of effective technologies, business models and policy

RRfW is offering a fresh perspective on how we conceive of the circular economy, with a new diagram that embeds the circular economy within the natural environment.

The new diagram (Figure 1) integrates the resource flow of both organic and inorganic materials, and extends previous circular economy thinking to include the extractive industries and return of materials to natural processes. This gives a new conceptual space in which to think about development of effective zero-waste technologies, business models and policies.

Global resource use has been accelerating while at the same time we are producing more waste than ever before, with disastrous consequences for the environment and people. The circular economy has been proposed as a solution to the current ‘take, make and dispose’ economy, by designing waste out and preserving and recirculating resources within the economy.

Current views on circular economy are strongly shaped by the Ellen MacArthur Foundation’s butterfly diagram, which separates ‘biological’ and ‘technical’ material flows. Finite ‘technical’ (inorganic) materials are held in a closed loop system through reuse, remanufacturing and recycling. Renewable biological (organic) materials form an open loop system, moving through extraction, use and energy recovery, before returning nutrients to the biosphere to feed the next cycle of primary produce.

However, we believe there are a number of issues with this view. A fully closed loop economy is unlikely due to unavoidable losses in material quality and the energy requirements of resource recovery processes. In addition, the extractive sectors and initial processing of materials are largely excluded from the butterfly diagram, despite being the largest waste producers and energy-consumers in the production-consumption system, responsible for half of global carbon emissions. Finally, it treats organic and inorganic materials separately whereas, in our view, resource flows often contain tightly bound combinations of these materials.

To address these issues, we propose a new integrated resource diagram for the circular economy (Figure 1 below). Firstly, we have embedded the production-consumption system into the wider natural biophysical environment. The diagram envisages a flow of natural and industrial materials (see definitions), which can include organic or inorganic materials or, more likely, a mix of both. The waste hierarchy informs the importance of steps within the production-consumption system. The design step [1] is crucial in order to design avoidable wastes out of the economy. This is followed by promoting shared consumption [2], reuse and repair [3], remanufacturing [4] and recycling [5].
Products or materials that cannot be recycled at end-of-use should ideally be eliminated in the future by redesigning, but while they do persist then energy recovery or storage in a controlled environment should be considered. Stored materials should be subjected to resource recovery solutions with the aim of safely returning all residues either to the production-consumption system or the natural environment to reintegrate into natural capital reserves. Uncontrolled leakage of materials into the environment in the form of pollution is acknowledged and the aim should be to manage this holistically and stop it where possible.

Figure 1: Integrated resource flow diagram for the circular economy (Legend: Thick arrows are natural materials, Thin arrows are industrial materials, Dotted arrow is immaterial; [1] Prevention by designing out all avoidable wastes, [2] Shared consumption, [3] Reuse and repair, [4] Remanufacturing, [5] Recycling).
This integrated perspective on materials in the circular economy creates a new space for us to envisage the technologies, business models and policies that will drive us toward a sustainable circular economy. For instance, the multi-component nature of waste materials (organic/inorganic) described highlights the need for resource recovery systems that can deal with these mixed streams. Ideally these would target multiple components, have low/efficient energy usage, and aim for zero waste residue: RRfW has been pioneering such radical approaches across the programme, please see our end-of-programme brochure for an overview of this work and keep an eye out for our forthcoming book.

The perspective presented here offers a realistic outlook on the biophysical limitations of circularity and endeavours to inspire discussion that supports the transition towards a sustainable circular economy. If you would like to join that conversation, please do get in touch.

The full paper on which this article is based can be found here: Velenturf et al. (in press) Circular economy and the matter of integrated resources. Science of the Total Environment. Doi: 10.1016/j.scitotenv.2019.06.449


Natural materials reside in the wider biophysical environment, they may be natural or engineered and take part in naturally occurring geological, chemical and biological processes without causing environmental harm.

Industrial materials are transformed in the production-consumption systems and ideally would be made in a way that at the end of their life they can be reintegrated into the biophysical environment without causing environmental harm.