123Fab #102

1 topic, 2 key figures, 3 startups to draw inspiration from

The circular economy redefines traditional economic models and contrasts with the “take-make-waste” linear approach. In the latter, resources are extracted to create products that later become waste, with very limited uses or value recovery. Circular economy, on the other hand, emphasizes sustainability, keeping materials in use for as long as possible while minimizing waste and resource consumption.

Key frameworks such as the Value Hill and the Butterfly Diagram shed light on how this system works: the Value Hill describes how to maintain and regain value at every stage in a product’s life, while the Butterfly Diagram helps to visualize infinite cycles of reuse and regeneration within an economy. (For more information, read those articles on the Value Hill and Butterfly Diagram.)

At its core, the circular economy is guided by seven pillars, each offering actionable strategies to reduce waste, optimize resource use, and foster innovation. Let’s delve into these principles and their potential for transformative change in driving sustainability.

The 7 Pillars of the Circular Economy (as defined by l’ADEME)

1. Sustainable procurement: This involves considering the environmental and social impacts of resource extraction and usage, with the aim of minimizing waste and greenhouse gas emissions. The goal is to prioritize sustainable resources by choosing suppliers based on ethical and environmental standards, aligning with the overall circular model.
2. Eco-design: This involves considering the entire life cycle of a product or service, from the design stage onwards, to limit its impact on the environment. A very good example is the Renault Scenic E-Tech Electric, with its high rate of recycled materials in the manufacture of the car. Many parts are designed to be recyclable at the end of their life to reduce its ecological impact as much as possible.
3. Industrial and territorial ecology (or industrial symbiosis): This pillar connects various economic actors to optimize the use of local resources such as water, energy, materials, waste, equipment, and expertise. By sharing resources, one company’s waste becomes another’s resource. The most representative example of industrial symbiosis is the one in Kalundborg, Denmark, where companies like Novo Nordisk (pharmaceuticals), Ørsted (energy), and Kalundborg Municipality collaborate to share resources such as steam, water, and industrial by-products. This innovative collaboration not only optimizes resource use but also drives significant cost savings and reduces the overall carbon footprint.
4. Service economy: In this model, usage is prioritized over ownership. It emphasizes offering services connected to products rather than selling the products themselves, which extends their lifespan without consuming more material resources or energy, creating jobs, and encouraging sharing. A notable example is Michelin‘s “Tyre as a Service” model, where the company retains ownership of the tires and manages their entire lifecycle—maintenance, retreading, and recycling. Thus, customers are charged based on usage: per kilometer for trucks and per landing for airplanes.
5. Responsible consumption: Consumers, whether individuals or organizations, must consider the environmental and social impacts of products at every stage of their life cycle. This means choosing sustainable products and adopting eco-conscious consumption habits. Key questions include: Do I really need this? Is the product recyclable? What materials were used? How was it made?
6. Extending product lifespan: Consumers should opt for repairing, reusing, or donating unused or broken items to give them a second life. This not only benefits the environment but also supports circular business models and offers financial savings. For example, Back Market, a French platform specializing in refurbishing electronic products, collects smartphones, computers, and other devices nearing the end of their life, repairs them, and resells them, reducing e-waste and offering affordable products.
7. Recycling: This is the final phase of the circular economy whereby existing materials are converted to other new forms. The process is to recover and reduce the amount of waste by recycling into raw materials. This closes the cycle as recycled materials start being used for procurement. For instance, ROSI provides an innovative solution for recycling and valorization of raw material in the photovoltaic industry. Their technology can recycle all valuable raw materials in waste solar panels, including silicon.

How can companies benefit from the circular economy?

Businesses can significantly benefit from the adoption of circular economy principles through new profit opportunities, cost reductions from lower reliance on volatile raw materials and increased use of recycled inputs. New business models, such as rentals or leasing, also create stronger, long-term customer relationships by increasing touchpoints throughout a product’s lifecycle.

2 Key Figures

70%

Material extraction and use amount to 70 percent of global greenhouse gas (GHG) emissions.

7.2%

 Only 7.2 percent of used materials are cycled back into our economies after use.

3 startups to draw inspiration from

Hubcycle

A French startup that specializes in upcycling food industry by-products into valuable ingredients. By sourcing vegetal by-products from industrial food processes before they are discarded, Hubcycle transforms them into ingredients for the food, pet food, cosmetics, and homecare sectors. This approach eliminates the need for new raw materials, reducing environmental impact and significantly lowering the carbon footprint for both suppliers and customers.

GreyParrot

A UK startup, leading the way in AI-driven waste analytics for the circular economy. GreyParrot aims to increase transparency and automation in waste management, unlocking the hidden financial value of waste. With its advanced AI-powered computer vision systems deployed globally in sorting facilities, the platform can monitor, analyze, and sort waste at scale. GreyParrot’s insights will help waste managers, producers, and regulators increase recycling rates.

Faircado

Berlin-based, Faircado has created a browser extension designed to promote the circular economy. The idea is simple: thanks to artificial intelligence, the extension uses a combination of image and text matching to suggest second-hand alternatives when you search for a product on the Internet. Faircado supports 1,600 sites, including Amazon, Zalando, Patagonia and Apple. These recommendations come from over 50 partners, including eBay, Back Market, Grailed, Rebuy, Vestiaire Collective…

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