Understanding product circularity as "three-dimensional" could anchor the Circular Economy to common principles while affording its followers flexibility about how to measure it in their specific sectors and disciplines and within their organization's means. Inspired by a heuristic developed for the urban planning profession to cope with the inherent conflicts of Sustainable Development, this article argues that measuring product-level circularity should consider ways to achieve (1) high material recirculation, (2) high utilization, and (3) high endurance in products and service offerings.Achieving all three dimensions ensures that material flowing through the economy is recovered from prior use phases, that it is used intensely, and that it retains its value in spite of exogenous changes. The article argues further that these three dimensions ought to be measured and reported separately rather than as a composite metric and that certain applications will have opportunities to improve circularity through certain dimensions better than others. The article also explains how researchers at RISE (Research Institutes of Sweden AB) are working with industry and government partners to measure the three dimensions and how diverse actors interested in the Circular Economy can use the three dimensions to take the first steps in their transition to circularity.
The circular economy promotes a transition away from linear modes of production and consumption to systems with circular material flows that can significantly improve resource productivity. However, transforming linear business models to circular business models posits a number of financial consequences for product companies as they need to secure more capital in a stock of products that will be rented out over time and therefore will encounter a slower, more volatile cash flow in the short term compared to linear direct sales of products. This paper discusses the role of financial actors in circular business ecosystems and alternative financing solutions when moving from product‐dominant business models to Product‐as‐a‐Service (PaaS) or function‐based business models. Furthermore, the paper demonstrates a solution where state‐of‐the‐art artificial intelligence (AI) modeling can be incorporated for financial risk assessment. We provide an open implementation and a thorough empirical evaluation of an AI‐model, which learns to predict residual value of stocks of used items. Furthermore, the paper highlights solutions, managerial implications, and potentials for financing circular business models, argues the importance of different forms of data in future business ecosystems, and offers recommendations for how AI can help mitigate some of the challenges businesses face as they transition to circular business models.
The plastic industry is facing increasingly growing social and political demands on plastic recycling and reuse. The resource perspective is essential for plastic production companies. Circular economy is one perspective for how industries could deal with a lack of resources today and in the future. However, there are large challenges in the reuse of plastics waste, predominantly due to concern regarding the quality of the waste material. Our paper focuses on the potential of the exchange of plastic material waste between companies in the production process before it enters into the recycling loop. In this study our aim is to investigate if an on-line marketplace is relevant for the plastic industry for this exchange, the market potential and the potential business model and requirements of the marketplace. Through interviews and benchmarking with five platform providers and two plastic manufacturing companies, we collected information on the business models of international digital platforms and plastic manufacturers concerning the exchange of reusable materials between companies. We also collected data through a survey sent out to plastic manufacturers via two industry organizations in Sweden. This paper will present the results from the study and conclude with a description of draft requirements with particular focus on direct reuse of regrind material, and a potential business model for the on-line marketplace that should be run on a commercial basis. This study shows that there are opportunities for the plastic industry to be at the forefront of a circular initiative that could also be utilized by other industries with adjustments to reflect the specific requirements of each industry.
The idea of leveraging the Internet of Things (IoT) to support strategies in line with the circular economy (CE) has been gaining traction in literature. However, previous work has predominantly focused on the opportunities that these technologies can bring, and few studies have critically assessed the environmental viability of the proposed strategies. In this study, we assess the net environmental impact of IoT-enabled circular strategies in the specific case of truck tires in the Swedish context, in order to gain insight into when and how it makes environmental sense to embed IoT hardware into products to support circular strategies. We quantify (1) the potential environmental savings in the different life cycle phases made possible through access to sensor data, and (2) the environmental impact from the added technology needed to provide and process the data. Life cycle assessment (LCA) is used to evaluate the difference in impact between the current state and an ‘IoT scenario’. We find that the IoT scenario gives a 4% lower weighted life cycle impact than the current state. Through sensitivity analysis, we show that the conclusions are sensitive to assumptions made about the expected benefits of adding IoT, which depend on the technological context as well as the current and IoT-induced behavior of stakeholders along the product life cycle. The results are also sensitive to assumptions about the environmental impact of the IoT hardware components, implying that design decisions at this level can be important for ensuring a net environmental impact reduction from IoT-enabled circular strategies.
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