La The circular economy has become a central concept When we talk about sustainability, climate change, and the future of production models, we often use technical vocabulary that can be confusing if you don't understand the basic terminology. Clearly understanding what these terms mean isn't a luxury, but rather an essential condition for designing truly circular policies, products, and services.
This text functions as a expanded glossary on circular economyThis book brings together and clearly reorganizes numerous definitions from specialized references, pioneering projects, and international frameworks. You'll find explanations of general concepts like circular economy and linear economy, as well as more specific terms such as "reverse logistics," "industrial symbiosis," "greenwashing," and "Cradle to Cradle."
What is the circular economy and how does it differ from the linear economy?
La The circular economy is a model of production and consumption It aims to ensure that resources, materials, and products remain in use for as long as possible, preserving their value within the economic system. Instead of extracting, manufacturing, using, and discarding, the goal is to design durable, repairable, reusable, and recyclable products, reducing waste generation to a minimum.
In contrast to this approach, the Linear economy is based on the "take-make-dispose" logicNatural resources are extracted, transformed into goods that are often not fully utilized, and once they are considered obsolete or no longer useful, they are discarded as waste. This system ignores the planet's physical limits and leads to the overexploitation of finite resources and the saturation of landfills and incinerators.
The circular economy is structured around a series of action strategies popularly known as the “R”In addition to the classic three Rs (reduce, reuse, and recycle), broader lists are now used that include: refuse, rethink, repair, renew, remanufacture, repurpose, recover, and redistribute. All of these aim to extend the useful life of products and keep materials in circulation.
This model emphasizes the use of safe, recyclable, renewable and, where possible, biodegradable materialsIt also promotes business models based on sharing or access (servitization) rather than ownership, as well as encouraging repair and upgrading instead of constant replacement.
Basic glossary: from life cycle analysis to renewable energy
One of the pillars of the circular economy is understanding how a product impacts throughout all its stagesThis is where life cycle assessment (LCA) comes into play, which quantifies the environmental impact of a product or service from the extraction of raw materials, through its manufacture, distribution and use, to the end of its useful life and its management as waste or its reintroduction into the production cycle.
This approach is closely linked to the concept of Lifecycle, which describes all the phases a product goes through: raw material extraction, production, distribution, use, maintenance, repair, potential reuse and final treatment (management as waste(recycling, composting, incineration with energy recovery, landfill, etc.). Without this comprehensive view, it is easy to shift impacts from one phase to another without truly solving the problem.
The impact that a product, process, or service has on the environment is captured in the term environmental footprintIt can include variables such as water consumption, greenhouse gas emissions, air and soil pollution, or biodiversity loss. A specific and widespread example is the carbon footprint, which measures the CO₂ equivalent emissions associated with a product, service, company or activity.
To reduce those footprints, the Energy efficiency plays a key roleEnergy efficiency involves reducing energy consumption while maintaining the same level of service or comfort, guaranteeing supply, and simultaneously reducing environmental impact. The opposite is energy inefficiency, which is the excess energy consumed compared to the minimum theoretical amount required for a process or product.
In this context, the following become highly relevant: renewable energyEnergy sources that are not depleted on a human timescale and that regenerate continuously, such as solar, wind, hydroelectric, ocean energy (waves and tides), geothermal, and biogas, are also important. The so-called grey energy, which is the “hidden” energy embedded in a product: all the energy consumed to produce, transport and make it available to the user, even if it is not directly visible. Recycling and recovery in sectors such as solar and wind power help to close these cycles and reduce impacts (recycling in solar and wind energy).
Materials: finite, renewable, virgin and non-virgin
An essential part of circular terminology revolves around the types of materials and their origin. The finite materials These are resources that do not regenerate at a rate relevant to the economy; they are depleted on a human timescale. This category includes metals and minerals, fossil fuels such as oil, natural gas, and coal, as well as sand and other rocks.
