Circular Economy Principles

Circular Economy Principles

Circular economy is an economic concept that emphasizes circularity so that the product value chain in the supply chain is continue to be in a circle. Thus the circular economy concept will eliminate waste and pollution. Instead make it an alternative resource that can replace virgin material. Therefore, there are key elements as circular economy principle in order to create circularity in the product value chain in the supply chain. There are at least seven principles as key elements in a circular economy including:

1. Waste elimination

Waste elimination is a circular economy principle that requires the design of the production flow not to produce waste. This principle is carried out even before the production system is run. In other words, this principle seeks to prevent the generation of waste. This is because prevention efforts save production costs more than waste management efforts. An example of an activity that manifests this principle is the design of an environmentally friendly product.

2. Environmental consciousness

The circular economy principle of environmental consciousness emphasizes that the implementation of a circular economy must be based on environmental awareness and efforts to preserve the environment. Without environmental awareness, the policies taken will only benefit one party. An example of the manifestation of the principle of environmental consciousness is the selection of reusable and recycleable materials in product design.

3. Leakage minimization

Leakage minimization is the circular economy principle to minimize leakage in the production line. Then, leakage here is an emissions or pollution produced so that it can disrupt the surrounding ecosystem. The examples of this principle is like the use of electric motors that can reduce carbon emissions. It also like the use of natural pesticides that can minimize water and soil pollution on agricultural land.

4. Maximisation retained value

Furthermore, the principle of maximization retained value means that the production chain must be able to maintain the value of the product as long as possible. Product value that is maintained will create a longer product life cycle. Thus, the longer the product life cycle is created, the greater the profitability obtained. The key to this principle is the selection of durable materials or the management of product materials so that the value they contain can last as long as possible. For example, in agricultural food, stakeholders involved use cold chain management so that agricultural products can last a long time or in electronic materials, companies use durable materials and provide product repair services.

5. Economic optimization

The next circular economy principle is economic optimization. This principle emphasizes maximizing the value of a product so that the value is at its highest. Thus, this principle emphasizes the poor management of materials that only stops at extraction and encourages product diversification. An example of this principle is a biorefinery that tries to convert plant biomass into energy and various by-products so that it has a much higher value than just selling the biomass without processing.

6. Cascade orientation

The sixth circular economy principle is cascade orientation where this principle emphasizes that product materials can continue to be alternative resources for other production chains. This principle is in line with the concept of industrial symbiosis which emphasizes the importance of collaboration between industries to create a closed loop supply chain. Examples of this principle include using leftover building materials as roads, distributing agricultural products in the secondary market, or thrifting trends in the fashion industry.

7. Social responsibility

Finally, the principle of social responsibility is a circular economy principle that requires social activities that involve and have an impact on society. Community involvement in circular economy activities will have positive effects.  For examples, opening up employment opportunities, increasing welfare, and encouraging the acceleration of the transition to a circular economy. Because if the community is not involved, then the idea of a circular economy is difficult to be accepted and supported by the community. For example, the activity of managing food waste as a by-product or opening a repair unit in the electronics industry can absorb more labor.

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