Linear Economy vs Circular Economy: why businesses must shift to circularity
The world extracts over 100 billion tonnes of materials annually, yet more than 90% of it is wasted after a single use (Circularity Gap Report, 2023). This is the linear economy in action: an unsustainable “take-make-dispose” model that is depleting resources, increasing waste, and damaging the environment.
Global waste volumes are set to surge by 70% to 3.4 billion tonnes by 2050 (World Bank). That’s the equivalent of each person producing waste equal to the weight of a small car every year. At the same time, demand for raw materials is expected to double by 2060 (OECD), creating a resource crisis for businesses reliant on finite materials.
There is a better way: the circular economy. Instead of waste, circularity sees materials as valuable resources to be continuously reused, repurposed, and regenerated. For businesses in key sectors like construction, grocery, and fashion, embracing circularity is not just an environmental imperative, it’s a competitive advantage.
Linear vs circular economy: understanding the two models
The linear economy and the circular economy represent two fundamentally different approaches to resource management. The linear economy is a one-way process that leads to resource depletion, while the circular economy focuses on keeping materials in continuous use.
What is a linear economy?
It follows a one-way path: extract, produce, use, and discard. It prioritises speed, cost and convenience over long-term sustainability, leading to high outputs of waste and pollution.
Materials in a linear economy create waste after use:
- Take: taking natural resources from the environment
- Make: making products from natural resources
- Use: using the products in a single-use way that prevents them from being reused or recycled.
- Dispose: after use, the products are disposed of, subsequently increasing landfill levels.
What are the key characteristics of a linear economy?
Single-use resource consumption
Materials are extracted, transformed into products, used once, and then discarded as waste, leading to substantial resource depletion and environmental degradation.
Short product lifecycles
Products are often designed for limited usability, lacking repairability or reusability, which accelerates their journey to landfills.
Eco-efficiency over eco-effectiveness
The focus is on maximising production and consumption, with minimal consideration for the environmental impact of waste generation.
Product-focused, not service-driven
Emphasis is placed on the design of products rather than on sustainable practices like reuse and recycling.
“Take, make, waste” mentality
This model promotes a linear progression from resource extraction to waste generation, without integrating regenerative or sustainable practices.
Linear economy examples
The linear economy – characterised by a “take, make, dispose” approach—dominates many industries, leading to significant environmental challenges. Here are some compelling examples:
Single-use plastics
Plastic bottles, bags, and packaging are some of the most common examples of linear economy waste. These items are designed for one-time use but take centuries to break down in landfills or the ocean.
In the UK alone, households throw away an estimated 1.7 billion pieces of plastic packaging per week – 90 billion pieces annually – with only 17% recycled domestically (Greenpeace, 2023).
Fast and ultra-fast fashion
The fashion industry produces cheap, low-quality clothing designed to be worn a few times and discarded. This has created a throwaway culture, leading to mass overproduction and textile waste.
The global fashion industry is responsible for nearly 10 percent of carbon emissions, and every second, a lorry’s worth of textiles is sent to landfill or incinerated (Ellen MacArthur Foundation, 2022).
Electronics and e-waste
Smartphones, laptops, and other electronic devices are often built with planned obsolescence, meaning they stop working or become outdated quickly. This leads to an explosion of electronic waste, much of which is difficult to recycle.
The world generates over 50 million tonnes of e-waste annually, yet only 17% properly recycled (Global E-Waste Monitor, 2020).
Disposable packaging
From food containers to online shopping parcels, disposable packaging is a major contributor to waste. Most packaging is used for minutes but lasts for centuries in landfill.
The UK alone produces 100 billion pieces of plastic packaging waste per year, averaging 66 items per household per week (Statista, 2023).
Construction and demolition waste
The construction sector is one of the largest waste producers, with materials often discarded rather than reused or recycled.
Construction and demolition account for over a third of waste created in the EU, most of which could be repurposed (European Commission, 2021).
The linear economy is reaching its limits. As resources become scarcer and environmental pressures rise, businesses and policymakers are shifting towards circular solutions that prioritise reuse, recycling, and long-term sustainability.
Linear economy end destinations
In a linear economy, products are designed with an expiration date – not just in terms of usefulness but in terms of their entire existence. Once discarded, they follow a one-way path to landfills or incineration, where they become environmental burdens rather than resources.
