Circular economy
A circular economy is an economic system that minimizes waste and resource use by keeping products and materials in circulation for as long as possible. It replaces the linear take-make-use-dispose pattern with lifecycle strategies such as durable design, reduced demand, reuse, repair, refurbishment, remanufacturing, sharing, and recycling.
In simple terms
Circularity begins before a product becomes waste and continues across its lifecycle. Products, services, and business models are designed to use fewer finite resources, last longer, be maintained, and move through repeated use cycles. Components and materials are recovered when products can no longer serve their original function. Recycling contributes, but it usually retains less of a product's embedded value than reuse, repair, or remanufacturing.
Why it matters
A circular economy connects product design, consumption, resource security, waste prevention, and ecosystem health. Retaining value can reduce extraction, waste, and pollution while improving resilience to material shortages. Results still depend on safe material choices, energy sources, collection systems, rebound effects, and whether total resource use actually falls.
Example
An equipment company designs a machine for maintenance and disassembly, leases it, retrieves it after use, reuses working components, remanufactures worn modules, and recycles only materials that cannot retain a higher-value function. The service model and reverse logistics create the circular pathway; recycling alone does not.
How it differs
Waste hierarchy
A circular economy is a system-level model for retaining product and material value; the waste hierarchy is a ranked guide for choosing among waste-prevention and waste-management options.