By C-SUSTAIN project team
What is circular economy?
Figure 1: Pixabay (by HOerwin56, downloaded on 31.07.2026)
This article was created without using AI.
There are different systems in economy, which dictate how goods and resources are used. Circular economy is one of them.
Currently, we largely live in a society built on a linear economy. In linear economies, natural resources are turned into base materials and products and lose their value and functionality once they have been used, therefore becoming waste. The products bought by the owner and user come with liability risks and responsibility of disposal. In a system promoting planned obsolescence and overconsumption, the “bigger-better-faster-safer” syndrome of a linear economy is detrimental to material consumption. It facilitates the growth imperative of capitalism and results in highly complex supply chains separating production and consumption geographically, while simultaneously being very materially and energetically intensive and harmful to the environment.
The circular economy juxtaposes the life of a product from a take – make – waste (Kromoser, 2026) timeline to a circular one, where products can be, at least most of the time, continue to be used in some way for a long time. The basic idea of circular economy is to reuse, recycle, repair and remanufacture so that loops in industrial ecosystems are closed and waste minimized. That can, for example, refer to the deconstruction of an old house to build a new one somewhere else, or the remelting of jewellery to craft something new. The initial act of extracting resources loses importance as how the material is used and repurposed comes into focus. If implemented on a societal scale, practices of recycling and reusing can generate jobs and save energy at the same time as they are reducing resource consumption and waste. A shift to a circular economy could potentially reduce material use by up to 28% and greenhouse gas emissions by up to 39%.
Another economic system is a performance economy. Sold goods here are services: Products can be rented, leased or shared but not owned. The product is instead owned by the manufacturer, so the responsibility for costs of risks and waste are placed upon them. The focus in a performance economy lies on solutions instead of products. Its profits come from sufficiency, for example through waste prevention. Circular and performance economy combined pose a great alternative to our current economic system, which is fatally struggling to address the impact it has on the planet (Circular Economy, 2021; Stahel, 2016, pp. 435–436).
The history of circular economy
Contrary to popular belief, circular economy is not a new thing but was central in the pre-industrial economy and is largely how ecosystems work in nature. In natural ecosystems no creature only extracts without giving back; there is always a circular process behind it: Like birds eating the fruit on a tree and at the same time fertilizing its seed.
In the pre-industrial period material and resources were reused or recycled most of the time because of the high cost of sourcing raw materials, processing and transport of goods. Additionally, the construction methods used were simpler, so separating the components and materials did not require as much effort as it does today (Kromoser, 2026).
The circular economy action plan of the European Commission containing 54 actions was adopted in 2015. It should promote a transition to a circular economy, boost the competitiveness of Europe on a global scale, foster sustainable economic growth and generate new jobs. In the same year, the sustainable development goals (SDGs) were adopted by the United Nations. Though in 2023, still only about 7% of the materials extracted were recycled. In the figure below the material flow of 2024 in the European Union is illustrated.
The agreement between Nations on the SDGs as a comprehensive plan to tackle worldwide social and environmental crises is, in principle, a great achievement. However, they include contradictions and skate over genuine solutions. Moreover, the “growth solution” remains at the heart, even though it was proven time and time again that the effects extraction and pollution have on the wellbeing of the population cannot be addressed without a significant cut in growth GDP in the global north (First Circular Economy Action Plan - Environment - European Commission, n.d.; Higgs, 2020).
Figure 2: Material Flow Diagram for the European Union 2024 (Eurostat, n.d.)
The future of circular economy
The European Union mentioned circular economy as a central part of developing a sustainable future. How to achieve this abstract goal practically still needs to be figured out. Looking at the linear economy model in place today there are various strategies which could make at least a more circular economy possible.
A fairly simple strategy would be digitization for better communication and traceability of products. Also, more research regarding waste management for all types of materials should be encouraged and technological development advanced. There needs to be an incentive for companies to localize their production and prolong the product life, essentially retiring planned obsolescence (a topic for another day). Sharing products and resources is another way to cut down on material consumption (Klein, 2023, p. 457; Yang, 2024)
At the same time, it is important to keep in mind, that circular economy can only work to some extent and that it is crucial to cut down on consumption of resources as a whole; there is a need for absolute and measurable guidelines for resource protection (Klein, 2023, p. 458). The Raw Material Consumption (RWC) or Material Footprint is monitored regularly and currently at over 100 Billion tons per year globally, more than double the maximum sustainable threshold calculated by scientist which is 50 Billion tons per year (indicated by the horizontal blue line in figure 3) (Bringezu, 2015, p. 33).
Figure 3: WU Vienna (2023): Material flows by material group, 1970-2024. Visualisation based upon the UN IRP Global Material Flows Database. Vienna University of Economics and Business. Online available at: materialflows.net/visualisation-centre
Outlook
In conclusion, reducing the total mass of material consumed is a key component of creating an economic system that can last. Increasing the incentive for companies to produce products with the longest possible lifespan, creating a network for sharing things and refining recycling methods can be steps to get there. What is, in my opinion, the wrong approach, is to shame the greater public for their behaviour compliant with consumerism. Because even if you try to consume very mindful, the linear economy currently in place makes it close to impossible to live sustainably if you participate in it at all.
Sources:
Bringezu, S. (2015). Possible Target Corridor for Sustainable Use of Global Material Resources. Resources, 4(1), 25–54. https://doi.org/10.3390/resources4010025
Circular Economy: A smart way of using materials – materialflows.net. (2021, November 1). https://www.materialflows.net/circular-economy/
Eurostat, M. flows account. (n.d.). Circular economy flow diagrams. Eurostat. Retrieved 2 August 2026, from https://ec.europa.eu/eurostat/cache/sankey/circular_economy/sankey.html
First circular economy action plan—Environment—European Commission. (n.d.). Retrieved 2 August 2026, from https://environment.ec.europa.eu/topics/circular-economy-topics/first-circular-economy-action-plan_en
Higgs, K. (2020). Chapter 5: How Sustainable are the SDGs? In Ecological Economics: Solutions for the Future. Haydn Washington.
Klein, A. (2023). Recycling und Kreislaufwirtschaft. Forschungsjournal Soziale Bewegungen, 36(4), 457–460. https://doi.org/10.1515/fjsb-2023-0046
Kromoser, B. (2026). Kreislaufwirtschaft – ein Opfer der Industrialisierung? Die Bautechnik, 103(3), 221–222. https://doi.org/10.1002/bate.70108
Stahel, W. R. (2016). The circular economy. Nature, 531(7595), 435–438. https://doi.org/10.1038/531435a
Yang, J. (2024). Vom Null-Abfall zum geschlossenen Materialkreislauf: Der Weg zur Kreislaufwirtschaft. Springer Vieweg. https://doi.org/10.1007/978-981-97-9652-6
