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Glossary: Defining the Terms of the Circular Economy

It is time to contemplate the definitions of some increasingly important terms as industries come to grips with the new reality of the circular economy.

Dan Carney

November 17, 2021

4 Min Read
Matt Seymour via Unsplash

Global industries are facing the realities of needing to reduce their consumption -- of energy and materials -- and their production -- of carbon dioxide and solid waste. A core component of achieving these goals is to connect consumption and production in a continuous loop, with industries recovering and re-using the material in products to make new products.

This is the fundamental tenant of the “circular” economy, a configuration that will steer exhausted goods out of the disposal stream and back into the production stream. This process encompasses a variety of activities, which have been thoughtfully defined for us by the Ellen MacArthur Foundation. The foundation is dedicated to accelerating the transition to a circular economy by working with business, academia, government, and institutions to promote global solutions.

These important terms include:

  • Circular Economy: A systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution. It is based on three principles that are driven by design; elimination of waste and pollution, circulation of products and material, and regeneration of nature.

  • Durability: The ability of a product, component, or material to remain functional and relevant when used as intended.

  • Finite Materials: Materials that are non-renewable on timescales relevant to the economy (not geological timescales). Examples include metal and minerals, fossil forms of carbon, sand, rocks, and stones.

  • Lifespan: The period of time from when a product is released for use after manufacture to the moment it becomes obsolete beyond recovery at the product level.

  • Linear Economy: An economy in which finite resources are extracted to make products that are used - generally not to their full potential - and then thrown away ('take-make-waste').

  • Non-Virgin Materials: Materials that have been previously used. This includes materials in products that have been reused, refurbished, or repaired; components that have been remanufactured; and materials that have been recycled. These are also referred to as secondary materials.

  • Recycle: Transforming a product or component into its basic materials or substances and reprocessing them into new materials. Embedded energy and value are lost in the process. In a circular economy, recycling is the last resort action.

  • Redistribute: Divert a product from its intended market to another customer so it is used at high value instead of becoming waste. For example, a supermarket can redistribute surplus edible food to a food bank.

  • Refurbish: Return a product to good working order. This can include repairing or replacing components, updating specifications, and improving cosmetic appearance.

  • Remanufacture: Re-engineer products and components to as-new condition with the same, or improved, level of performance as a newly manufactured one.

  • Renewable Energy: Energy derived from resources that are not depleted on timescales relevant to the economy, i.e. not geological timescales. Examples include wind, solar, hydropower, hydrothermal, ocean (wave and tidal), geothermal, and biogas from anaerobic digestion.

  • Renewable Materials: Materials that are continually replenished at a rate equal to or greater than the rate of depletion. Examples include cotton, hemp, maize, wood, wool, leather, agricultural by-products, nitrogen, carbon dioxide, and sea salt.

  • Repair: Operation by which a faulty or broken product or component is returned back to a usable state to fulfill its intended use.

  • Reuse: The repeated use of a product or component for its intended purpose without significant modification. Small adjustments and cleaning of the component or product may be necessary to prepare for the next use.

  • Reverse Logistics: Supply chains dedicated to the reverse flow of products and materials for the purpose of maintenance, repair, reuse, refurbishment, remanufacture, recycling, or regenerating natural systems.

  • Sharing: The use of a product by multiple users. It is a practice that retains the highest value of a product by extending its use period.

  • Technical Cycle: The processes that products and materials flow through in order to maintain their highest possible value at all times. Materials suitable for these processes are those that are not consumed during use - such as metals, plastics, and wood. In the technical cycle, the opportunities to maintain and generate value come through retaining the greatest proportion of the energy and labor embedded in the product. 

  • Virgin Materials: Materials that have not yet been used in the economy. These include both finite materials such as iron ore mined from the ground and renewable resources like newly produced cotton.


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