Essentially this means it’s a framework for building an economy that’s regenerative by design. Products are intentionally designed and created so nothing we manufacture, buy or need to discard is lost. Everything is transformed and we reduce our individual consumer footprints as we buy things and in turn, vastly reduce the amount of waste we create. Reduce, Reuse, and Recycle.

Why do we need a circular economy?

In our current economic system, we extract resources from our planet at an ever-increasing pace, and turn them into a product that we mostly dispose of after use. From the perspective of an individual or organisation, that seems efficient. However, zooming out to a global level shows how unsustainable this approach is. In order for those same individuals and organisations to thrive, we need an economic system that operates within our planetary boundaries. A circular economy is one that is waste-free and resilient by design.

Sounds like a great plan doesn’t it? There are however- as with anything- pros and cons. Let’s take a look at what they might be in the heating and Hot Water industry.

The Pros

Environment

During the 20th century, worldwide material consumption increased eight times. By 2050, global resource use is expected to have tripled. As a result the world faces an unprecedented number of environmental challenges. In addition there is a growing challenge that many resources are or will become scarce.

In the last decade, prices for natural resources increased or became more volatile. Thus, more and more businesses are squeezed between rising and less predictable prices in resource markets on the one hand and growing material consumption and high competition on consumer markets on the other. This has a knock on effect to the cost and availability of the products, you, the installer require.

The new concept of circular economy aims to address these issues and environmental impacts.

Spares a plenty

A circular economy will place a focus on access to components for maintenance and replacement. This could improve efficiency and may enable easier servicing and repair for the installer. Previously uneconomical or impractical repairs may now be able to be undertaken, extending appliance lifetime, and avoiding the disruption and expense of a new appliance.

It will change how we consume

Our relationship with the products and services we purchase could be radicalised under a circular economy. What if we didn't buy the goods we use, but instead favoured access and performance over ownership? The 'pay per use' contractual agreements associated with smartphones for example could be extended to standard goods such as washing machines, clothes and DIY equipment. This model would see us become users rather than consumers. Such a shift would not only allow companies to retain product ownership for easier repair, reuse and remanufacture, but might result in producer responsibility obligations being extended to users as part of the purchase agreement.

The Cons

Nothing new

Extending appliance lifetimes will of course hinder the sales of replacement products. This could be seen as a negative if not outweighed by the opportunities provided by a circular economy. After all what would be the point of damaging the very economy we are trying to protect.

There would also undoubtedly be an impact on innovation due to the need for new products reducing and the ability to retrofit existing products may make the innovation impractical. If improved efficiencies cannot be realised through innovation, could this outweigh the environmental savings of the circular economy? This alternative argument would however see the carbon and energy savings of not manufacturing a new appliance to replace the outgoing one.

Mounting pressure

The burden on UK manufacturers grows year on year. This framework could be seen as yet another burden on manufacturers, in terms of design, logistics, growth and disposal or recycling of waste. There may also be a limited market for re-use of some materials.

There will undoubtedly be increased pressure on installers. They will need to have the skills to replace all the component parts of an appliance or similar, by breaking it down to various materials and components. This may be supported or mandated by related standards and/or legislation in turn creating further training needs, meaning more time away from the day to day.

Quality matters

Certain materials have a limited life-cycle. Some plastics can become brittle if recycled too many times. There will also be an increased strain on component parts if they are repeatedly accessed. Whatever the benefits of the circular economy, there is a need to ensure this doesn’t jeopardise quality.

More skills please

Making the transition to a circular economy will be complex as it requires systems-level redesign and a pressing need for new skills, not just within the STEM (Science, Technology, Engineering, Maths) subjects, but across the creative disciplines of design, advertising and digital. At a higher level, systems thinking and modelling is likely to come to the fore to help build the right frameworks and guide behavior change.

Scaling up to an international level will likely require government support. A co-ordinated approach by world leaders to introduce positive legislative drivers such as waste prevention targets and incentives around eco-design to promote products that are easier to reuse, remanufacture and disassemble would be welcomed. Some countries are already starting to act – China has set up CACE, a government-backed association to encourage circular growth while Scotland has issued its own circular economy blueprint. In a highly significant move the European Commission's circular economy framework, released in December 2015, proposed a common EU target for recycling 65% of municipal waste. 

Although there is very little detail on how this may be achieved at this stage it’s certainly a good place to start. However, no single piece of legislation - from the EU or member states - could ever deliver such an all-embracing concept as the circular economy. The necessary changes in mind-set will inevitably take time. The circular economy will require businesses, communities, governments, families and individuals to envisage and enact new ways of living, working, communicating and consuming.

Designing an economy that is restorative, innovative, and effective is a bold challenge. But one that is achievable when guided by the principles of the circular economy.

Ends

For further information contact Laurah on 01926 513743 or email laurah@eua.org.uk