What is the Circular Economy?
Published July 2025 © DATA4CIRC
You’ve probably heard of the circular economy. Circularity is part of our project name: DATA4CIRC. What what do all these phrases actually all mean?
The concept of Circular Economics
In a world grappling with climate change, resource scarcity, and mounting waste, the circular economy offers an alternative to the traditional, linear “take-make-dispose” model. The concept of circularity draws inspiration from natural ecosystems: most school children are familiar with the water cycle. It starts in the sea, evaporates to form clouds, rains on the land, runs into rivers, and returns to the sea… The circular economy views the materials contained in products we use like water in the cycle. Rather than extracting raw materials, using them briefly, and throwing them away, the circular economy is about keeping materials in use for as long as possible, extracting maximum value, before safely returning them to nature or to industry as input material for new products. The circular economy isn’t just a sustainability buzzword – it’s a blueprint for a more resilient, equitable, and future-ready society!
Origins and Philosophy
The concept of circularity really began to gain traction in the late 20th century as a response to the environmental and economic inefficiencies of the linear economy.
Influential frameworks like the cradle-to-cradle design concept developed by professor Michael Braungart and William McDonough laid the groundwork, and the idea has gained increasing influence in mainstream policy and business discourse.
© DATA4CIRC 2025
Three Core Principles
The circular economy is founded upon three core principles:
- Eliminate waste and pollution – by designing products and systems that prevent waste from being created in the first place.
- Keep products and materials in use – through reuse, repair, refurbishment, remanufacturing, and recycling.
- Regenerate natural systems – by returning valuable nutrients to the soil and supporting biodiversity, rather than depleting it.
These principles are not just environmental ideals—they’re also economic strategies. Implementing circular policies and practices has the potential to reduce dependency on volatile raw material markets, create new jobs, and foster innovation.
The difference between traditional, linear economic models and a simple circular economic model © DATA4CIRC 2025
Isn’t the circular economy just the same as being sustainable?
Not so fast! Whilst sustainability and the circular economy are closely related, they’re not the same thing! The definition of sustainability contained in the UN’s 1987 publication ‘Our Common Future’, also known as the Brundtland Report, is: “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. However, there are many different definitions of sustainability and, as the Ellen MacArthur Foundation podcast notes, due to practices like ‘green-washing’ (misleading or false claims about the environmental benefits of a product or service), when people talk about ‘sustainability’ it can often feel like “business as usual, but less bad”.
According to Collective Green, a global organisation of green thinkers and change makers, the key difference between sustainability and circularity lies in scope and agency. Sustainability is a goal – a vision of a thriving planet and society. Circular economics is a means – a set of tools and strategies to help get us there.
So the circular economy basically just means recycling?
Not quite! Recycling is only one strategy that can be part of a circular economy. Recycling is about returning material to the system instead of it being lost to waste. It kicks in at the end of a product’s life, breaking down waste materials so they can be reprocessed into new items. But in the context of circular economics, recycling should be a last resort. Recycling is difficult without a good understanding of the components, materials etc. that make up a product. Think of it this way: recycling treats the symptoms, while circular economics addresses the root cause. A circular economy asks, “how can we prevent waste from being created in the first place?” whilst recycling asks “what can be done to save the waste that has already been created?”
The circular economy is about keeping materials in use at their highest value for as long as possible, not just recovering them after the fact. Recycling is, in fact, only one of a number of so-called ‘R-strategies’ in the arsenal of the circular economist! We’ll be exploring R-strategies in our next blog! Before we do that, let’s take a look at where are we at with the circular economy: is it already a thing? Is it just a dream for the future?
Does the Circular Economy Already Exist?
The good news is there is already a circular economy! However, it is still in its early stages and it needs to grow. Europe has emerged as a global leader in circular economic policy. The European Union’s Circular Economy Action Plan, launched in 2020 as a key part of the European Green Deal, has driven legislative and market-based initiatives especially across high-impact sectors like electronics, textiles, packaging, and construction. The plan aims to reduce consumption footprints and double the circular material use rate while boosting economic growth. Some key objectives include: making sustainable products standard across the EU; empowering consumers with better information and rights, such as the “right to repair“; and reducing waste and keeping resources in the economy for as long as possible.
As of 2022, the EU’s circular material use rate stood at just 11.5% and whilst it grew to 11.8% in 2023, progress is uneven. The European Investment Bank notes that this means less than one-eighth of materials used were recycled back into the economy, which highlights the scale of the challenge ahead.
The European Union has set the target of becoming climate-neutral by 2050. Circular economic principles will be a cornerstone of that transition. Future goals include:
- Making sustainable products standard through eco-design regulations and digital product passports.
- Empowering consumers with the right to repair.
- Boosting circularity in high-impact sectors like batteries, plastics, and food systems.
- Reducing waste exports and improving domestic recycling infrastructure.
Through projects like DATA4CIRC and its sister projects, the EU is also investing in innovation and digital tools – like AI-driven material tracking and Lifecycle Assessments – to accelerate the shift. The integration of circular principles within the digital transition is seen as a key enabler of systemic change. While Europe is leading the charge, the real success will come when circular thinking becomes second nature across the globe.
We hope this brief introduction to the circular economy has been helpful. You can keep up to date on the latest developments from our project by following us on the DATA4CIRC social media channels: