What is a circular economy?

A circular economy is a model of production and consumption that is based on three principles: eliminating waste and pollution; reusing products and materials; and regenerating nature.

It is a fundamental change in the way the world produces and consumes goods in order to tackle the global challenges of climate change, biodiversity loss, finite resources, and pollution.

To do this, the circular economy seeks to transform the current linear take-make-waste system by focusing on models of production where resources are kept in use and waste is minimised. This involves redesigning products to be more durable, repairable, reusable, and ultimately recyclable. It is a system underpinned by the transition to renewable energy and focused on regenerating nature.

An example of this in action is automotive manufacturer Groupe Renault, which in late 2020 established Europe’s first circular economy factory dedicated to mobility. Called Refactory, Renault aims to extend the life of its vehicles through remanufacturing components, increasing recycled plastic content, and creating a second life for electric batteries.