Circular economy (2024)

In simple terms, the circular economy means that products are made from recycled materials, and they are intended to be easily reused or recycled. The circle’s widening in Europe. On the cutting edge of things, you’ll find industrial materials such as concrete, plastic, foam, carbon fibre and even food all beginning to be created using carbon dioxide (CO2) pulled out of the air. The global demand for electric vehicles, meanwhile, is triggering efforts to ensure the circularity of batteries’ most prized ingredient: lithium. Retrieving this component from batteries — although really hard to do — has become a popular investor bet, with VCs funnelling money to Germany’s Cylib and Tozero: two startups promising a second life for short-lived car batteries. London’s Recycleye, meanwhile, is introducing AI to recycling centres to help recoup more valuable stuff from waste, while fellow UK startup Raylo’s approach to the e-waste mountain involves leasing laptops and smartphones to businesses.

The stark truth is that the majority of what we wear ends up in landfills — hence the emergence of some worthy attempts to tackle clothing waste in Europe. Lithuania’s secondhand market Vinted is probably the standout — we all have colleagues who blow a good portion of their pay cheques on this site each month. Smaller efforts include UK’s LØCI, backed by Leonardo DiCaprio, which makes trainers from recycled plastic and Belgium’s Resortecs, which replaces traditional polyester stitching threads in clothes with heat-dissolvable versions — garments that fall apart more easily can be upcycled faster and cheaper.

Circular projects certainly appease the conscience but they also have to make money — and achieving scale in this sector is really hard. Upcycling old things has significant environmental benefits but it’s an expensive and labour-intensive process. The world is on a crooked circularity path with progress not always easy to spot — one organisation, the Circle Economy Foundation, reports that circularity attempts in the world are actually going in reverse, with only 7.2% of materials currently cycled back into the economy — down from 9.1% six years ago. Startups touting the circular way are high risk because they’re often testing complex and unproven business models. Traditional VCs may be hesitant to invest, meaning co-financing arrangements — some blend of private and public funds — aren’t uncommon in this sector.

Things needn't sound too gloomy: plenty of startups are beginning to realise value in used or unwanted goods. A gradual mind shift is happening — today it's wardrobes full of secondhand clothes and the slightly older iPhone in your pocket, tomorrow it’s the CO2-infused peanut butter on your toast.