Traditional linear value chain can be captured within three words: take, make and dispose.
Circular economy aims to minimize adverse environmental impacts. Present economic model based on large quantities of cheap easily accessible materials and energy. It is not sustainable model and it is reaching its physical limits. A circular economy is restorative and regenerative by design. The aim of this model is to keep materials, products, and components constantly available at their highest utility and value. At present there are separated cycles for biological and technical process. The circular economy tries to find the method to connect them to one continuous, positive development cycle. It optimizes resource consumption, minimize system risks and support renewable flows. (Ellen MacArthur foundation 2017 a.) The circular economy has three main principles. In a true circular economy, the consumption is based on only effective bio-cycles. There are resources regenerated in the bio-cycle or recovered and restored in the technical cycle. Three circular economy phases addressing several of the resource and system challenges that industrial economies faces. The first is preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows. This first principle tries to achieve dematerializing. The idea is that there should be utilize virtual delivering whenever possible. If there is the demand to utilize re-sources the circular system selects them wisely and chooses technologies and processes that use renewable or better-performing resources. It also encourages nutrient flows within the system and creates the conditions for regeneration. The second principle of circular economy is to optimize resource utilizing by circulating materials, product, and components with high-est performance in technical and biological cycles. The idea is to keep materials and com-ponents in circulation by designing for remanufacturing, refurbishing, and recycling. The circular systems use tighter inner loops, keep product loop speed lower and increasing prod-uct utilization. They also maximize use of end-of-use bio-based materials, extracting valua-ble bio-chemical feedstock and leads them into different, increasingly low-grade applica-tions. The third principle is to promote system effectiveness by revealing and designing out negative externalities. This means reduction of damages to land use, air, water and noise
pollution, release of toxic substances and climate change. It also includes damages to human utility, such as food, mobility and health. (Ellen MacArthur foundation 2017 b.)
The circular economy has some characteristics. The aim is to design out waste. It does not exist when the products biological and technical components are designed by intention to fit it within a biological and technical materials cycle. Using biological materials within mate-rial circles, there are not toxic compounds and they are possible to compost. Matemate-rials from a technical cycle, such as polymers and other man-made compounds are possible to use again with minimal energy and highest quality retention. There should be also built resiliency through diversity. It needs balancing between efficiency and resiliency on circulate. The systems should be run on used renewable energy. Fossil fuels that are used, for example, in fertilizers, machinery, processing and through the supply chain, such as transportation and delivery, should be replaced. There will be used biological materials that value will be ex-tracted to additional value from products and materials by moving them through other appli-cations. (Ellen MacArthur foundation 2017 c.)
A circular economy will be illustrated by the system diagram that contains principles 1–3.
There is also a continuous flow of technical and biological materials through the value chain.
The circular economy seeks to rebuild all capital types: financial, manufactured, human, social and natural.
Figure 8. Circular economy system diagram (Ellen MacArthur Foundation 2017 d).
Biological material flow is presented in the green circle and technical material flow in blue.
Both circles aim to a balance between nature. The circular economy imitates natural circles from nature. For instance, a food chain is a good example that presents biological mecha-nisms. There is a resource such as a plant. An insect eats that plant and a bird eats the insect.
A beast eats that bird and when the beast dies it returns as nutrient to nature. Humans is higher in the food chain and has made their own circles. Now the business tries to go back to the natural circle where the environment and sustainability is taken into account in design, business models and end-of-use phases. In a design stage companies that comply with prin-ciples of circular economy should build its core competencies to facilitate product reuse, recycling and cascading. Companies should concentrate in material selection, standardized components, designed-to-last products, design for easy end-of-life sorting, separation or re-use of products and materials, as well as design-for-manufacturing criteria that take into account possible useful applications of by-products and wastes. New business models should
shift a circular economy requires innovative business models replacing existing ones or oc-cupying new opportunities. Companies that have significant market share can acquire circu-lar economy methods within their business, but also driving circucircu-larity into the mainstream.
The circular economy includes reverse cycles that considers delivery chain logistics, sorting, warehousing, risk management, power generation and even molecular biology and polymer chemistry. Material leakages out of the system will decrease with cost-efficient, better-qual-ity collection and treatment systems. (Ellen MacArthur foundation 2017 e.)
