A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. Circular economy is presented as a system of resources utilization where reduction, reuse and recycling of elements prevails
In a circular economy, resources are kept in use for as long as possible, maximizing their lifespan (and therefore their value) before the materials are eventually reused and recycled. Unlike the traditional linear economic model in which raw materials are mined, processed to develop a product and then disposed of, a circular economy has several essential benefits such as reducing waste, preserving resources and driving a more sustainable production process. The short-term consumption associated with the linear model contributes to an unsustainable society where materials are used for one purpose and waste is an inevitability. On the other hand, the cyclical nature of the circular economy allows for longer-term growth and maximization of value by using resources more efficiently.
There are ten principles that define how circular economy should work: waste becomes a resource, second use, reuse, reparation, recycle, valorization, functionality economy, energy from renewable sources, eco-design, and industrial and territorial ecology.
In 2019, the European Commission adopted a report on the implementation of the Circular Economy Action Plan, a 54-action package aimed at helping the EU transition to a circular economy. This includes measures such as improved labelling on electrical appliances, encouraging remanufacturing of waste products and economic incentives for innovative product design that enables better recycling opportunities.