The Circular Economy focuses on large-scale recovery and reuse of materials. By collecting products at the end of the life-cycle, and separating the materials, we can use them again. The circular economy requires 4 things:
- innovative designs
- innovative production technologies
- new organizational forms (such as: reverse logistics and new business models)
- Cooperation in the supply chain
In addition, need fulfillment and services become more important than product ownership.
Circular Business Models & Circular Design
The potential for additional value within a circular business model is enormous. As a result, more and more business leaders recognize this. As part of the Europe 2020 Strategy, the European Commission has chosen to move towards a resource efficient and circular economic system.
The transition from ownership to performance-based payment models offers attractive value propositions. Circular business models allow industries to develop completely new products and services that reduce Total Cost of Ownership (TCO) and improve customer loyalty. A performance-based payment model makes it possible to maintain and recover the value of products, components and materials at the highest possible level. This will not only benefit the economy, but also social wellbeing and the environment.
An interesting example of how Life Cycle Assessment results need to be treated very carefully, is the comparison of the life cycles of paper (or board) products produced from virgin and recycled fibres. Read the whole article