Reuse : System Change to Circular Economy and its Impact on the Waste Management Sector

The European Union has set ambitious climate change mitigation goals which it aims to achieve through measures that include the development of its economic system into a circular economy. Recycling has been misunderstood as the main pillar of a circular economy and therefore the importance of the waste management sector has been overestimated. Recent research by the author in a publicly funded project by the German Environmental Agency (Umweltbundesamt) ‘Weiße Ware Wiederverwenden’ (Reuse of White Goods) shows that while the waste management sector has a role to play, the groundwork towards a circular economy must be done by industry, especially by the producers of all kind of products. Their designs will determine the role of waste management in the future. After use, products will remain in newly developed CER twigs to direct the invested environmental costs in kg CO2e back to earlier points of the life cycle, following the pathways of the lowest emissions. Therefore, less and different waste will reach the traditional waste sector streams. The role of the waste management sector of the future will depend on changes in the system boundaries. Until this is decided, waste management must deal with the waste of yesterday and adapt to the waste of tomorrow.

With the European Green Deal the European Union and its Member States are striving to become the first climate-neutral continent in the near future. To reach this aim, ‘The European Commission has adopted a set of proposals to make the EU's climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.’ (European Commission 2021) The reduction of these emissions should be done intelligently and not just in the form of radical restrictions on consumption. The EU wants to be climate-neutral by 2050, which means reducing CO2 emissions dramatically. (European Commission 2019)

There can be no ‘business as usual’ and merely cosmetic measures will not help to stop climate change and thus not prevent damage that is devastating to humanity. Policies alone are not sufficient to reach the goals. Significant efforts by all social groups, authorities and all economic sectors are necessary to achieve the reduction goal. Specifically, the Commission and the Member States intend to implement a circular economy that fulfils the task of reducing emissions as a new form of economy. (Directorate-General for Environment 2023a)

Producers, consumers and the waste management sector must play their part (climate change mitigation) in order for this to be successful and progress is not yet fast enough, according to the European Commission. (Directorate-General for Environment 2023b)

If we look at the detail, however, the situation is not that easy. We still lack knowledge of exactly how to manage products in circles so that products or parts of products follow the life cycle paths that cause the lowest emissions. Research on how to establish a circular economy for white goods determined that this would result in a large number of circles going back to different points in a life cycle for each product. (Ludwig et al. 2023) In the current discussion on how to realise a circular economy, ‘ecological design’ and ‘recycling’ are well-known keywords, while other important methods for creating a circular economy are hardly considered.

This means that totally new industries must be developed to close the circles. If that is so, the question is how this would change the current market players like the waste management sector. There was a slight misunderstanding caused by the EU’s Circular Economy Action Plan (CEAP) amending the EU Waste Directive in 2015 (European Parliament 2008), where the waste management sector would be the main player in a circular economy and therefore the recycling of materials was seen as a synonym for a circular economy. (Directorate-General for Environment 2023b) Even though the ‘waste hierarchy’ mentioned ‘prevention’ and ‘preparing for re-use’ as processes for handling products before they lose the functionality of their intended use, the directive, its amendments and the communication of the European Commission and the European Parliament always refer directly to the waste management sector and material recycling targets. This is a mistake that is also made in relation to communication about the circular economy. (European Parliament 2023)

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However, ‘recycling’ is just one of the lower levels of a circular economy. (Ludwig et al. 2023:58) Recycling means that invested environmental costs which were necessary to create a product are lost forever. Environmental costs are not calculated in euros, their ‘currency’ is (at the moment mainly) kg CO2e. It is beyond doubt that recycled materials often have fewer environmental costs compared to newly mined materials, taken directly from nature and processed industrially to obtain usable pure materials, like aluminium or copper. (Franken, Vasters 2000:7) But this fact does not justify focusing mainly on recycling when talking about a circular economy. Furthermore, calculations as to how much material industry would obtain in the future from the recycling sector do not take into account the system change a circular economy really implies, instead merely calculating the hunger for input materials in current industrial production and expected growth in the years to come. (European Aluminium 2020) Producers of industrial input materials, whether they produce e.g. aluminium from bauxite or scrap, have the opinion that a circular economy means just obtaining more scrap in purer fractions and they assign the role of ensuring purer fractions to the waste management sector (complaining at the same time that they themselves will need to invest a huge amount of money, which is in reality just investing in the growth of their business model and not an investment in a circular economy). (Siebel 2022)

This might all be very true if recycling would be the main and most important measure for realising a circular economy. But it isn’t. Why? Because if it is not done at the right position in a circular economy, recycling wipes out environmental investment. At present (in 2023), recycling takes place within the traditional linear economy. Recycling is generally a good idea, but if implemented within an otherwise linear economy it hinders the development of a circular economy. Still, policymakers continue to favour recycling.

