The European Commission Circular Economy Strategy

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The linear economy is founded on the principle of preventing waste by transforming natural resources into energy. When items are made and then thrown away as garbage, the environment suffers. Although recycling is well-established in our culture and efforts to improve resource efficiency are encouraged, efforts to ignore the limited nature of available resources. While a circular economy minimizes waste formation throughout the production process, it restores any damage caused during resource acquisition. According to some stakeholders, CE may improve the environment, economy, and society even if it has no net impact on the environment.

According to the European Commission (EC), a new economic model must be laid the groundwork. An EU action plan defines a CE as maximizing the value of commodities, materials, and resources while minimizing waste and resource utilization. It is only the beginning; a significant part of the waste strategy and the parliamentary package is improving leftover avoidance, reuse, recycling, and recovery.

The circular economy marks a paradigm change in the quest to combine economic activity with ecological well-being. It strives to replace the end-of-life idea in manufacturing and consumption processes with the 4Rs, which stand for reduction, reuse, recycling, and recovery, and to slow down, conclude, and shorten resource and power loops, among other things. Put another way, at the meso level, this implies repurposing products that have reached the close of their valuable lives into assets for others, extending the commercial life of commodities and supplies and completing loops while also decreasing waste.

A company’s primary goals are to save money by using less raw resources, reducing waste, safeguarding the environment, and avoiding contamination. However, resources are evidently limited due to the high demand in meeting the company’s needs. This has been continuously a huge challenge in achieving a circular economy as most firms resort to other means which are not eco-friendly. There is a temptation to use non-recycled energy, which is discouraged due to its adverse effects on the environment.

Another challenge being encountered by the circular economy is that despite governments formulating policies to encourage the use of recycled resources, little effort is being made to ensure different players in the economy adhere to these policies hence fewer results from the campaign. In addition, regardless of the fact that the circular economy means to preserve the environment and create a suitable and safe economy even for future generations, most people are still not aware of it, and hence their effort in supporting it is little.

The Ellen MacArthur Foundation outlined a three-point strategy for preserving and enhancing natural wealth. These three principles are: controlling fixed stocks, harmonizing renewable reserve flows, and improving resource production by using yields, constituents, and materials with the maximum utility while nurturing system efficiency by enlightening and removing undesirable externalities. Reduce, reuse, recycle, and recover are the CE’s four guiding principles (Garcés-Ayerbe et al., 2019).

In the classic linear economic system, recycling has been adopted because various governments have pushed it. The replacement rate drops, resulting in less waste since long-lasting products have a longer lifespan and need less maintenance. Recycling has come a long way, but it is just the beginning. Changing laws and how society creates and uses innovations will be necessary for the CE, drawing from nature to address social and environmental concerns.

When discussing the implementation of CE activities, taking resource availability into account is critical. Companies with many resources are more likely to invest in innovative production techniques, like lean manufacturing. Despite this, according to the Organization for Economic Co-operation and Development (OECD), most businesses in OECD nations are SMEs. About all businesses in the EU belong to the same group. As a result, the emphasis of circular economy approach research should be on companies like this one.

Thanks to the EU’s new circular strategy, a purified and much more competitive Europe will be made possible. The European Commission approved circular economy action plans (CEAP) in March 2020. It’s a key pillar of the European Green Deal, the continent’s new goal for long-term prosperity. Circular economic transition in the EU will minimize the demand for natural resources while also generating sustainable development and employment opportunities.

The EU’s 2050 climate neutrality goal and the halting of biodiversity loss are both predicated on it. The revised action plan includes announcements for projects across the product life cycle. Designing goods with sustainability focuses on how they are made, fosters circular economy processes, and promotes environmentally-friendly consumption. It also tries to reduce waste and keep the resources they utilize inside the EU economy for the longest time feasible. In sectors where EU intervention adds genuine benefit, it proposes legislative and nonlegislative initiatives.

Making the shift from linear thinking to a more circular one may open up new markets and increase market share while lowering costs and risks for firms. It can also spur innovation, entice top-notch employees to join, and better match corporate performance with the public’s expectations. By prioritizing where they should take some action to reduce greenhouse gas emissions, species extinction, and pollution, companies may adopt a value chain strategy to make ‘transformational sprints’ towards circularity. As manufacturers move toward a nature-positive solution and net-zero carbon emissions, successful companies will be those who provide good value while using few resources and impacting the environment as little as possible. Using concepts of circularity may assist companies in making a swift and effective transition towards these important goals for mankind and the earth alike.


Garcés-Ayerbe, C., Rivera-Torres, P., Suárez-Perales, I., & Leyva-de la Hiz, D. (2019). Is it possible to change from a linear to a circular economy? An overview of opportunities and barriers for European small and medium-sized enterprise companies. International Journal of Environmental Research and Public Health, 16(5), 851. Web.

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