On the contrary, renewable materials They are continuously replenished at a rate equal to or greater than the rate at which they are consumed. Some examples are cotton, hemp, corn, wood, wool, leather, certain agricultural byproducts, or even elements like nitrogen, CO₂, or sea salt. To fit into a circular economy, these renewable materials should be produced using regenerative production practicesthat improve soil health, biodiversity, and water and air quality.
Is called virgin material to material that enters the economic cycle for the first timeThat is, it has never been used in previous products. It can be either a finite resource (for example, freshly mined iron ore) or a renewable resource (newly harvested cotton). In contrast, the non-virgin materials These are materials that have already been used in the economy: they can come from reused products, remanufactured components, or recycled materials. They are also called secondary materials.
In practice, when waste is processed to become usable material again, we speak of secondary raw materialThese are recovered materials that replace virgin raw materials in the manufacture of new products, reducing pressure on natural resources and, often, energy consumption.
La biodegradability This is another key concept. A material or compound is biodegradable when it can decompose through the action of living organisms, especially microorganisms, until it transforms into non-polluting substances. There is a difference between abiotic degradation (through physical or chemical processes) and biotic degradation (with the participation of living beings). Almost all organic compounds are biodegradable in the very long term, but the time and conditions required are crucial for assessing their suitability in a circular economy. This is where debates about materials converge. biodegradable and its real contribution to circularity.
Bioplastics, composting and bioeconomy
The Bioplastics are plastics made from plant-based raw materials. or other biological resources, instead of being derived from petroleum. Among their advantages is that, in general, their production generates fewer greenhouse gas emissions. Some bioplastics can also be biodegradable or compostable, although not all are, which often leads to confusion. global growth of bioplastics It is changing the options available in the market.
Conversely, bioplastics often have a significantly higher production cost than conventional plastics. Added to this are criticisms related to the use of agricultural land to grow raw materials for industrial purposes instead of allocating it to food production. The management of its end of life (recycling, industrial compostingetc.) is also a challenge that must be designed from the beginning.
The concept of organic waste management appears in the context of compostingComposting is the microbial decomposition of organic matter in the presence of oxygen. In a circular economy, composting converts food byproducts and other biodegradable materials into compost, which acts as a soil amendment and helps close the nutrient cycle.
All of this falls within the bioeconomyThis initiative promotes the sustainable use of biological resources (biomass, organic waste, crops, etc.) to generate materials, chemicals, fuels, and energy. The goal is to progressively replace fossil resources with renewable biological resources, provided they are managed responsibly and regeneratively.
When we talk about “ecological” materials or “environmentally friendly” processes, we are generally referring to products and activities that have been designed taking into account the protection of naturereducing negative impacts and ensuring responsible resource management.
Environmental impact, emissions and carbon
The term Environmental impact describes the overall footprint left by a processImpact of a product, material, or activity on the environment. It can be positive or negative, although in practice it is mostly used to refer to harmful effects, such as pollution, ecosystem degradation, or contribution to global warming.
In the field of climate, there is increasing talk of carbon neutral or carbon neutrality When a process emits the same amount of carbon dioxide (and often other greenhouse gases) into the atmosphere as it removes or offsets through other means, the net emissions balance is zero, also known as a zero carbon footprint.
To achieve this, many organizations resort to CO₂ emissions offsettingThis involves allocating financial resources to projects that eliminate, capture, or prevent the same amount of CO₂ as has been emitted. The standard unit of exchange is the carbon credit: each credit is equivalent to one ton of CO₂ emitted or absorbed. Thus, a company can calculate its emissions and acquire equivalent credits for reforestation projects, renewable energy initiatives, and so on.
When talking about climate-neutral processes The focus is broadened to include all greenhouse gases (GHGs), not just CO₂. A process is considered climate-neutral if it balances GHG emissions with their removal or offsetting, either directly (through natural or technological sinks) or indirectly (by financing projects that reduce emissions elsewhere).
