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In The Loop: Can The UK Build A Sustainable Circular Economy?

Illustration by Tracy Worrall

7 min read

Moves to the circular economy are gathering pace in the UK. Georgina Bailey explores what this may mean for consumers, businesses and government.

The climate and ecological crisis has changed the way we look at many things: even the simple pleasures in life can be problematic. According to the Spanish food company Gruppo ARCE, a bottle of Verdejo is responsible for about 1.28kg of CO2 emissions. More than two-thirds of those emissions are from packaging and transportation, with 39 per cent coming from the glass bottle alone. 

“The wine industry is more deeply affected by the climate crisis than most, and wine travels globally through complex, modern supply chains,” says Santiago Navarro, the co-founder of Garçon Wines. The problem is not unique to wine, but instead represents what green groups suggest is a wider issue of  overconsumption of natural resources and a lack of wide-spread innovation to address it. 

According to the UN, extracting and processing resources accounts for 90 per cent of biodiversity loss and water stress around the world. If the rest of the world consumed resources at the rate the UK does, three Earths would be needed to supply them. 

Garçon Wines is one of many businesses taking a different approach to the resources it uses, forming part of the so-called “circular economy”. 

“The circular economy is best understood in contrast to the current economy, which is linear,” says Libby Peake, head of resources at the Green Alliance. “In the current economy we take materials out of the ground, we make something out of them, we use them, sometimes very briefly. Then we either send them back to the ground [in landfill], or up in smoke through incineration. There is some recycling, although it isn’t at the level it could be.

“[In] the circular economy, recycling is the final step you want to take. Things are reused in the first instance, then repaired and remanufactured and then once the products themselves can’t be salvaged, you start thinking about recycling the materials that are in them.”

“Everyone’s got a role to play, but [consumers, businesses, and government] reinforce each other"

Patrick Mahon, chief strategic advisor at WRAP

For Garçon Wines, this means using 100 per cent recycled PET (a highly recyclable plastic) to make their bottles, which are lightweight and flat to save space when packaging, shipping and displaying. 

Many believe the government must do more to encourage other businesses to follow suit. 

“Everyone’s got a role to play, but [consumers, businesses, and government] reinforce each other,” says Patrick Mahon, chief strategic advisor at WRAP. He believes the starting point has to be government setting the framework, so a move to the circular economy is “the sensible thing for businesses to do, the thing consumers are encouraged to do”.

So what might the circular economy in the UK look like? Waste experts agree it would involve a certain amount of “choice editing”, with less resource efficient goods being removed from the market, whether through bans or incentives for consumers and businesses.

One element of the government’s Waste Prevention Plan is the Extended Producer Responsibility (EPR) for packaging, currently out for consultation.

The EPR proposals are based on the “polluter pays” principle, with packaging producers, rather than local authorities, made responsible for the full cost of managing packaging waste, at an estimated cost of £2.7bn a year. 

Modulated fees for firms based on the recyclability of packaging would help fund local authorities’ waste management and the upgrade of national recycling infrastructure. Producers would also have to provide “clear and consistent” information, not just on whether packaging is technically recyclable, but if it is widely recycled. 

One aim of these proposals, which should come into force in 2023, is to encourage packaging manufacturers to produce less, or use more environmentally-friendly packaging and to make it easier for consumers to recycle. 

However, Dick Searle, chief executive of the Packaging Federation, believes there is an imbalance in how packaging is treated compared to other polluters. He estimates the total cost of current government proposals to UK producers to be close to £5bn, a cost that the UK industry – with a workforce of 85,000 and sales of £11bn a year – can not afford. 

“The global warming impact of packaging in the food and drink supply chain is three per cent. When are we going to hear something about action on the other 97 per cent?” Searle says. He contends that 85 per cent of the packaging currently on the market is already easily recyclable – and if it isn’t, it is normally to preserve goods. 

“We strongly support the concept of the circular economy; my industry is prepared to play its part in ensuring that works. But I believe it’s a huge sledgehammer to crack a nut,” Searle says of the proposals.

From 2025, the government will look at targets for incentivising the reuse of packaging, and EPR will likely be extended to other products. A consultation on textiles is expected at the end of the year, with the Environmental Audit Committee (EAC) already taking evidence as part of its Fixing Fashion inquiry.

Sustainable fashion trends could provide clear models for the circular economy. A third of UK 18-to-24 year-olds are now registered on clothes reselling platform Depop, and clothing rental company HURR has recently launched a collaboration with Selfridges. A Dutch company, Circos, is modelling how this could work for baby wear and maternity clothes, with users selecting age and size bundles which they then swap out for a new bundle when the child or pregnant woman has outgrown them. 

Mahon and Peake both believe the rental and leasing markets across different sectors will continue to expand. This already includes car-sharing apps, furniture, tools, and electronic goods. Philips has even started offering light as a service: instead of a company buying the light fittings, they sign a contract for the provision of light. This long-life approach means that Philips retains ownership of the light fittings and can repair, refurbish and reuse them. 

Another regulatory model is the use of ecodesign standards. Over the last 15 years, European Union regulations have set minimum design standards for energy efficiency for certain household and industrial appliances, such as light bulbs and vacuum cleaners – “one of the most successful environmental policies ever developed by the EU in terms of reducing emissions, as well as saving money,” Peake says. 

"There needs to be some penalty to the producer if that’s their business model. They need to be designing phones to last 10 years, like you design an automobile"

Philip Dunne MP, chair of the Environmental Audit Committee

The government recently announced it would be adopting new EU regulations on resource efficiency standards for some white goods, TVs and computer monitors. From this summer, manufacturers must ensure that spare parts to repair products are available for at least seven years and easily accessible to a professional repairer – a move that has been widely welcomed.

In its response to the EAC November 2020 report on electronic waste, the government said it was considering extending reparability regulations to other goods, as well as the possibility of modular reparability, where products can be easily broken down into parts which are then repaired, replaced or upgraded as needed. It could also require product labels to include reparability ratings and product lifetime information.

Philip Dunne, chair of EAC, would also like to see co-ordinated action from international governments to tackle in-built obsolescence of goods by worldwide technology firms.

“It’s very much the Apple modus operandi: a minor improvement of the product gives an excuse for a new release. If they know the previous is going to require replacing within two or three years, then you’re building your market growth all the time,” Dunne says. “There needs to be some penalty to the producer if that’s their business model. They need to be designing products to last 10 years, like you design an automobile. Phones should be the same. If the battery life may naturally erode over time, then you need to be able to change it so you can give your product new life.” 

The global conversation on the circular economy is gathering pace, and in the next decade, governments will need to create the framework for circular businesses to thrive, as they compete with long-standing linear economy businesses. If successful, future issues of The House may well be written on refurbished laptops, sitting on remanufactured furniture, based on calls over phones that have lasted 10 years rather than two, and by light that has been leased.

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