In the analysis of PlasticEurope Outlook, 2018, the development of a circular economy is at the heart of its debate. Economic circulation has become not only a trend of the plastic industry but also of the global economy.
Linear economy vs Circular Economy
Circular economy is the term to call an “closed” economic system of production and supply. It is often represented as a “loop” or a “cycle” instead of the straight line as traditional linear economy. A circular economy is regenerative, retainable in term of all value from products, materials, supplies, parts. Lying on the centre of this concept is “recycling”, all material producted returns to its originial state to generate a new production cycle.
The concept of circular economy is simple. For instance, the plastic container we use today is an example of lineared product. As we consumers purchase the container from the suppliers, we become the owner of the device. We have full right on what to do with it, responsibility on any problem may occur. After one or two years, the container may be broken or simply not satisifed customer’s need anymore, they end up in the landfill. At this stage, there is only a 7% chance of producer excavate them from landfill and transfer them back for recycling.
The line of “TAKE – MAKE – DISPOSE” is what has caused the dilemma of polymer resource exploitation and piling plastic waste we have today. The role of recycling is the responsibility of no body, since producers have no control of the products once they were sold and consumers have no capability of recycling waste.
Those who aims to tackling the problem by shifting the burden around all fail to produce result. The UK government announced to order packaging producers pay for the cost of handling plastic waste but it was met with criticism from both side. Obviously companies will evade financial loss by shifting the cost burden to consumer and raising product price.
The model of circular economy bend that linear direction from the very first stage. Instead of buying the smartphone, consumers simply “hire” them from suppliers, who still have 70% ownership of the products. The suppliers will lease them for customer for lesser price and provide maintainance fee for 10 years ahead. After that ten years, consumers have to return the smartphone, whether it can still be used or not, to the suppliers. This way, the used device will not end up in landfill, they will be returned by default to the hand of the producers, who will recycle them into new products.
From this point, both consumers and producers will be financially benefited. It means less price and none maintainance fee for customer and no loss for producers. The linear economy cannot go on forever, to one point producers will run out of raw resource, recycling is the ultimate solution.
Which companies are commiting for circular economy model?
Leading consumer brands Nestlé, Unilever, Coca-Cola, Nike, Dove along with hundred other global enterprises have shared their view of this economy model which will likely take great changes in 2020.
Nike introduces the model of shoe made from recycled bottles.
The 2015 line of H&M jeans made from recycled cotton.
In the 2018 World Economic Forum, PepsiCo, Nestle, Coca-cola had registered on their partnership with Loop, a delivery companies aiming to reincarnate the Milkman Model in the 1950s. Now, hundred household in the USA simple “borrow” plastic bottles from suppliers for use then return them to Loop, who delivers the bottles back to the factories.