Chapter 4
The Circular Economy: Maintaining and Capturing Value

Circular businesses allow products to stay at their highest level of value for as long as possible.

In the context of the Value Hill (Achterberg et al., 2016), value is added while the product moves “uphill” and circular strategies keep the product at its highest value (top of the hill) for as long as possible.

The path that products take while travelling up and down Value Hill is divided into three phases.

The pre-use phase (mining, production, distribution) is displayed on the left as value is added in every step and the product moves uphill.
The second phase is the in-use phase and is depicted at the top of the hill. Here the value of a product is at its highest.
The third phase is the post-use phase, where the product loses value as it moves downhill.

By feeding the complete product or its components back into a previous phase, value is captured.

Extraction
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In a linear economy, resources are extracted as if there are no limits and economic prosperity is the end goal for many businesses. However, this way of operating does not consider our social and environmental values.
New business models are being invented to optimise these values while maintaining economic viability. This shift in the way we do business is from quantity (selling as many products as possible) to quality (creating a business model around a product’s longevity and closing resource cycles).
- Zero waste in mining
- The economy of scale mining/extraction
- Efficient use of biomass (use mature trees, animals and fish)
Case example
Smart Recycling: Re-mining waste piles for martials
Manufacturing
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Designing products with their end-of-life in mind by minimising resource intensiveness, making them long-lasting and easy to maintain, repair, upgrade, refurbish or remanufacture, and upcycling products, components or materials.
- Reduce material use
- Reduce energy use
- Long lasting products
- Use recycled material
Case example
WE-EF Lighting: Manufacture for component repair and replacement, and end-of-life recycling
Assembly
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Designing products with longevity in mind by easy assembly and part replacement to maintain, repair (i.e. self-repair), upgrade, refurbish, or remanufacture.
- Easy assembly (part replacement by users, e.g. fairphone)
- Remanufacture using old parts – making new furniture using parts of unusable furniture, making pallets from the parts of unusable pallets.
- Part availability
Case example
Jardan: Designing product for assembly and refurbishing:
Retail
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Repair, maintenance, refurbishing services, and parts for easy replacement (e.g. self-repair) are attached to the retailer’s service, and also an offering of products as a service.
- Product stewardship programs to return products after use
- Repair and re-upholstery service for furniture
- Resale of used clothes
Case example
Biersal Brewery: Retail encouraging return and reuse
User
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Products are designed to be long-lasting and are suitable for maintenance and repair, thus slowing resource loops and prolonging the use phase of the product.
By feeding the complete product or its components back into a previous phase (e.g. by providing second-hand products they flow directly back into the use phase), value is retained.
- Buy long-lasting product
- Repair and maintain products – ensure longevity and efficiency of products through routine maintenance, service automobile for efficient running and longevity
- Buy second-hand products – clothes, cars, packaging, furniture
Case example
ReTub: Re-use of product for long-life
Repair
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Repairs maintain and possibly upgrades products that are still in use.
- Repair, re-upholstery and maintenance services for furniture
- Product warranty schemes for electronic goods
- Free service for automobile
Case example
Fortress Resisters: Repair service for customers to maximise length of use
Reuse/redistribute
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Reuse of materials can save costs and service models can deliver new business propositions and revenues.
- Reuse packaging for refill
- Reuse of used products (e.g. clothes, furniture)
- Reuse of pallets and packaging
Case examples
Unpackaged Eco: Refill product containers for continued use
Refurbish
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Ability to revive the product at the user or retailer level by maintaining the overall structure of a large multi-component product intact, components are replaced or repaired, resulting in an overall ‘upgrade’ of the quality of the product.
- Refurbish a broken computer or phone by replacing the corrupt component
- Refurbish furniture by replacing the broken part or re-upholstery
- Refurbish a broken pallet by replacing few of its beams.
Case example
Egans Asset Management: Refurbish used and damaged furniture for re-use
Remanufacture
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Provides products from recaptured materials and components.
- Using broken beams to create pallets
- Using unusable furniture to reconstruct new furniture
- Assembling part of unusable computer to reconstruct a new (used parts) computer
Case example
IM Group: Dismantle batteries to assemble new batteries:
Recycle
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Transforms waste into raw materials.
- Using old glass to manufacture new glass bottles
- Using copper in used wires etc to create new copper goods
- Recycle of unusable clothes to create textile
Case example
Upparel: Recycle end-of-life clothing for materials