Circular guide

CIRCULARITY GAP: the first circular economy concept

Didactic Units 3.2

There is still a long way to go for a more circular future. Knowing the GAP that separates us from an ideal circularity and the opportunities that a company can seize, are the first steps to be successful in this transition. Let’s learn more about this important concept of the circular economy in this didactic unit. The circular economy is a business model that pushes to reuse “matter” as much as possible in any production process, trying not to waste resources and transforming waste into new opportunities, for a real RENEWAL OF MATTER. This change must be seen by companies as an opportunity to transform what they previously considered waste as a new resource, bringing not only environmental but also economic benefits. In a production, trying to reuse one’s waste or find a suitable market that can buy it to recycle it has always been difficult in Italy, both for regulatory problems, for CERTIFICATIONS, for safety the quality of the waste (and consequently the resulting product), and the knowledge of possible buyers and a structured industrial network ready to use them.

In recent years there has been however a change of course to try to encourage and accelerate their recycling and reuse, regulating authorizations END OF WASTE to European indications to cease the qualification of waste and thus be able to sell them in the market and use them for specific purposes. Even the advent of new NETWORKS AND DIGITAL PLATFORMS has helped to underline the importance of creating a network of companies, local authorities, service companies that sharing experiences, projects, by exchanging and trading materials and resources, they are able to achieve the objectives of the circular economy. The current scenario, however, shows that the road is still long to reach a true circularity and the gap to be filled for a correct reuse of the material is broad.

Circularity GAP: the circular economy concept that measures circularity

To know what the current “state of circularity” of our society is, the Circularity GAP can be understood as the unit of measurement that allows you to understand the state of the art of the circular economy at a global level or of individual countries. The first measurement was proposed and developed by Circle Economy which has actually pointed out the lack of global baseline measurements of the circular state of our world or data available to truly understand how one can actually move towards a full circular transition and monitor progress. These data allows us to have a starting point to understand which sectors and which countries need more support to give a circular benefit to the whole planet.

The latest report presented in 2019 (download here) shows how currently our world is circular only at 9% and the trend is worsening instead of better, the circularity gap is not closing. An upward trend in resource extraction has been identified and consequently greenhouse gas emissions have continued, going against the indications of the Paris Agreement which wants to maintain the global temperature increase of 1.5°C compared to the pre-industrial period. All the key indicators confirm that the problems of a linear economy are “cooking” our planet and that, moreover, the engine of our global economy is going the opposite of how it should go. Material extraction has fueled economic progress since the Industrial Revolution, while at the same time causing man-made greenhouse gas emissions. There is therefore a close interplay between material extraction, financial value creation and greenhouse gases emissions. Analyzing data, over the past four decades the global use of materials has nearly tripled, from 26.7 billion tons in 1970, to 92.1 billion tons in 2017 and is expected to grow between 170 and 184 billion tons by 2050.1

The interaction between matter, economic value and carbon emissions – MVC(Mass-Value-Carbon) 

Circle Economy in his report measuring circularity, analyzed the global economy through three objectives fundamental for circularity: material performance, creation of financial value and climate emissions. This Mass-Value-Carbon (MVC) nexus provides a dynamic conceptual framework for the identification and evaluation of key variables for the development of the circular economy. Being able to understand which materials ( Mass ) have more value than others ( Value ) both in terms of extraction costs and revenues in the market, and what their impact is in terms of carbon emissions ( Carbon ), allows you to carry out various assessments on how it is appropriate to develop new strategies and projects to incentivize or discourage, recover, recycle or reuse materials compared to others.

The analysis carried out is able to highlight the correlation between 4 main groups of primary resources (minerals, metals, fossil fuels and biomass) and their use in 7 needs and requirements of society:

  • Homes and infrastructure : The need that represents the largest resource footprint, with 42.4 billion tons, is for the construction and maintenance of homes, offices, roads and other infrastructure, especially in developing countries.
  • Food : The second largest category in the terms of use of resources is the food sector. Agricultural products such as crops and livestock require 21.8 billion tons per year. Food products have short life cycles in our economic system and are consumed quickly after production.
  • Mobility : A substantial footprint of resources is absorbed by our need to move. In particular, two types of resources are used: materials to build transport technologies and vehicles such as cars, trains and planes and fossil fuels, burned to power them.
  • Consumables : are a diverse and complex group of products, such as appliances, clothing, detergents, personal care products, paints or general items, which generally have a shelf life of medium-short life in society. Textiles, including clothing, also consume many different types of resources such as cotton, synthetics such as polyester, dye pigments and chemicals.
  • Services : the provision of services society ranges from education and public services to commercial services such as banking and insurance. The material footprint is modest overall and typically involves the use of professional equipment, office furniture, computers and other infrastructure.
  • Healthcare : With an expanding, aging and, on average, more prosperous population, health services are increasing globally. Aside from buildings, typical resource groups include the use of capital equipment such as X-ray machines, pharmaceuticals, hospital equipment (beds), disposable items, and home care equipment.
  • Communication : Communication is becoming an increasingly important aspect of today’s society, provided by a mix of equipment and technologies ranging from personal mobile devices to data centers. Increased connectivity is also an enabler of the circular economy, where digitization can make physical products obsolete or enable more efficient use of existing resources, including consumables, building stock or infrastructure.
circularity gap

The 4 raw materials identified and the 7 main needs of the company, are related to each other by the different use of the former to meet the needs of the latter, in different stages of processing and processes. The resource extraction (Take) is the first phase of measurement, for example through the extraction of minerals and coal, oil drilling, crop production in agriculture or forestry for producing timber for construction. The second step is the processing of the extracted raw materials (process), for example in the production of metals from minerals, cement from limestone or refined sugar from beets. Subsequently, the refined materials can be used for manufacturing (manufacturing) and assembly of products such as metal, plastic and glass automobiles, or for road and house construction or manufacturing of clothing. These finished products can in turn be used to (provide) services and access products that meet the needs of society. Crucial to identifying and addressing opportunities for a more circular economy is to establish what happens to products and materials after their functional use in our economy (End of use). How are materials processed, if at all, after being discarded, rather than ending up as waste, emitted or dispersed into the environment? Circle Economy in its report calculated what is the trend of this material flow by representing it in figure 1, identifying a GAP at the complete circularity of 91%, in fact only about 9% of the entire material used in the various industrial supply chains is recovered and reintroduced into the production system.

This methodological approach MVC (Mass-Value-Carbon ) with the measurement of the raw materials extracted, their processing and their use to satisfy the 7 needs of society, can be used in different reference scales. It can be used to measure the circularity of a city, of a Region or of an entire country, thus identifying what the real circularity is and what innovation actions can be for its improvement.

Going to reduce the scale of application, this method can also be used for all companies and businesses that want to be aware of what their status of circularity is and how be able to improve it and be able to compare with global indicators.

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    Circularity GAP Report 2019

    Author’s note : this article has taken as reference the Circularity GAP Report 2019, inserting contents present in the document to spread also in the Italian market, an important concept of sharing and uniformity of data. The circular economy needs to be standardized and comparable with parameters and data at a global level to achieve common circularity objectives.INTELLECTUAL AND INDUSTRIAL PROPERTY RIGHTS – LIMITATION OF USE
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