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The eight points above might give the impression that recycling would not be such a good idea, but this is not the case. Recycling has a place in a circular economy, and within a circular economy it should be handled efficiently with very good methods for collection, sorting and processing, when the product or parts of it actually become waste. Furthermore, research and development by the producers of recycling machines, collection systems and secondary raw material production, like pellet making or chemical recycling, is both necessary and useful.

The point of the matter is that any introduction of recycling methods should not hinder economic players when it comes securing as much environmental investment as possible during the life cycles of a product. In other words, recycling gives those affected the feeling that they have already done the best they can, which prevents them from fulfilling their real responsibility (EPR). Recycling activities should also avoid cherry-picking, namely removing just the ‘interesting’ fractions from waste and leaving the rubbish behind (on the streets), which is nowadays seen as a problem in plastics recycling projects, e.g. in Western Africa.²

^{2 E.g. in Ghana. At the ISWA Germany/GIZ Prevent event in Eschborn, several organisations mentioned this problem.}

In fact, recycling is just one of the many Circular Economy Recirculation twigs (CER twigs). As mentioned above, there are many circles that start at different points in a product's life cycle and go back to different points in the same product's life cycle. In a project financially supported by the German Environmental Agency and the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) with the participation of the author of this article concerning white goods, these closing-the-loop parts of circles were named in German as ‘KWR-Kreise’ (abbreviation for Kreislaufwirtschaftsrückführungs-Kreise) (Ludwig et al. 2023:58) In this article, it is proposed that they be given the English name ‘CER twigs’ (Circular Economy Recirculation twigs).

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The simple circular economy model is derived from nature. The idea behind it is that a plant grows and when it dies it decays and gives its material back to nature to feed a new plant exactly at the location where it lived. In an economy with production, trade, import and export, the life cycles of products are not that simple. There are many more cycles, branching off from the main cycle at various phases within the life of a product. Furthermore, the use of products interacts with the use of other products or resources. Returning to the main idea of a plant, the plant consumes water, releases it again and can reuse it when it enters the soil. The water could also be used by other plants or animals. In addition, excretions from animals could be used as fertilisers for plants, and so on, indicating a high level of interaction.

The crucial difference between the circularity of a plant and an industrial product is that parts of an already used product could be used again in a similar product to repair a broken product of the same kind or to create a new product (or the same product). In nature, a leaf could not be used again as a leaf; it must decay in order to be reused by the plant, which is a kind of a recycling, a production of secondary materials. In the context of industrial products, a leaf could be used again as a leaf, a concept nature does not foresee.

The advantage of the CER twigs concept is that the resource expenditure for creating functional units is minimised. How does it work and how could it be implemented given that the life cycles of industrial products are complex and that there are various CER twigs that the product or parts of it can go through?

First of all, the possible CER twigs need to be identified and new business models then need to be implemented in order to combine business requirements with environmental (CO2e) calculations. This was done in the aforementioned white goods project for washing machines (see Figure 1).

The model shows several possible CER twigs just for the product ‘washing machine’. The product life in this simple model ends after the use phase with the consumer. In order to become a product usable for the consumer, environmental costs in kg CO2e had to be paid during the production phase.³ Once invested, the environmental costs (environmental spending) for the product remain the same at the end of life of the first use phase by the consumer. If e.g. 100 kg CO2e were paid for a new product, then a big part of this value will remain even in the afterlife of this product. In terms of money, e.g. in euros, the product has virtually no value anymore and consumers might even have to pay to dispose of it. However, this does not affect the invested environmental costs. Nowadays, in the traditional linear model the invested environmental costs are going to be wiped out by the waste management sector by killing every aspect of the functionality of the product and of all parts of it. Although material might be recycled, which is OK, the corresponding CER twig has nothing to do with the original product and is furthermore associated with a lot of entropy. In the CER twigs leading to second-hand machines or leading to the reuse of spare parts in new or in old machines or even in preliminary products, up to 90% of the environmental costs can be saved.⁴ Investing just 10 kg CO2e to get a functional ‘new’ product of a value of 100 kg CO2e is a great environmental win. This win cannot be achieved by the recycling CER twig alone.

³Usually, producers in the EU must arrange life-cycle assessments (LCAs) for each of their products. These LCAs are a good starting point for the environmental costs in kg CO2e of a given product. Unfortunately, the explanatory power of the unit kg CO2e for the real environmental impact does not cover all possible impacts on the environment like ozone depletion, terrestrial ecotoxicity, water consumption or marine eutrophication, amongst others. However, kg CO2e measures this damage indirectly because in all processes, exploiting the environment also causes emissions of CO2, and the avoidance of kg CO2e emissions in particular addresses the main and most important environmental problem: climate change. Therefore, the unit is chosen for the calculation of environmental costs.