In this field the term is used compensations or trade-offs This refers to the set of positive actions taken to counteract a negative environmental impact. The risk lies in relying too heavily on these offsets without actually reducing emissions at the source, which can lead to mere image-washing strategies.
Product design: eco-design, Cradle to Cradle and lifecycle
El Eco-design involves integrating environmental criteria from the design phase and product development, with the goal of minimizing impacts throughout its entire life cycle. This includes decisions about materials, manufacturing processes, energy efficiency, ease of repair, modularity, packaging, and logistics, among other aspects.
In this area, the approach stands out. Cradle to CradleUnder this philosophy, products are conceived as sets of nutrients that never become waste. Two main categories are distinguished: biological nutrients, which are biodegradable and can return to natural systems through processes such as composting or anaerobic digestion; and technical nutrients, which are designed to circulate indefinitely in the economy thanks to easy disassembly, reuse, and high-quality recycling.
Associated with these ideas is the Cradle to Cradle certificationIt evaluates products based on criteria such as material health, circularity, clean energy, water management, and social justice. It is a tool to drive design improvements and build market confidence.
The concept of useful life This refers to the period from when a product is launched on the market and begins to be used until it is considered obsolete or no longer adequately fulfills its function. In a circular economy, the aim is to extend this useful life through strategies such as repair, upgrading (renewal), reuse, or remanufacturing.
At the same time, efforts are being made to improve the durabilityDurability, understood as the ability of a product or component to remain functional, safe, and relevant when used as intended. Durability can be physical (resistance to wear and tear), technological (the ability to update software or hardware), or even emotional (the user continuing to find a product appealing, for example, a garment).
Obsolescence, repair and life extension
One of the biggest barriers to circularity is the scheduled obsolescenceThis refers to the deliberate design of products with a limited lifespan. A period is predetermined after which the product will cease to function or become very difficult to repair, with the aim of encouraging new purchases. The classic example is electronic devices, especially mobile phones, designed to be replaced after a few years.
In contrast, the circular economy focuses on products with high repairabilityThat is, ease of repair. This implies the availability of spare parts, repair manuals, modular designs, accessible tools, and reasonable costs. Repairing means restoring a defective product to its original functionality.
There are other complementary strategies, such as renewThis involves restoring a used product and updating it (for example, replacing key components, modernizing the software, or improving efficiency) to extend its lifespan. There is also remanufacturewhich involves using components recovered from discarded products to manufacture new products with the same function as the originals.
When it is decided re-proposal A product is given a completely different use than its original purpose, while retaining some of its components or structure. Typical examples include furniture made from pallets, or a garment transformed into an accessory.
Lastly, re-use This means that a new user takes advantage of a discarded product that is still in good condition and functional, without needing major modifications. This occurs in secondhand markets, peer-to-peer exchanges, or surplus redistribution programs.
The “R’s” of the circular economy: reduce, refuse, rethink and more
The famous three Rs rule has been expanded to include a broader set of linked strategies. Between them, reducir This refers to minimizing the consumption of materials and energy by improving efficiency in manufacturing, use, and logistics. It's about preventing waste from the system's design stage.
The verb to refuse It refers to eliminating unnecessary products, components, or materials, or redefining solutions to achieve the same function with radically different alternatives. For example, foregoing superfluous packaging or replacing a physical product with a digital service.
The strategy of rethink It has to do with using products more intensively, for example, by sharing them. Collaborative economy models, rentals, subscriptions, or pay-per-use are clear examples: they prioritize access to functionality over ownership, thus reducing the need to manufacture so many new products.
In the final stage of the cycle, recycle It consists of processing discarded materials and products to obtain other materials of the same or lower quality, but equally usable. When recycling results in products of lower value or quality, we call it downcyclingWhereas if a product of higher value or quality than the original is obtained, it is known as upcycling or upcycling.
