There is no shortage of support for the idea of the circular economy, and it is key to avoiding future resource crises, but making it happen will require a strategic approach from government and much greater commitment from businesses. That is the message of the first report of the Circular Economy Task Force, a group of leading businesses and observers that include two government departments and the UK’s foremost business advocates.

The circular economy is no longer about avoiding the problems of waste disposal; it is about ensuring resource security. The work of the task force has shown that environmental damage lies behind restricted availability and fluctuating prices of key materials, which give rise to resource insecurity. Take copper – it is abundant in the earth’s crust but with the easy deposits now dissipated in the stuff around us, new mines need much greater water and energy input for every new tonne won. As a result, copper has seen a doubling of cost for new mining projects over 20 years. Other metals are following the same pattern. Yet although metals are considered ‘easy’ to reuse and recycle, recovery rates rarely venture above 50 per cent, and for the specialist metals are often below one per cent.

Why aren’t circular models common? In terms of capturing value, as well as maximising environmental benefit, reuse and remanufacturing for complex products ought to be the norm – a reused iPhone retains nearly 50 per cent of its value; recycling the precious metals in it recovers just 0.24 per cent of its value. Reuse is also the best way to preserve more specialist metals as they tend to be in very hard-to-separate applications (rare earths are the classic

example), which even the best design for recycling might not ameliorate. However, there appears to be a trade off between value and flexibility: the market for reused phones is valuable, but both demand and supply are uncertain. In contrast, the tiny amounts of gold in mobiles have enduring value that can always be captured through shredding and recycling.

This is recognised by many businesses as not the best circular loop. To do better, companies need to exercise considerable control over supply chains. Those that capture more value create market certainties through long-term contracts for a certain amount of reclaimed product, or joint ventures for collection and remanufacturing or refurbishment. Where this level of control is missing, it takes state intervention in the form of extended producer responsibility legislation to get any decent level of material, and particularly product, recovery – as exemplified by Japan’s appliance laws.

Predictability is even more necessary at the lower-value end of recovery. For many plastics, for instance, despite WRAP’s sterling work over the years, there still isn’t sufficient supply and demand certainty to stimulate the right infrastructure for UK-based circular treatment. This problem is compounded by concerns around material quality. The different actors in the system (producers, collectors, reprocessors, consumers) all want more recycled plastics, but are not joining up and exerting control over supply chains to ensure delivery. The few examples, such as Closed Loop London, serve to demonstrate just how much negotiation and contractual tie-up is needed. On the other hand, they also demonstrate that it is possible. We’re increasingly recognising collaborative approaches as the way forward.

There are limits to what supply chain collaboration alone can deliver. The government could broker more effective cooperation by making circularity a key component of its developing industrial strategy process. Governmental action could also provide a large boost by intervening in the essentials of product design – for instance, by requiring design for disassembly or modularity, or encouraging ‘designing out’ of contaminants that prevent recovery.

As the task force enters its second year, we are much clearer about the problems, but also energised by the possibilities. The circular economy has intrinsic appeal and is gaining more advocates by the day. With a combination of business impetus and government underpinning, the circular economy can become the natural way to do business.

Julie Hill is Chair of the Circular Economy Task Force. 'Resource Resilient UK', the report by Dustin Benton and Jonny Hazel, is published by Green Alliance and is available on www.green-alliance.org.uk