⁴In phase 3 of the WeWaWi project, evaluation of the environmental cost savings on the various CER twigs and the total environmental impact of a system change was started. The results will be published at the end of 2023.

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In the aforementioned white goods project for washing machines (washing machines as an example for many industrial products), numerous CER twigs were identified and the authors developed monetarily profitable business models. (Ludwig et al. 2023:58)

These business models must handle large masses, as around 3.5 million washing machines are thrown away each year in Germany alone. This means that for a circular economy the European Union must establish a dismantling industry with a high degree of specialisation. Therefore, the Green Deal implies huge investment in new industries of a kind we have never seen before.

In this respect, dealing with mass flows in a circular economy differs significantly from a technical and organisational perspective from the way mass flows are currently handled in waste management.

A system conversion of today's economies into a circular economy will require a complex system of CER twigs to close as many loops as possible. The task at hand is the organisation of a macroeconomic avoidance of misallocations, respectively the organisation of a correct allocation of products and parts of products in the mass flows of the corresponding CER twigs.

Implementation of a circular economy requires the identification of CER twigs for all products. For some products this is easier than it is for others. Some products must be managed in CER twigs (such as washing machines), while for other products perhaps only their packaging or other products needed to produce and use them have to be managed in CER twigs (e.g. for orange juice).

The main problem with the implementation of a circular economy at present is that we are confronted with products already produced in the past. These products are rarely or not at all designed to be managed in circles. Only recycling, as pointed out before, as one of the many possible CER twigs works (to an extent). This is because recycling is material-related and not product-related. We could set up some additional CER twigs for products that were produced in the past and e.g. repair some washing machines and sell these then on second-hand markets. However, the environmental effects would not be strongly enough related to climate change and the sourcing problem we face. This is because it would not affect the design of new products and would not reduce the number of new products using primary raw materials. We might end up with additional products but we would not reduce the environmental footprint of the industry.

If we want to significantly reduce the climate footprint of an industry the industry needs to produce as many ‘new’ machines as possible by using the whole mix of used spare parts, refurbished preliminary products and recycled materials. (Regenfelder, Slovak 2017) At the same time, the industry must reduce the number of new machines produced using only primary raw materials or new preliminary products. This can only be achieved through intelligent product design. Product design must take into account the use of as many CER twigs as possible. Designing new products merely with a view to the actually less important CER twig ‘recycling’ will slow us down or even restrict us on the path to a circular economy.

Product design must, of course, keep recycling in mind, but must not forget all other possible CER twigs and the design of the required dismantling industry for each CER twig. Producers will have to find ways to integrate the output of the different CER twigs into their new products in such a way that the quality of their products will be as good as if they had used only primary raw materials or preliminary products produced using only primary raw materials.

There will always be traditional waste, but the question is in what quantities and at which point in time? This depends on how successful new CER twigs could be realised as described above and how much of the stream of product parts will be absorbed by them. This is not in the hands of the waste management sector. The waste management sector will be a part of the future circular economy, but its role will be relatively small if the system boundaries remain constant. The waste management sector can handle large mass flows of materials, but the traditional waste management players lack the knowledge required to set up CER twigs. New players will close life cycles and minimise the streams of waste transferred to the waste management sector for recycling, disposal or incineration.

The EU Green Deal brings about a transition period for the economic system. During this period, the waste management sector must continue to handle the waste of yesterday while at the same time organising the treatment of the waste of tomorrow. However, without any knowledge regarding the products of tomorrow, the waste management sector will keep the traditional system running and stick to their ideas to achieve higher recycling rates or better fulfil their clean-up operations. Engagement of the sector is both valuable and helpful and will still be needed for decades to come, but it has nothing to do with circular economy. This is because of the lack of any interaction or cooperation with producers. The PREVENT Waste Alliance created a mapping of digital solutions across the circular economy which showed that so called ‘digital actors in the circular economy’ from all over the world, who are trying to improve circular economy activities, are mainly active in the life cycle of products in the fields of collection and recycling while not a single actor deals with design at all. (Prevent Waste Alliance 2023) Taking this into account, it is to be expected that the waste management sector will not be the driver or even a main player of a future circular economy. This result of the above considerations is in stark contradiction to the political expectations as described above in connection with recycling. To achieve the goals of the Green Deal, politicians need to rethink. And producers, industry and trade must begin to play a much more active role.

It should be mentioned that to change the system, environmental spending for the change needs to be done in an efficient way in order to prevent unnecessary spending. Such spending can easily happen if the focus is on the creation of CER twigs for a certain product or product group while interacting CER twigs of other products are ignored. Therefore, some concomitant research will be needed to avoid such effects and some aspects of this are mentioned here.

