The circular economy has emerged as one of the strategic pillars to combat climate change and promote sustainable development.

Governments and institutions of the European Union have adopted action plans and policies (such as the Circular Economy Action Plan, part of the European Green Deal) that encourage the shift from a linear economic model to a circular one. Companies and municipalities are also beginning to implement circularity initiatives, recognising that rethinking the life cycle of products and materials is essential to reduce waste and create long-lasting value. But what exactly characterises the circular economy, and how does it apply across various sectors? Below, we explore the key concepts, benefits, and the role of digital technologies in this new paradigm, in a way that is technical yet accessible.

From Linear Model to Circular Economy

In the traditional “take-make-dispose” model (linear economy), natural resources are exploited to manufacture products which, at the end of their useful life, become waste. This single-flow system leads to resource depletion and continuous waste generation. In contrast, the circular economy aims to eliminate the concept of “waste” at its source, keeping products, materials, and energy in circulation for as long as possible. It is a production and consumption model based on strategies such as sharing, reusing, repairing, remanufacturing, and recycling, thus maximising the life cycle of resources. When a product reaches the end of its original use, its components are reintegrated into the economy through reuse, refurbishment, or recycling rather than being discarded. In short, it seeks to “circulate” value: what was once considered waste becomes raw material for new processes, in a continuous cycle of renewal.

Fundamental Principles: According to the Ellen MacArthur Foundation (a global reference in circular economy), this model is based on three guiding principles:

1. - Eliminate waste and pollution at source: Products and systems should be designed to minimise waste and emissions throughout their entire life cycle (e.g., avoiding non-recyclable materials or designing for durability).
2. - Keep products and materials in use: Maximise the use of already-produced goods via repair, reuse, remanufacturing, and recycling, maintaining materials in circulation at their highest possible value.
3. - Regenerate natural systems: Whenever possible, return resources to nature (e.g., composting organic waste to regenerate soils) and use renewable sources of materials and energy to restore rather than exploit ecosystems.

These principles directly contrast with the linear logic, which is dominated by planned obsolescence and rapid disposal. The circular economy seeks to decouple economic growth from the consumption of finite resources, creating a more resilient and optimistic system for both businesses and the environment. In other words, every element of our current system must change – from how we design products to how we deal with waste – to close the loop and build an economy that thrives within planetary boundaries.

Figure 1: Simplified illustration of the circular economy concept, comparing the linear flow of production/use/disposal (bottom line) with circular loops of reuse, remanufacturing, and recycling that extend the useful life of resources. The aim is to minimise waste and material “leakage”, keeping them in circulation and generating value repeatedly

 

Adopting this approach brings multiple benefits. Environmentally, circularity drastically reduces the amount of waste sent to landfill and associated pollution, while also decreasing the extraction of new resources – helping to protect natural habitats and biodiversity. It is estimated that circular economy strategies can significantly reduce greenhouse gas emissions, as over 80% of a product’s environmental impact is determined at the design stage.

Economically, by extending the use of materials and products, dependency on virgin raw materials (which are finite and often concentrated in a few countries) is reduced. This increases resource security and lessens exposure to global price volatility. Additionally, encouraging reuse and recycling chains creates new business opportunities and can generate “green” jobs in activities such as repair, refurbishment, waste management, and advanced recycling.

In summary, the transition to a circular economy offers not only environmental gains but also efficiencies and competitive advantages for businesses and countries that lead this transformation.

Waste Valorisation: From Rubbish to Resource
In the circular economy, waste is seen as raw material with potential for new production cycles. Waste valorisation goes beyond traditional recycling, including practices such as: Reusing (using again without alteration), Remanufacturing (restoring to original condition), Upcycling (transforming into higher-value products. The main goal is to keep materials in use and avoid disposal.

Examples include:

• Organic waste is converted into fertilisers or biogas, returning nutrients and renewable energy to the economic cycle.
• Wood and plant waste turned into pellets or composite panels.
• Recyclable materials (plastics, metals, glass, paper) reintegrated as secondary raw materials, reducing extraction of natural resources.
• Electronic waste containing rare metals (gold, copper, cobalt, and rare earths) is recovered for reuse, reducing pressure on traditional mining.

Also notable is the concept of industrial symbiosis, where the waste of one industry serves as raw material for another, creating sustainable production ecosystems. For instance, companies turning food and agro-industrial waste into organic fertilisers, thus reducing the need for synthetic chemicals. Waste valorisation brings clear environmental benefits, which is why countries are strengthening recycling targets and adopting policies like Extended Producer Responsibility (EPR), requiring companies to consider recycling and reverse logistics already at the product design stage.

However, challenges remain: materials are still underutilised due to technological and economic constraints, and public awareness of recycling is still insufficient. Transitioning to a circular economy requires technological innovation, new business models, education, and cultural change, so that everyone views waste as a valuable resource, not a problem.

Digital Technologies Driving Circularity

The transition to a circular economy heavily depends on digital technologies, which are essential to managing the complex chains of material reuse and recycling. ICT (Information and Communication Technologies) makes it possible to monitor, optimise, and integrate processes that were previously unfeasible. Key emerging technologies include:

• Internet of Things (IoT): enables real-time monitoring of product usage, facilitating preventive maintenance and reducing waste. Smart sensors also optimise waste collection, avoiding improper disposal.
• Artificial Intelligence (AI) and robotics: accelerate and improve automated waste sorting, identifying materials with greater precision. AI also optimises production processes, minimising raw material losses.
• Blockchain and digital traceability: provide transparent records of material journeys, ensuring ethical sourcing and facilitating reverse logistics and circular practice certification.
• Digital platforms for sharing and industrial symbiosis: online marketplaces enable companies to exchange industrial waste and by-products, reducing the need for new resources. Mobile apps also promote sharing economy models such as tool or vehicle rentals.
• Industry 4.0 (innovative materials and processes): technologies like 3D printing allow on-demand manufacturing, extending product life. Automated processes facilitate component reuse, while biotechnology transforms organic waste into new products.

These technologies, integrated with big data, 5G networks, and advanced analytics, give companies complete visibility over their circular operations, increasing efficiency and reducing costs. This leads to new business models, competitive advantages, and improved brand perception among consumers and investors. In short, digital technologies are indispensable to accelerating the transition to a circular economy, enabling more effective and sustainable interventions throughout the entire value chain.

Conclusion

The transition to a circular economy is not just a conceptual option – it is a real necessity in the face of today’s planetary challenges. In a context of limited resources and increasing environmental pressure, the linear model of production and disposal has become unsustainable. The circular economy presents an integrated approach capable of addressing climate change, biodiversity loss, pollution, and inadequate waste management, offering an optimistic vision of the future where economic growth aligns with sustainability.

By embedding circularity in their strategies, companies gain not only environmental benefits but also greater economic value through resource savings, innovation in products and services, and strengthened brand image among increasingly conscious consumers. However, for this shift to happen on a global scale, joint involvement from all sectors of society is essential. Governments must implement policies that encourage transformation; businesses should invest in research and development of circular products and models; academic institutions must train professionals in circularity; and citizens must adopt sustainable practices in their daily lives.

Every action matters, and everyone has a role to play in this systemic change. The circular economy is not just a passing trend – it is a new paradigm that redefines the meaning of progress, efficiency, and innovation. With advanced technology, expert knowledge, and cooperation across sectors, this paradigm can be consolidated, ensuring a smaller ecological footprint, regenerative wealth creation, and a sustainable legacy for future generations.

The future belongs to the circular economy – a future where nothing is wasted, and everything is transformed.

Opinion article by: Tiago Pacheco, Science and Business Manager