Circular Economy: Measuring innovation in product chains

Strategies for a circular economy

In a circular economy, materials ideally retain their original quality. This enables us to recycle these recovered materials into the same type of products. Natural resources are then no longer needed for the production of materials, and discarding products doesn’t lead any longer to emissions and waste.

Several circularity strategies exist to prevent resource extraction and primary material demand as well as waste production. There is also a priority order in those circularity strategies. As a rule of thumb, more circularity means more environmental gain.

Role of innovation in the transition towards circular product chains

PBL has evaluated the role of circularity strategies and the role of innovation in a large number of cases that focus on CE transitions in specific product chains. Technological innovation turns out to be more important for lower circularity strategies as recycling of materials and waste streams. Innovation in product design and revenue  model become more important with higher circularity strategies that may also in the whole product chain involve changes in ‘written and unwritten’ rules, habits and opinions. For example when consumers (have to) share products (like a washing machine; uncommon in the Netherlands), or when products remain the property of the manufacturing industry and consumers only pay for the service (for example for light).

Measuring progress towards a circular economy

Monitoring progress towards a circular economy should address both the transition process as well as its effects. The transition process involves things as: is sufficient knowledge available to develop CE-solutions? Do entrepreneurs experiment enough with CE-solutions and revenue models? The effects involve consequences for circularity and environment, with energy and material requirement as possible indicators, and added value as an example of an indicator to measure progress for economy.

In a linear economy, natural resources are extracted for producing materials that are manufactured in products to be incinerated or landfilled after use. The essence of a circular economy is to preserve natural resources by retaining the quality and value of products and their parts, and the materials.