Landfills: burying value, creating problems
Landfills are the final resting place for discarded materials in a linear system. But far from being a harmless solution, they create long-term environmental and economic consequences:
- Resource loss: once materials are consigned to landfills, they are effectively lost forever, eliminating any possibility of recovery or reuse.
- Toxic pollution: landfills produce leachate, a hazardous liquid formed when waste decomposes and water filters through it. This leachate can seep into the soil and contaminate nearby water sources, posing severe threats to ecosystems and human health.
- Methane emissions: the anaerobic decomposition of organic waste in landfills releases methane, a greenhouse gas approximately 25 times more potent than CO₂, thereby exacerbating global warming.
In short, landfills are a black hole for resources, reinforcing a system that extracts but never regenerates.
Incineration: a costly shortcut
Burning waste through incineration is often marketed as a solution, but it’s more of a trade-off than a fix. While it reduces the volume of waste, the downsides are hard to ignore:
- Air pollution: incinerating waste emits pollutants such as dioxins and particulate matter, which can degrade air quality and pose health risks to nearby communities.
- Greenhouse gas Emissions: For every tonne of waste incinerated, approximately 1 tonne of CO₂ is released into the atmosphere, contributing to climate change.
- Toxic residue: the incineration process generates hazardous ash containing heavy metals and other toxins, necessitating careful and costly disposal measures.
Both landfills and incineration are symptoms of a dysfunctional system – one that prioritises convenience over sustainability. Every product buried or burned is a lost opportunity to retain value, reduce waste, and rethink how we use resources.
The alternative is to Think Circular – to look at solutions where materials are kept in use for as long as possible, minimising waste and regenerating resources.
Economic implications of supporting a linear economy:
As resource scarcity, environmental damage, and regulatory pressures increase, businesses and governments relying on this outdated model face rising costs, supply chain instability, and economic inefficiencies.
Rising resource costs and supply chain vulnerability
The global ecological footprint suggests that humanity is consuming resources at 171% of Earth’s capacity, meaning we are effectively borrowing from the future (Global Footprint Network, 2023).
This overconsumption creates supply chain risks, particularly for industries reliant on critical raw materials like rare earth metals, fossil fuels, and timber. Businesses depending on these resources will face higher production costs and increased economic uncertainty.
By 2030, global demand for raw materials is expected to outstrip supply by 40 percent, leading to price spikes and resource scarcity (European Environment Agency, 2022).
Increased waste management and disposal costs
Waste is a major hidden cost of the linear economy. As landfills reach capacity and governments impose stricter waste regulations, disposal costs rise worldwide. The EU’s landfill tax and Extended Producer Responsibility (EPR) system forces companies to pay more for the waste they generate.
The cost of landfilling waste in the UK has risen from £7 per tonne in 1996 to £102 per tonne in 2023 (HM Revenue & Customs).
For businesses that fail to adapt, these increasing costs cut into profits and reduce economic resilience.
Lost economic value from wasted materials
A linear economy discards billions of pounds worth of valuable materials every year. Instead of being reused, resources like metals, plastics, and textiles are wasted, leading to unnecessary extraction of new raw materials.
- The EU loses an estimated €600 billion annually due to inefficiencies in resource use (European Commission, 2023).
- Moving towards a circular economy, where materials are reused, repaired, or recycled, could boost the EU’s GDP by €1.8 trillion by 2030 and create 700,000 new jobs (Ellen MacArthur Foundation, 2022).
Environmental cleanup costs and regulatory pressure
Governments worldwide are introducing tougher environmental regulations to curb pollution and carbon emissions. Businesses operating within a linear economy are increasingly liable for environmental damage, with rising costs for carbon taxes, pollution fines, and regulatory compliance.
The estimated cost of climate-related disasters linked to unsustainable economic practices exceeded $165 billion for the US alone in 2022 (International Business Times). The Centre for Research on the Epidemiology of Disasters (CRED) reported that in 2021, the global economic losses from natural disasters were estimated at $252 billion.
Firms that fail to transition away from linear practices risk financial penalties, reputational damage, and lost market share as consumers and investors demand sustainability.
Weakened economic resilience and job losses
A linear economy is inherently fragile, relying on continuous consumption and waste to fuel economic activity. As supply chains are disrupted and environmental regulations tighten, industries that fail to adapt will see job losses and declining competitiveness.
