What challenges arise in the adoption of circular economy?

There is a  wide range of potential benefits, clearer regulations, policies, as well as urgency (see article "How companies benefit from circular economy"). Still, the question arises why we are not seeing faster adoption and accelerated transition toward the circular economy. The 2023 Circularity Gap report [1] shows that material use and carbon emissions continue to grow and merely 7.2% of the global economy is circular.

Lack of transparency as a barrier of circular economy

The complexity and cost of administration and regulatory compliance as well as the lack of human resources are all perceived as significant challenges by European SMEs engaging in circular economy activities [2]. Further impediments include the lack of definitions and standards, missing enforcement by authorities, and unharmonized legislation [3]. A multi-stakeholder Workshop on International Trade and Circular Economy hosted by the OECD [4] similarly concluded that the main barriers to circular economy working at scale relate to the lack of transparency and data sharing, and standardization of data and processes, which are required to make informed decisions on product design, production, reuse, and recycling.

To the extent that they are a barrier to the circular economy, there are information gaps that need to be overcome to further develop and spread the circular economy [5].

Many of the substances in plastic are concerning

A study by ETH Zurich [6] has found that more than 10,000 substances are used in plastics worldwide, with more than 2,400 being substances of potential concern. These findings were disproportionally higher than previous assessments. This underestimation, according to the authors, is likely due to a lack of transparency regarding substances in plastics, data not being freely accessible or easily processable, and the possibility that substances are being unintentionally added to plastics.

The recommendation from this study is to establish a ‘‘centralized knowledge base’’ accessible to all actors along the supply chain to act as a basis for reducing the impact of harmful substances in products and support the transition of the plastics industry to more circular approaches.

Reference:

[1]: The Circularity Gap Report 2023

[2]: Barriers to the circular economy in European small and medium-sized firms

[3]: Climbing up the circularity ladder? – A mixed-methods analysis of circular economy in business practice

[4]: International Trade and the Circular Economy

[5]: The Digital Circular Economy: Can the Digital Transformation Pave the Way for Resource-Efficient Materials Cycles?

[6]: Deep Dive into Plastic Monomers, Additives, and Processing Aids