Circular Economy

What is it?

According to the definition of the Ellen MacArthur Foundation, circular economy «is a generic term to define an economy conceived to be able to regenerate itself. In a circular economy, there are two types of material flows: biological, capable of being reintegrated into the biosphere, and technical, destined to be revalued without entering the biosphere.»

Hence the circular economy is a model of production and consumption planned for reusing the materials in successive production cycles, thereby reducing wastes to a minimum. Once the product is no longer useful, the materials it is composed of are reintroduced, wherever possible, into the economic cycle and then reused continually within the production cycle, generating further value.

The principles of the circular economy are in conflict with the traditional linear economic model (take-make-dispose), founded on the peculiar pattern of “extract, product, use and toss”. The traditional economic model depends on the availability of large quantities of low cost materials and energy being readily available.

Hence the need to transition from a linear model to a circular model that, in consideration of all the phases – planning, production, consumption, end-of-life-cycle destination – is capable of embracing every opportunity and limiting the contribution of incoming material and energy incoming and minimizing wastes and losses, focussing attention on the prevention of the negative external environmental effects and the creation of new social and territorial value.

The advantages 

The transition towards a more circular economy can result in numerous advantages, including:

  • Reduction of pressure on the environment
  • More certainty concerning the availability of raw materials
  • Increase in competitiveness
  • Boost to innovation and economic growth
  • Increase in employment – it is estimated that in the EU, thanks to the circular economy, 580,000 new jobs will be created

Basic principles of the circular economy

Circular Economy speaks of an overall and radical rethinking of the classic production model based on hyper-exploitation with the dual objective of increasing profits and reducing production costs.

Technological innovation, environmental sustainability, energy efficiency and the use of renewable energy sources define the circular economy as a new virtuous system founded on some basic principles that the Ellen MacArthur Foundation identified in 5 fundamental criteria:

  1. ECO PLANNING: Planning the products while immediately taking into account their use at the end of their life cycle, therefore with characteristics that enable its disassembly or restructuring.
  2. MODULARITY AND VERSATILITY: Giving priority to modularity, versatility, and adaptability of the product so that this use can be adapted to the change in external conditions.
  3. RENEWABLE ENERGIES: Entrusting energies produced by renewable sources, favouring the rapid abandonment of the energy model founded on fossil fuels.
  4. ECOSYSTEMIC APPROACH: Thinking in a holistic manner, paying attention to the entire system and considering the cause-effect relation between the different components.
  5. SALVAGING OF MATERIALS: Favouring the substitution of the virgin raw materials with secondary raw materials from recovery chains that preserve the qualities.



Over recent years numerous legal provisions have been issued by the European Community, have been incorporated into Italian legislation, and have been enacted in the form of Italian laws.

With the new directive on wastes, the European Community focusses strongly on the <<circular economy and on the concept that someone’s wastes become resources for someone else, unlike the linear economy in which, once consumption has ended, the production cycle also ends, obliging the economic chain to repeat the same pattern: extraction, production, consumption, disposal >>.   

The objective of the waste management policies is that of reissuing the products at the end of their life cycle into the consumption circuit (reuse) or production (recycling), thereby generating value.

On 4 July 2018 the new European legislation known as the ‘Circular Economy Package‘ was enacted and by 5 July 2020 member countries were required to incorporate this law; the law consists of 4 directives that modify another 6 directives on wastes, packaging, landfills, waste electrical and electronic equipment (WEEE), vehicles no longer used and batteries.

In the texts approved, the European Representatives increase the objectives compared to the proposals presented in December 2015 by the European Commission:

  • by 2025 we must achieve recycling of at least 55% of urban wastes (60% by 2030 and 65% by 2035) and disposal in landfills must be limited (maximum level of 10% by 2035);
  • by 2025, 65% of packaging must be recycled, which becomes 70% by 2030;
  • textile wastes and hazardous wastes of families must be collected separately by 2025;
  • by 2024 all member states will be obliged to introduce the separated collection of organic wastes and/or recycling at home through composting;
  • introduction of a law to facilitate food to be donated and reduce excesses and wastes of food in every phase of the food production chain, monitoring the phenomenon with its improvements.

In Italy, with the 2016 stability law, the Environmental Provision (Law n.221 of 28 December 2015) containing provisions on environmental regulations to promote the green economy and sustainable development was enacted; it has enabled the principles of the circular economy to become a part of Italian law and acts broadly on everything regarding the environment, from the managing of wastes to sustainable mobility.




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