The Importance of the Circular Economy in the Industry
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The importance of the circular economy in industry
The global economy faces significant challenges with the scarcity of natural resources, climate change and the need to promote environmental sustainability. In this context, the circular economy is a model of production and consumption that involves the reuse, repair, renovation and recycling of existing materials and products in order to extend the life cycle of products.
The circular economy involves minimising waste and residues, keeping materials within the economy when a product reaches the end of its life cycle. In this way they can be used more than once, which creates more value. It doesn’t just encompass recycling and waste management, as it is a broad concept that includes redesigning processes, products and new business models, and optimising the use of resources. It thus aims to develop new products and services that are economically viable and ecologically efficient.
In this article we discuss the importance of the Circular Economy for companies, and how adapting to this model, which is undoubtedly the economic future at global level, can bring benefits to companies and countries’ economies.
Reduced dependence on imports
Companies can benefit greatly from this model, thanks to the reduction in dependence on raw materials, mitigating the risks associated with supply, such as price volatility, availability and dependence on imports. According to Eurostat, the European Union imports around half of the raw materials it consumes. This is extremely detrimental to companies’ strategies, which encounter unexpected obstacles due to reasons outside the EU, such as political conflicts or transport blockades and accidents.
As the world’s population increases and economies become more standardised in terms of development, countries tend to prioritise the raw material needs of local industries before exporting these materials to other countries. With greater autonomy in the sourcing of raw materials, companies can guarantee sustainable activity, regardless of international political factors.
Improving the competitiveness of the economy
The circular economy is here to stay and the European Union is implementing measures and legislation to encourage and support companies in adopting more sustainable measures. In March 2020 the European Commission presented the Circular Economy Action Plan, in which a resolution was adopted in February 2021 calling for additional measures to achieve a carbon-neutral and fully circular economy by 2050, including mandatory targets for the use and consumption of materials by 2030. In March 2022, the European Commission launched the first package of measures to accelerate the transition to a circular economy.
Companies that keep an eye on these requirements and proactively implement circular economy measures enjoy ‘first mover’ advantages, i.e. they gain competitive advantages ahead of their competitors. All companies will have to adopt more sustainable and circular economy measures in the future, so those that take the first steps now will be ahead of their competition in the future.
Job creation
The transition to a circular economy can also increase competitiveness, stimulate innovation, encourage economic growth and create jobs. According to recent studies and European Union data, the circular economy could contribute to a 0.5 per cent increase in the EU’s GDP and the creation of 700,000 new jobs by 2030. Between 2012 and 2018, the number of jobs related to the circular economy in the EU grew by 5% to around 4 million.
Establishing new relationships with consumers
One of the main factors driving the circular economy is the demands of society in general for sustainability. Individuals are increasingly aware of the impact of industrial activities on the environment, demanding a greener future.
Companies that lead the way in adopting circular economy measures are viewed with more respect, thus developing a more positive image with society in general. In addition, take-back programmes, support for reuse and incentives for repair are excellent ways of developing longer-lasting relationships with customers.
Protecting the environment
One of the main pillars of the circular economy is environmental protection. Any reduction in the consumption of raw materials and the reuse of materials helps to slow down the use of natural resources.
Human activities undoubtedly have an impact on the environment. It is only with a great effort on the part of all members of society that we can protect landscapes, habitats and limit the loss of biodiversity. We, as individuals, are part of the environment, and any impact our activities have on the nature that surrounds us also ends up impacting our lives.
Another benefit of the circular economy is the reduction in greenhouse gas emissions. According to the European Environment Agency, industrial processes are responsible for 9.10 per cent of greenhouse gas emissions in the EU, while waste management accounts for 3.32 per cent of emissions.
The future
The circular economy is not just a passing trend; it is an urgent necessity for the long-term sustainability of global industry. Numerous companies already include sustainability objectives and the adoption of circular economy measures in their medium and long-term plans.
As part of the European Union, industries in Portugal must start adopting these measures in order to contribute to European objectives and follow the current and future legislation that the EU will implement in this area.
At Ruy de Lacerda we are always on the lookout for the future and any changes or innovations that could revolutionise the recycling sector and the circular economy. Sustainability is a concept that has been with us since we were founded, over three generations.
We always aim to support Portuguese entrepreneurs and industries on their journeys and encourage the adoption of more sustainable measures, together with our innovative partners in this field.
By Sabino Borges
