Companies should shift to “resourcing” from “recycling” and make sure to integrate circularity strategies into their business value chains if they aim to comply with the European Union’s stringent circular economy (CE) policy, according to an international circularity expert.
Kazunori Kitagawa, chief of the Eco-Management Center of the Japan Productivity Center, identified two key trends in the EU’s circular economy plan that he urged enterprises with business ties to Europe to keep up with.
One of these is the move from recycling to resourcing, in which products cannot be distributed or sold unless recycled materials are used.
“CE emphasizes resourcing over recycling,” Kitagawa said. This entails that products manufactured for use or consumption must undergo material recovery for recycling and waste management. These recycled materials and parts are resourced, either destined for the second raw materials market for manufacturing purposes or reused by the company for remanufacturing or refurbishing.
The other major trend is the integration of circularity strategies into the business value chain, which is part of the EU’s key Sustainable Product Policy or SPP, according to Kitagawa in a recent presentation.
The Sustainable Product Policy—the most important policy of the EU’s CE action plan—seeks to integrate circularity into the business value chain through designing products that are more durable and easy to repair and upgrade, and total life-cycle management.
“Ultimately, companies have a responsibility to build and operate a total value chain management that incorporates product design and life cycle management systems that enable the systematic and continuous use of products and materials,” Kitagawa explained.
He added: “Through these efforts, both arteries and veins of a resource supply chain, which had been divided, will be integrated into the body of the business, making the most of the circular value of products and materials, creating a highly resilient value chain.”
In this way, since supply chain management is changing significantly from the traditional way, tracking has become more important than ever. “This is because tracking data plays an important role in ensuring reliability and safety when circularly using products and materials,” he continued.
These two CE trends are part of the EU’s ultimate objective of “decoupling,” which means creating economic systems that don’t depend on resource consumption and that separate economic growth from resource consumption.
Essentially, absolute decoupling is a “regenerative growth model that gives back to the planet more than it takes,” Kitagawa said.
