X-MINING What is a Circular Economy? Introducing Challenges and Efforts Towards Realization

A circular economy is an economic model that aims to efficiently reuse resources and maximize their value, as an alternative to the traditional Linear Economic Model, which is characterized by mass production, consumption, and waste.

You might have heard of the term “circular economy” but wonder what it exactly entails or what we can do to contribute to it.

This article will introduce the definition of a circular economy, why it’s gaining attention, and its benefits, especially for businesses. Please take a look.

A circular economy, also known as a recycling economy, emphasizes the efficient use of resources and minimizing waste. Unlike the traditional model that follows a straight path from resource extraction to product manufacturing and disposal, the circular economy seeks to extend product lifespans and promote reuse and recycling, thus making the most out of resources and reducing waste.

Below, we will explain in detail what a circular economy is and how it differs from a linear economy.

Definition of a Circular Economy

According to the Ministry of the Environment, a circular economy is defined as an economic activity that, in addition to the traditional 3Rs (reduce, reuse, recycle) aims to minimize resource input and consumption while maximizing the use of existing stock through service innovation and value creation. This approach seeks to maximize the value of resources and products, minimize resource consumption, and prevent waste generation.

Reference: What is a circular economy?｜The Ellen MacArthur Foundation

Difference from Linear Economy

The linear economy, based on the logic of mass production, consumption, and disposal, is characterized by a one-way flow of extracting raw materials, producing products, and disposing of them as waste. This linear model has contributed to resource depletion, environmental pollution, and significant waste management challenges.

In contrast, the circular economy is becoming a global trend amid growing environmental concerns. Transitioning from a linear to a circular economy is essential for building a sustainable future.

The circular economy was developed to address the issues of the linear economy. The Ellen MacArthur Foundation outlines three principles for promoting a circular economy: eliminate waste and pollution, circulate products and materials at their highest value, and regenerate nature.

Reference: What is a circular economy?｜The Ellen MacArthur Foundation

These principles guide the circular economy towards efficient resource use and sustainable economic activities, reducing environmental impact.

Here, we also delve into similar concepts such as the 3Rs, the sharing economy, and the Sustainable Development Goals (SDGs).

3Rs (Reduce, Reuse, Recycle)

The 3Rs represent a basic approach to reducing waste.

They encourage reducing unnecessary product and resource usage, reusing products and resources, and recycling waste into new products or resources. These practices contribute to environmental protection and sustainable development at various levels, from individuals to businesses and communities.

Sharing Economy

The sharing economy has emerged in various fields, facilitated by advancements in IT. It uses online platforms to enable individuals to share assets and skills, promoting economic revitalization. In Japan’s aging society, the sharing economy plays a crucial role in efficient resource use and addressing societal challenges, promising significant future social and economic development.

SDGs

While the circular economy and the Sustainable Development Goals (SDGs) are distinct concepts, they are closely related. The SDGs provide a comprehensive framework for sustainable development by 2030, while the circular economy focuses on efficient resource use and waste reduction to achieve a sustainable economy.

To address resource scarcity

Resource scarcity is not only an environmental issue but also a global concern. According to the OECD (Organization for Economic Co-operation and Development), global resource consumption is expected to double from current levels, potentially leading to increased environmental impact, rising resource prices, and international conflicts.
The circular economy concept is gaining attention as an effective means to promote resource reuse and minimize waste, addressing these issues.

As a response to climate change caused by global warming

A report by the Ellen MacArthur Foundation states that while traditional climate change measures have focused primarily on renewable energy and energy efficiency, these efforts alone cannot address 55% of total greenhouse gas emissions. It suggests that we need to tackle the remaining 45% of emissions reduction.
Implementing a circular economy is effective for this remaining 45%. Specifically, adopting circular economy strategies for major industrial materials such as cement, steel, plastics, and aluminum could reduce greenhouse gas emissions by 40% by 2050.

We will explain the challenges identified towards realizing a circular economy.

