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Understanding Circular Economy
Defining what is circular economy is not easy: many trends are involved under the same concept, and the theoretical framework that’s behind can become, at times, diffuse and poorly delimited. In their 1976 Hannah Reekman research report to the European Commission, "The Potential for Substituting Manpower for Energy", Walter Stahel and Genevieve Reday sketched the vision of an economy in loops (or circular economy) and its impact on job creation, economic competitiveness, resource savings, and waste prevention. The report was published in 1982 as the book Jobs for Tomorrow: The Potential for Substituting Manpower for Energy.

(Source: Ellen Macarthur Foundation)

But if we should explain what circular economy is in a few words, we can say that is the generic term to define a new model that seeks to maintain the materials, products and components in circular processes, through which they can be reintegrated into the value chain after the end of its useful life.

The concept of circular economy is regenerative by definition: the products and processes should be designed with the circular character of the system in mind. In another words, it must always work looking for the minimum value materials lose possible and, at the time, looking for a hypothetical second life of the product. Reuse is the key word.

The final objective of this model is to achieve an economic system in which industrialization takes place under the umbrella of the sustainability and reduction of the environmental footprint. The leitmotiv of circular economy is to maximize the use of resources and minimize the generation of non-usable waste.

Inspired by the mechanisms of natural ecosystems, which manage long-term resources in a continuous process of re-absorption and recycling, the Circular Economy promotes a reorganized economic model through the coordination of production and consumption systems in closed circuits. It is characterized as a dynamic process that requires technical and economic compatibility (capacities and productive activities) but also requires a social and institutional framework (incentives and values).

 (Source: Ellen Macarthur Foundation)

The Circular Economy goes beyond the scope and strict focus of the actions of waste management and recycling, aiming at a broader action, from the redesign of processes, products and new business models to the optimization of resource utilization ("circulating" most of the products, components and materials in technical and / or biological cycles). It aims to develop new economically viable and environmentally efficient products and services based on perpetual cycles or reconversion, from the beginning to the end of the value chain. It deals with minimizing resource extraction, maximizing reuse, increasing efficiency, and developing new business models.