An additional strategy is recoverThis concept is often associated with waste incineration with energy recovery. It is a less desirable option than reuse or recycling, but preferable to landfilling without any recovery.
Reverse logistics, redistribution, and industrial symbiosis
For materials to re-enter the production cycle, it is not enough to design circular products; it is necessary completely rethink the logistics. The reverse logistics It is responsible for organizing the return of products and materials from the point of consumption or final use to the manufacturer, distributor or specialized manager, to enable their recovery, repair, recycling or proper disposal.
More specifically, redistribute This involves diverting a product from its original market to another customer or channel, preventing it from prematurely becoming waste. A typical example is supermarkets donating surplus, still edible food to food banks or other social organizations.
La industrial symbiosis This logic is taken even further: companies from different sectors coordinate so that the waste, byproducts, surplus energy, or services of some become resources for others. In practice, this creates genuine industrial ecosystems where materials, infrastructure, and knowledge are shared, generating cost savings, reducing emissions, and creating local jobs.
In urban environments, this philosophy gives rise to what is called urban miningThe aim is to take advantage of the enormous quantity of valuable materials contained in electronic waste, old buildings, infrastructure, and vehicles. Mobile phones, computers, and other devices contain precious metals such as gold, silver, and copper, which can be recovered with less environmental impact than traditional mining.
In the food sector, concepts such as foodcycle or food waste They focus on food waste: a huge fraction of the food produced is never consumed and ends up as waste. Projects for the recovery, redistribution, and composting of organic waste allow us to close the loop and reduce both the environmental impact and the social injustice related to hunger.
Industry 4.0, traceability and WRAP
The call Industry 4.0, or the fourth industrial revolutionIt combines digitization, advanced automation, the Internet of Things (IoT), artificial intelligence, and 3D printing to radically reorganize production systems. These advances facilitate the relocation of industries, the creation of smart factories and a much more precise and flexible allocation of resources.
In this context, the traceability This becomes fundamental: it consists of being able to trace a product from the origin of its raw materials to its end of life, including all intermediate stages. Thanks to smart labels, sensors, and connected information systems, each item can have a digital identity that helps to better manage it, recover it when it is no longer used, and recycle it properly.
European projects such as the one developed for "smart labeling" aim to every everyday product becomes a smart objectThis facilitates returns, disassembly, and recycling. This information is also key to building consumer trust and combating deceptive practices.
In the field of public policy, programs such as WRAP in the United Kingdom They have been pioneers in promoting the circular economy with a comprehensive approach. Initially created to encourage recycling, it has evolved towards product redesign, waste prevention, and the transformation of consumption habits in sectors such as textiles, food, and electronics.
These types of initiatives show how the collaboration between administrations, businesses and citizens It is essential for the terminology of the circular economy to translate into real and measurable actions on the ground.
Economic models: green, blue, local circularity and servitization
In addition to the circular economy, other related concepts have emerged, such as green economyIt pursues economic development compatible with environmental protection and social justice. It focuses on the responsible use of resources, emissions reduction, and the creation of green jobs, with a strong emphasis on equity and the inclusion of vulnerable groups.
La blue economy It draws inspiration from the functioning of natural ecosystems, especially marine ones, to propose solutions that generate both economic and environmental benefits. It seeks to leverage local resources, minimize waste, and foster innovation based on biomimicry—that is, learning from nature.
La local circularity It refers to the application of circular principles in specific territorial areas: neighborhoods, cities, districts, or regions. It involves adapting strategies to the characteristics and needs of each territory, promoting, for example, local consumption (kilometer zero), local management of organic waste, regional industrial symbiosis, or reuse in social economy networks.
Another key piece is the servitizationThis business model prioritizes service over product. Instead of selling a physical item, it offers access to its function: vehicle rentals, platform subscriptions, or pay-per-use equipment. This approach incentivizes providers to design robust, repairable, and easily upgradeable products, as they retain ownership throughout the product's lifecycle.