Activities and real investment in new industries will depend on the stream volume within any CER twig. Some marketplaces might not be big enough to close loops close by. Therefore, e.g. small islands or regions might have to discuss which kind of investments would be reasonable for them. An island situation, for instance, is different to a highly populated continental setting. Since logistics are costly in terms of both money and environmental costs, it should be discussed which life cycles could be closed within such regions and what do to with the streams that could not be handled close by. This is a technical issue which must be resolved by looking at all aspects of the situation.

Furthermore, waste management needs to be integrated into the life cycles of products. Even the transformation process should consider preserving (saving) as much of the environmental spending already made as possible. Producers of production machines in particular need to look at the older machines they already sold and how these machines could be modified to contribute to a circular economy. This aspect is especially important for the German machine tool industry that serves many customers worldwide and therefore would have a high impact on the world’s future green production. This might include machines for the production of single-use plastic packaging. Avoiding these plastics should not lead to the wiping out of the environmental investment made into the machines, but the machines could be reused for the production of new, environmentally friendly multi-use products.

Producers could also provide a list of components from disposed-of machines that could be used to create totally different machines for totally different products. This is possible because many different products use the same parts. During the coronavirus pandemic, for instance, producers of new products salvaged washing machines to get enough microchips for their own production needs. (Kempf 2022)

Last but not least, the change to a circular economy needs to address the shortage of skilled labour. No change or restructuring will be successful without the people who can do the work. The mobilisation of people with expertise as lateral-entry employees, even on a part-time basis, is one possible solution. Another is the expectation that reducing the production of new machines with primary raw materials could free up a workforce to meet the needs of the system change.

A system change from a linear economy to a circular economy means that invested environmental costs have to be preserved to the greatest extent possible. Therefore, so-called CER twigs must be identified for each product and corresponding business models must be created. The main driver for this change must be the product designer, not the waste management sector. The waste management sector must nevertheless still contribute to a circular economy and adapt to the new system. New industries must be created to handle the processes of the CER twigs. Policymakers must support this development.

1 European Commission (2021): COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS EMPTY - 'Fit for 55': delivering the EU's 2030 Climate Target on the way to climate neutrality. Brussels.

2 European Commission (2019): What is the European Green Deal? Luxembourg Publications Office.

3 Directorate-General for Environment (2023a): Circular economy. (last seen 26 July 2023)

4 Directorate-General for Environment (2023b): Circular economy: Faster progress needed to meet EU resource-efficiency targets, ensure sustainable use of materials and enhance strategic autonomy. (last seen 26 July 2023)

5 Ludwig, Dr Volker, Ebelt, Stefan, Schomerus, Prof Dr Thomas, Lösing, Felix, Alcantara, Helena, Raap, Fabienne (2023): Endbericht - Wiederverwendung von Haushaltsgroßgeräten in Deutschland steigern und neue Wege der Haushaltsgroßgeräte-Sammlung beschreiten mit neuen Geschäftsmodellen zwischen Handel und Werkstätten in Kooperation mit dem Hersteller. PDF here (last seen 26 July 2023)

6 European Parliament (2008): Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives. Brussels.

7 European Parliament (2023): Circular economy: definition, importance and benefits. (last seen 26 July 2023)

8 Franken, Gudrun, Vasters, Jürgen (2000): Aluminium - Informationen zur Nachhaltigkeit (2020). Hannover: Bundesanstalt für Geowissenschaften und Rohstoffe.

9 European Aluminium (2020): EUROPEAN ALUMINIUM | A strategy for achieving aluminium’s full potential for circular economy by 2030. Brussels.

10 Siebel, Thomas (2022): So will die Aluminiumindustrie klimaneutral werden. In: Springer Professional. (last seen 26 July 2023)

11 OECD (2016): Extended Producer Responsibility Updated Guidance for Efficient Waste Management. Paris: OECD Publishing.

12 Regenfelder, Max, Andre P. Slovak (2017): Creating value, not wasting resources: sustainable innovation strategies. In: Innovation: The European Journal of Social Science Research. 30, 4, p. 455 – 475. DOI: 10.1080/13511610.2016.1192990 (last seen 26 July 2023)

13 Prevent Waste Alliance (2023): Digitalization for a Circular Economy, Summary notes of a practitioners’ exchange about digital circular solutions. (last seen 26 July 2023)

14 Kempf, Andreas (2022): Weil Mikro-Chips weiter fehlen, schlachten Unternehmen jetzt schon Waschmaschinen aus. In: Focus Online. (last seen 26 July 2023)