WBCSD - Simple Representation of a Circular Value Chain

Figure 1 - Circular Transition Indicators v4.0, WBCSD

In a circular economy, the value of resources and materials is retained by circulating them in the value chain for as long as possible through long life, optimal (re)use, refurbishment, remanufacturing, recycling, and biodegradation. [51]

The entire value chain works together to maximize the value created for every unit of resource. [51] The extraction of non-renewable virgin resources and waste generation are minimized. Additionally, a circular economy prioritizes the use of renewable resources. [45]

The definitions and differences between some of the processes mentioned above are detailed below:

• Reuse
  • It refers to the using again of a product, object or substance that is not waste, in it’s original form and for the same purpose for which it was conceived, without the necessity of repair or refurbishment – according to the Basel Convention. [59] [60]
  • Re-use and re-sell imply a user choice to hand over to another user, most frequently without intermediary and with no modification of the product or service. It applies to the use of second hand products, or product reused after cleaning. [59]
  • Re-use and re-sell can be implemented at little costs, and has strong potential in retaining value of a product or service for a longer time period. [59]
• Repair
  • It refers to the fixing of a specified fault in an object that is a waste or a product and/or replacing defective components, in order to make the waste or product a fully functional product to be used for its originally intended purpose. [61]
  • Repair extends the product lifetime, for example by replacing broken parts, or removing defects. [61]
• Refurbish
  • It refers to the modification of an object that is a waste or a product to increase or restore performance and/ or functionality or to meet applicable technical standards or regulatory requirements, with the result of making a fully functional product to be used for a purpose that is at least the one that was originally intended. The restoration of functionality, but not value, enables a partial new service life for the product. [62]
  • It results in the product being updated to bring it up to date. [63]
• Remanufacture
  • It refers to a standardized industrial process that takes place within industrial or factory settings, in which cores (product or module which has been sold, worn or it is no longer functional) are restored to same-as-new, or better condition and performance. The remanufacturing process is in line with specific technical specifications, including engineering, quality, and testing standards, and typically yields fully warranted products. [64]
  • It implies a product improvement where the full structure of a multi-component product is disassembled, checked, cleaned and when necessary replaced or repaired in an industrial process. [64]
  • It also refers to using parts of a disposed product in a new product with the same function. [65]
• Repurpose
  • It involves reusing discarded goods or components for a different function. [65] This allows the material to get a distinct new life cycle. Converting old or discarded materials into something useful allows to return them into the economy retaining some of its value, if not all its value. [66]
• Recycling
  • It refers to the relevant operations which prevent waste disposal, and allows material to re-enter the loop. [67]
  • Recycling operations usually involves the reprocessing of waste into products, materials or substances, though not necessarily for the original purpose. Recycling does not cover operations that only recover energy from waste (such as incineration of municipal waste). [67]
  • With recycling, the embedded value of a product – the time and energy invested in making it – is lost, but the value of the materials is retained. Recycling means transforming a product or component into its basic materials or substances and reprocessing them into new materials. [60]

UNEP - Circularity Approach Diagram

UNEP Circularity Approach

UNEP’s Circularity Approach provides a more detailed look into the circular economy value chain. It differentiates between 3 different types of value retention loops:

1. User-to-User processes: shorter loop, where a product or component remains close to its user and function. [68]
2. User-to-Business processes: medium/long loop, where a product or component is upgraded and producers involved again. [68]
3. Business-to-Business processes: Long loop, where a product or component loses its original function. [68]

It further groups the processes into 4 different categories, from the most impactful to the least:

1. Reduce by design: An overall guiding principle that is applied in the early stage of design to lead to the design of products and services that are using less materials per unit of production, and/or during their use. [69]