These economic transformations are often accompanied by changes in consumption patterns, fostering the responsible consumption: choosing products and services based on real needs, opting for alternatives that promote environmental sustainability and social justice.
Ethics, social responsibility and the risks of greenwashing
The transition to circular models is not just a matter of technology: It has a strong ethical and social dimensionEthics refers to the set of principles and values (justice, honesty, transparency, loyalty, etc.) that guide the behavior of individuals and organizations. In the business world, this translates into responsibility, non-discrimination, decent work, and respect for the environment.
A closely related concept is that of fair tradeIt proposes equitable trade relations, free from labor and child exploitation, with wages that allow for a decent life and with clear environmental criteria. It encompasses economic dimensions (fair price, profit distribution), ethical dimensions (responsibility, transparency), labor dimensions (working conditions), political dimensions (democratic participation), and environmental dimensions (nature protection).
The ISO 26000 offers international guidance on social responsibility in organizations. It is not a certifiable standard like other ISO standards, but it establishes recommendations on how to integrate social responsibility into strategy and daily operations, including environmental, labor, human rights and governance aspects.
In parallel, questionable practices have emerged, such as greenwashingGreenwashing, or greenwashing, involves presenting communication or marketing campaigns that exaggerate or misrepresent the environmental commitment of a company, product, or service. Ambiguous messages or idyllic images are used while the actual change is minimal.
A similar phenomenon is the so-called purpose washing or “purpose laundering,” where companies appropriate discourses about social or environmental purpose to improve their reputation, without a deep and coherent effort behind them. In both cases, the lack of transparency and the absence of verifiable results undermine trust in the circular economy.
Cities, examples and new circular sectors
Several cities have positioned themselves as living laboratories of circular economyA prime example is Amsterdam, which has thoroughly analyzed its energy, water, food, construction, transport, and waste flows to design a circular strategy capable of saving hundreds of thousands of tons of materials. They are experimenting with circular neighborhoods, such as in the Buiksloterham area, and with economic hubs around key infrastructure like airports.
In other territories, projects are being promoted to industrial and territorial symbiosiswhere companies in the same region share byproducts, spaces, or infrastructure, reducing costs and waste. These industrial ecosystems are reminiscent of how natural ecosystems function, in which "one person's waste is another's resource."
The textile sector is also undergoing a profound transformation with the so-called new textile economyThe goal is to redesign fashion to reduce the enormous volume of clothing that ends up in landfills or incinerators. Recycled fabrics, designs made to last, clothing return schemes, and new forms of consumption such as clothing rental are being promoted. These initiatives connect directly with debates about textile waste and its regulation.
In the field of electronic waste, the e-waste management This is a key challenge. Every day, hundreds of thousands of mobile phones and computers are discarded worldwide, generating millions of tons of electronic waste annually. They contain hazardous substances that require very careful handling, but also valuable metals whose recovery opens the door to new urban mining business models.
These experiences demonstrate that Applying circular terminology to practice involves redesigning cities, sectors, and entire value chains.not just optimize small, isolated processes.
Sustainability, zero waste and zero waste
The term sustainable It refers to something that can be sustained long-term without depleting resources or causing serious environmental damage. In economic and social terms, it means meeting current needs without compromising the ability of future generations to meet their own.
Inspired by this idea, the approach of zero wasteTheir goal is not simply to increase recycling, but to fundamentally redesign production and consumption systems so that virtually everything can be reused, repaired, redistributed, or recycled. Burying or incinerating large quantities of waste is considered a system failure.
The zero waste movement emphasizes seeing the waste as a poorly managed resourcethat are waiting to be used in another way. Many cities around the world have set ambitious targets for drastically reducing waste sent to landfills, relying on prevention, reuse, composting, and high-quality recycling.
The success of these strategies depends largely on citizen participation: separation at the source, responsible consumption, rejection of single-use products, and social pressure for companies and institutions to align themselves with these objectives.