The booming circular economy

It is no secret that the linear production model we have applied so far, based on extracting, producing, consuming and throwing away, is unsustainable for life on our planet. The industry has long been suffering from the effects of natural resource scarcity and is exponentially increasing its investment in circular economy initiatives.


At our current rate of living, humanity needs 1.75 Earths per year. In other words, we use 75% more resources than our planet can regenerate, thus, for decades, we have been consuming more natural resources than the planet can replenish annually.

In the last 50 years, global use of material resources has almost quadrupled, outpacing population growth. Humans consume about 100 billion tonnes of raw materials per year, such as oil, gas and metals. Yet we reuse barely 9%, with the European Union alone generating more than 2.1 billion tonnes of waste yearly.

The current socio-economic system based on consumerism and a linear production model has its days numbered and can only guarantee its sustainability, both environmentally and economically, by establishing a circular economy system. A responsible and more sustainable production and consumption model must be established so that raw materials remain in the production cycles longer and can be used repeatedly while generating much less waste.

A change of mentality is needed to facilitate a transition towards a model based on reducing, reusing and recycling, instead of producing, using and throwing away. The aim is to achieve maximum development using as few resources as possible and generating minimum costs through a circular economy model.


The industry is taking action

According to a study by the German Federal Environment Ministry and consultancy Roland Berger, the global circular economy market volume generated €148 billion in 2021 and is forecast to grow to €263 billion by 2030, an increase of 78%.

A recently published ABB report entitled ‘Circularity, no time to waste’ reveals that in Spain, 94% of companies in the industrial sector are feeling the effects of the scarcity of natural resources, which has led 58% of them to increase their investment in circular economy initiatives.

Although the perception persists that the adoption of circular production practices entails additional costs, the study points out that their implementation can result in significant cost savings in the long term.

This reluctance to change is mainly because many companies still tend to focus exclusively on upfront capital and operating expenses, without taking into account that the simplified processes inherent in these practices increase efficiency and optimise resources. Thus, reducing waste and operating expenses in the long run.

Even so, the data show that most companies support circularity regulations and that, despite the lack of a standardised approach and the slow adoption of some practices, they will increase their investment over the next three years.


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