The Circular Economy

Nature is circular. Days and years follow one another in a regular rhythm; on the Earth, water follows its cycle and nurtures life, which is constantly being renewed. Adopting a circular model is thus a way to reconnect with the world, by seeing it more clearly and replacing the traditional vision, which is both limited and costly.
 

What is the circular economy?

The circular economy is about making the products and services we need for our lives in a way that alters natural cycles as little as possible. This primarily entails reducing mining, extending the lifespan of products and, at the end of their useful life, reusing and recycling the raw materials that went into making them.

The idea dates back to the late 1960s, to an insight by Anglo-American economist Kenneth Boulding, but it remained a niche theory for a long time. Since 2010, when the Ellen MacArthur Foundation was set up, the concept has, however, emerged as a mainstream paradigm. Today, the circular economy is at a mature stage, and has fully entered the strategy of the most forward-looking and sustainability-conscious companies.
 

The differences with respect to the linear economy
 

The linear economy is the prevailing model that human economic activities have followed until now. It consists of a sequence of actions with a beginning and an end: the process starts with the use of raw materials to manufacture products or provide services, it then goes through the use phase, and at the end of a product’s useful life, what remains is disposed of as waste.

Our planet's resources are not, however, unlimited: the linear economy model disrupts the natural balance and becomes unsustainable in the long run.

The circular economy, on the other hand, consists of viewing the end as a new beginning, so that the cycle can restart: it’s a model that’s in harmony with the rhythms of nature and respects the environment: it enablessustainable development without time limits.

What are the basic principles?

The basic principles of the circular economy are often summed up as the "3 Rs."
 

• Reduce: Reducing consumption and waste is possible, and is crucial in minimizing the use of raw materials and waste generation. There are countless opportunities, from buying products with higher energy efficiency to using sharing platforms (such as car sharing).

• Recycle: the core of the idea of circularity is to give new life to what seemed destined to end. Recycling the raw materials of an object, machinery or building is the way forward, and it applies at all levels, from the individual bottle to the large factory.

• Reuse: as with recycling, a product that has reached the end of its useful life is not seen as waste, but as a resource. Unlike recycling, reuse concerns not the substances but the products themselves or their components, which can be dismantled and reassembled for other purposes.

In order to give a more comprehensive picture of the circular economy, two more R's were subsequently added:
 

• Regenerate: often all it takes is a small fix to mend a damaged object instead of throwing it away. Sometimes, therefore, this fourth "R" is also defined as "repair," which, however, has a narrower meaning: for example, remanufacturing also concerns a large production plant, which can be modernized by increasing efficiency and durability.

• Rot: composting is a special way of recycling materials, but it introduces a more precise category: while recycling is understood to apply to "dry" waste (plastic, paper, glass and metals), composting concerns organic waste that can be turned into compost and biofuels.

Today we look at the circular economy from a broader perspective: it isn’t a simple sequence of actions, but a philosophy that inspires them. This philosophy implies, for example, the implementation of circular products and services from the design stage onwards. Therefore, an additional "R" can be added, ahead of the others: Rethink.

The benefits

The circular economy has many benefits in terms of environmental, economic and social sustainability:
 

• Environmental impact: the circular economy originated primarily as an approach to eco-sustainability. Reducing resource consumption and waste generation protects the environment, thanks to less dispersion of pollutants but also lower greenhouse gas emissions.
  Renewable energy is also part of this package: as the name implies, in this case it is not products or services but energy sources that are being renewed.

• Economic opportunities: the most immediate economic effect comes in the form of savings. A business or citizen that reuses or regenerates products spends less on purchases.
  In its broadest sense, the circular economy looks at the entire supply chain of products and services from the design phase onwards. This approach results in the creation of new business models and the development of new markets: it leads to new jobs and is a stimulus to innovation, which in turn fosters economic development.

• Social benefits: last but not least, the circular economy benefits all of society for the reasons that have just been outlined. Indeed, economic growth promotes well-being and social cohesion, while a cleaner environment with less waste, fewer landfills, and less pollution leads to improved public health and quality of life for the population.

The 5 pillars of the circular economy

Its paradigm is based on 5 pillars (not to be confused with the "5 R's": the pillars are not individual actions but areas of intervention, which can also overlap):

What institutions do

In order to meet all these challenges with the most suitable strategies, major international organizations have put the circular economy at the center of their agenda.

First and foremost, the United Nations  has emphasized its close links with each of its 17 Sustainable Development Goals (SDGs), and since 2015 it has been working with the Ellen MacArthur Foundation through the United Nations Conference on Trade and Development.

The Organization for Economic Cooperation and Development (OECD) has also launched The Circular Economy in Cities and Regions Program in order to support local governments engaged in the transition to circularity.

Europe is particularly active: in 2015 it launched a Circular Economy Package which identified specific areas for action and key measures to be taken. Furthermore, the European Commission adopted a new Circular Economy Action Plan in 2020, which is considered one of the pillars of the European Green Deal.

Italy has incorporated the European Union’s approach: in Mission 2 "Green Revolution and Ecological Transition," the National Recovery and Resilience Plan (PNRR) allocates €2.1 billion to improving the capacity for efficient and sustainable waste management and the circular economy paradigm. This is in line with the objectives of the European Action Plan. In this way, it was noted, Recovery and Resilience were added to the list of "5 Rs."
 

Our circular economy projects

The Enel Group has embraced the principles of the circular economy since 2015, when the concept began to spread.

In 2017 the Group  was one of the founders of the Alliance for the Circular Economy in Italy, and in 2018 it joined the Ellen MacArthur Foundation. Our approach and initiatives can be found in the Enel Group's Journey to the Circular Economy.

For Enel Green Power, the circular economy is not only an environmentally beneficial approach: it’s also a key strategy for ensuring the sustainability of its operations and improving its market competitiveness.

In addition to the sources that are used for renewable energy, the plants that generate it are also part of our circular vision. When building new power plants, we apply measures to maximize the recycling of waste and the reuse of wastewater or process water with the Sustainable Yards project, while waste materials can be reused to create roads or embankments.

During the useful life of a power plant it may be appropriate (also in terms of technological evolution) to repower the plant itself, through modernization and partial or total replacement of its main components, increasing installed capacity and thus energy production. At the same time, revamping can becarried out in order to extend its useful life: this entails restoring its initial performance by replacing some of its main components.

Once  the plant has reached the end of its useful life, we proceed with sustainable decommissioning. We effectively dismantle it piece by piece. This is in order to encourage the reuse of components in other projects by sending the rest of the materials for recycling, and minimizing the volumes sent for disposal in landfills. In some cases, we then try to give the site a new use, each time choosing the solution best suited to the specific case: possible outcomes range from industrial to recreational tourism uses.

An example of this approach comes in the form of the New Life program, which focuses on the reuse of renewable plant components that have reached end-of-life.

For electric vehicle batteries, second life can become an opportunity to provide services to the Grid or to build storage facilities, which are increasingly crucial for the energy transition: this is the goal of the Pioneer project, which is led by Enel X. Even for electronic meters, a field in which we have historically been a leader, we adopt cutting-edge technologies for component reuse.

These are just a few particularly relevant examples: there’s no limit to the scope of circular economy initiatives. Just as there are many possible circular solutions: sometimes all it takes is a little creativity.

Abolishing the concept of planned obsolescence, reusing tires as recycled rubber for soccer fields, using pallets as elements in urban or outdoor furniture, enhancing the use of food waste to create new bioplastics.

The important thing is to adopt the right mindset: once everyone – from individuals to large companies – has begun to think in a circular way, the sustainable future will finally have arrived.