The Circular Economy: From a Linear to a Circular Economy

Recommended Strategies Based on the 'Drivers'

1. Business Models Need To Be Structured Differently With The Objective Of Creating More Value Per Unit Of Raw Materials.

Worldwide, supply chains will be more and more circular. As a result of this, the cost of recycling materials (higher on the ladder of Lansink can decrease. With steel, for example, the circularity method is predominantly recycling. This positions it too low on Lansink's ladder; this circularity's value even turns out to be negative. This means that the value of the circular feedback loops is lower than the new value. Scaling up within the chain might change this.

Recycling and upgrading finished products and/or parts of finished products is important in moving up Lansink's ladder. This can be done in various ways: renovate, upgrade and bring to the market as an enhanced product; offer products as good second-hand equipment with guarantees; offer products as second-hand but still useable; and by using data about product usage in the development of new products.

This results in a larger potential for cost savings and promotes prosperity and employment. Many theories have this as their subject. But an overview that also relates to the application field is lacking. These theories have the following characteristics:

• The manufacturing of a service product usually happens through cooperation;

FIGURE 4: LANSINK'S LADDER. 

• Money is no longer the only currency, more often it is about the exchange of needs. In other words, the added value shifts from ownership, possession, and control to having access to, use when required, and trust.

2. Reaching Critical Mass And Handling The Correct Materials.

Start with four categories of materials and choose the correct raw materials from one of them. The first category consists of 'Golden Oldies' containing paper, metal, and glass among others. In addition, initiate a number of 'trigger projects' to reach critical mass. MacArthur and Kinsey put it like this: at the beginning, a material that has many applications should be chosen.

The potential is evident but to make circular thinking a success companies will have to change their way of operating and develop new business models. And that is not all that is needed. New services or products (technologies); a different customer relationship; ICT systems for making data available. The availability and the use of relevant information is a factor for success where improving operational processes and recording feedback loops are concerned.

Often only limited use is made of information that is already available simply because it is not known that the information is available or because it is not easy accessible. The capacity and the instruments to improve on this are often not available whilst knowledge is. This knowledge (put into practice) is often not used. If we don't bridge that gap, we stay stuck in the 'innovation paradox'. 

Steel

Steel is one of the five base materials that are most in demand. The production of steel contributes about 25 per cent to total industrial CO₂ emission. The circularity of base metal consists mostly of recycling. It is on a low rung of Lansink's ladder; the value of this circularity is negative (that is the value of the circular feedback loops compared to the new value).