Technological development for efficient resource circulation

According to the National Institute of Advanced Industrial Science and Technology (AIST), research and development are being conducted to realize a circular economy. As part of this, they have announced a focus on two themes: “material recycling” and “chemical recycling.”
Material recycling (from product to product reuse) focuses on the recycling of metal resources. For about a decade, a community of researchers related to material recycling has been formed, working on technological development for metal resource recycling in collaboration with the industry.
On the other hand, chemical recycling focuses on technologies that break down resources chemically to reuse them as raw materials. Plastic recycling is particularly emphasized. Although Japan has a high collection rate for waste plastics, the current mainstream is energy recovery, which has not been sufficiently improved. Therefore, research is being conducted on technologies to decompose plastics into monomers, their smallest units, and reuse them as recycled raw materials. F

System design and indicator development for establishing a resource-circulating society

System design and evaluation technology are crucial for realizing a circular economy. Additionally, to promote the adoption of a circular economy, it is essential to demonstrate its economic aspects and social acceptability.
However, previous research and development have focused on individual technologies, lacking comprehensive system design and economic evaluation. Thus, while the necessity of a circular economy has permeated society, overall indicators and guidelines for the circular economy are still not well-established.

System Design and Indicator Development for a Resource-Circulating Society

System design and evaluation technology are crucial for realizing a circular economy. Additionally, to promote the adoption of a circular economy, it is essential to demonstrate its economic aspects and social acceptability.

However, previous research and development have focused on individual technologies, lacking comprehensive system design and economic evaluation. Thus, while the necessity of a circular economy has permeated society, overall indicators and guidelines for the circular economy are still not well-established.

For example, investing a large amount of energy or funds to increase the recycling rate of a specific resource does not necessarily mean it is sustainable. A proper overall evaluation is needed. Efforts are being made in this area, including by AIST.

Benefits for Businesses Engaging in Circular Economy

So far, we have introduced what a circular economy is and the efforts being made towards it. Below, we introduce the benefits for companies engaging in a circular economy.
The value of products and services is maximized throughout the process from production to delivery to consumers. By maximizing the utilization and operation rate of equipment and facilities, production capacity is maximized. Even used products can maximize their value. The use of resources is minimized, and the generation of waste is reduced. Revising manufacturing processes and reusing resources bring many benefits. Furthermore, it becomes less susceptible to the effects of price increases due to resource shortages. Establishing a circular economic system enables stable resource procurement.

In Japan, the Basic Act for Establishing a Recycling-based Society was enacted in 2000. In addition to revising the Waste Disposal Law, the foundation for waste and recycling policies has been established with the enactment of the Basic Act.
In May 2020, the Ministry of Economy, Trade and Industry formulated the “Circular Economy Vision 2020.” This vision indicates a transition from the traditional 3R economic activities to a circular economy, aiming to build a sustainable economic model.
Furthermore, in March 2021, the Ministry of Economy, Trade and Industry, the Ministry of the Environment, and Keidanren established the “Circular Economy Partnership (J4CE).” The purpose is to deepen the understanding of the circular economy among domestic companies and strengthen public-private partnerships.
The “Act on Promotion of Resource Circulation for Plastics,” enacted in April 2022, is still fresh in our memory. The goal is to promote a circular economy through collaboration among local governments, businesses, and consumers throughout the process from the design to the sale of plastic products. Efficient use and reuse of plastic resources are encouraged, expected to reduce environmental impact.

Sumitomo Metal Mining is advancing contributions towards realizing a circular economy through “efficient utilization of non-ferrous metal resources” and “supply of low-carbon products.”

When producing high-functionality materials from the mining of natural resources, “non-ferrous metal materials” are generated. However, there have been technological challenges in utilizing these resources. By working on the utilization and recycling technology development of such resources, we can provide high-functionality materials aimed at solving social issues. Especially for batteries (cathode materials), whose demand is increasing with the electronization of various devices, stable supply in the future is possible by skillfully utilizing “low-nickel content oxide ores,” among others.

Regarding the supply of low-carbon products, we contribute to the global effort of “reducing greenhouse gas emissions.” By using these products, we can extend their lifespan, promote recycling and reuse, and achieve greater resource efficiency. Furthermore, greenhouse gas emissions reduction is promoted at the production stage of Sumitomo Metal Mining’s products, reducing environmental impact.

Thus, various efforts are being made towards realizing a circular economy from different angles.

The circular economy aims to maximize resource utilization and minimize waste. Unlike the traditional linear model, it reduces environmental impact through waste reduction, reuse, and recycling. Sumitomo Metal Mining, with its expertise in recycling and resource circulation, is poised to drive further innovation and promote the advancement of a circular economy.

Sumitomo Metal Mining has extensive experience and technology in recycling and resource circulation, enabling further innovation and promotion of a circular economy through collaboration with companies. Utilizing our expertise, we can work on building sustainable business models and improving product sustainability.