The European Commission presented its new legislative proposal on a full economic cycle in December 2014. It contains circular economy principles with waste reduction targets, wa-ter reuse and resource efficiency. It reports on the delivery and progress of key initiatives of its 2015 Action Plan. It has implementation guidelines for a Circular Economy Package.
Along with the European Investment Bank (EIB), the European Commission bring together investors and innovators aiming them for, instance, to converting waste to energy and reduc-ing certain hazardous substances in electrical and electronical equipment. The European Commission has key initiatives also for 2017. Now it targets a strategy for plastics in the circular economy, an assessment of options for the improved interface between chemicals, products and waste legislation. It has also a legislative proposal on water reuse and monitor-ing framework on circular economy. (European Commission 2017.)
All targets based on the goal to close the loop of product life cycles. It aims towards greater recycling and re-use. The Circular Economy Package stimulates Europe’s transition towards a circular economy. It will bring benefits for both the environment and the economy. The package will boost Europe’s global competitiveness, promote sustainable economic growth and in addition generate new jobs. An EU Action Plan for the Circular Economy consists of the whole life cycle, such as production and consumption of products to waste management and the market for secondary raw materials. The package also has targets for waste reduction and establish an ambitious and credible long-term path for waste management and recycling.
The legislative proposal on waste can be summarized in some bullets:
A common EU target for recycling 65 % of municipal waste by 2030;
A common EU target for recycling 75 % of packaging waste by 2030;
A binding landfill target to reduce landfill to maximum of 10 % of municipal waste by 2030;
A ban on landfilling of separately collected waste;
Promotion of economic instruments to discourage landfilling;
Simplified and improved definitions and harmonized calculation methods for recy-cling rates throughout the EU;
Concrete measures to promote re-use and stimulate industrial symbiosis, An idea is turning one industry's by-product into another industry's raw material;
Economic incentives for producers to put greener products on the market and support recovery and recycling schemes.
The circular economy offers benefits for economy making it more sustainable and competi-tive. Those changes will be increase European business, industries an also its citizens alike.
Achieving all principles of circular economy, the member nations should increase measure-ments to cut resource use, waste reduction and recycling boosts. (European Commission 2017.)
What does the circular economy means in global companies? Business or operations should have a target to keep products, components and materials in continuous cycle instead of disposing them. There will be developed for example technologies and services for the cus-tomer converting renewable resources into sustainable products. The value chain may con-sist renewable material flows that are a part of biological circle and non-renewable material flows that are a part of technical circle. If a company designs, manufactures and supplies technologies and services, it will utilize resources in its circular economy by offering tech-nologies and services for its customers. After customers’ product consume there follow col-lection phase. The company will offer its customers efficient production with renewable and non-renewable resources and maintenance services. Reuse or refurbish services and recy-cling are after consumption of product. All collecting material and reusable products can be utilized in the company’s other value chains or other business chains.
Technologies will be developed that help customers to improve and optimize their resource efficiency. For example, advanced automation and intelligent machines reduce use of re-source, as well as water and energy consumption. They will allow circulation of materials within customers’ production processes longer as usual. They will also decrease need for virgin materials in the processes. There are four main circular economy themes from cus-tomers’ perspective: resource efficiency, closed circles, longer circulation and cascaded use across industries. (Ellen MacArthur foundation 2017 d.) The companies can offer resource efficiency designed and manufactured technologies and products improving and optimizing
of resource efficiency. They will also develop technologies for flexible energy production.
Chemical and energy recovery based on closed circles in the value chain. Well-designed products enable reuse and conversion and active maintenance service and modernization of production technologies make the circulation longer. The value chains’ new bio-based prod-ucts cascade use across industries. The circular economy is not only for offered technologies and products. It implements the circular economy in companies’ own operations by contin-uously improving resource efficiency and also maximizes utilization of raw materials, uses a resource efficient supply chain, shared use of belongings and preventive maintenance.
3 THE MAIN ENVIRONMENTAL STANDARDS FOR ASSESSMENT PROCEDURES
There are different standards in use that guide the procedures of environmental aspect and impact assessment. ISO 14001:2015 has been used as the main standard and numerous other standards to support the developing of a usable assessment tool.