In contrast, circular models, through remanufacturing, reuse, and repair industries, create new job opportunities while making the economy more resilient to resource shocks.
The cost of inaction
Sticking with a linear economy means higher costs, wasted resources, environmental damage, and economic vulnerability. As material scarcity and regulatory pressure increase, businesses and governments must adapt or face financial instability. The economic case for transitioning to a circular economy is clear; it cuts costs, stabilises supply chains, creates jobs, and drives long-term prosperity.
What is the difference between a linear economy and circular economy?
When comparing the linear and circular economy models, the differences become strikingly clear. While the linear economy is built on resource extraction and disposal, leading to environmental degradation and rising costs, the circular economy is designed for sustainability, resilience, and long-term economic gains.
The following table highlights the fundamental contrasts between these two approaches:
| Factor | Linear Economy | Circular Economy |
| Resource use | Extract and discard | Reuse and regenerate |
| Waste management | Landfill and incineration | Recycling and remanufacturing |
| Business model | Sell and dispose | Product-as-a-service and resale |
| Environmental impact | High emissions and pollution | Reduced waste and lower carbon footprint |
| Economic sustainability | Short-term gains, high costs | Long-term resilience, cost savings |
What is a circular economy?
Imagine a world where waste doesn’t exist – where every product, every material, and every resource is kept in play, reused, and regenerated rather than thrown away. That’s the circular economy in action.
A circular economy eliminates waste by keeping materials in circulation for as long as possible. It follows three key principles:
- Design out waste and pollution – Products are made to last, be repaired, or recycled.
- Keep materials in use – Resources are recovered and reused instead of discarded.
- Regenerate natural systems – Industries adopt practices that restore ecosystems rather than depleting them.
Why does the circular economy matter?
It’s more than just recycling, it’s a system that tackles some of the biggest challenges facing our planet:
- Climate change – by cutting emissions and reducing resource extraction.
- Biodiversity loss – by easing the pressure on ecosystems and reducing pollution.
- Waste and pollution – by designing waste out of the system entirely.
- Business and economic growth – by creating new commercial opportunities in reuse, repair, and sustainable design.
To make this a reality, circular principles need to be woven into every part of the economy, from how products are designed to how we manage materials after use.
A circular economy doesn’t just reduce waste; it reimagines it as a resource, creating a system that is both environmentally sustainable and economically smart.
Circular economy and the waste hierarchy
What if waste wasn’t waste at all? The waste hierarchy, also known as the mitigation hierarchy, is a framework for managing materials efficiently. It follows a simple process: the higher up the hierarchy, the better for the planet.
- Prevention – designing longevity in products to reduce consumption
- Reuse – extending product life through repair and refurbishment
- Recycling – converting waste into new products
- Recovery – extracting energy or materials from waste
- Disposal – landfilling or incineration
How can the waste hierarchy be applied to the circular economy?
A circular economy pushes waste up the hierarchy; prioritising prevention, reuse, and recycling over disposal. The goal? Eliminate waste altogether by designing smarter, rethinking consumption, and keeping resources in use for as long as possible.
In a world of finite resources, we can’t afford a throwaway culture. The waste hierarchy isn’t just about better waste management; it’s about rethinking waste entirely.
In a circular economy, materials are continually repurposed, minimising waste and maximising resource efficiency. Here’s how various processes contribute to this sustainable system:
1. Recycling facilities: breathing new life into materials
Recycling transforms waste materials such as metals, glass, paper, and plastics into new products, reducing the need for virgin resources. Advanced techniques, like chemical recycling, enhance material recovery, especially for plastics. In 2022, the UK recycled only 44.1% of household waste, a decrease from 44.6% in 2021, highlighting the need for improved recycling practices. (The Guardian)
2. Industrial symbiosis networks: turning one industry’s waste into another’s resource
Industrial symbiosis involves the exchange of by-products, waste materials, or energy between businesses to minimise resource consumption and landfill dependency. For example, waste heat from factories can be utilised to produce power or heat nearby buildings, exemplifying resource efficiency.
3. Anaerobic digestion and composting: harnessing the power of organic waste
Anaerobic digestion (AD) converts food and agricultural waste into biogas and digestate, contributing to renewable energy production and soil health. Composting transforms organic waste into soil conditioners, supporting regenerative agriculture. These methods not only manage waste but also enhance environmental sustainability.
4. Refurbishment and remanufacturing centres: extending product lifespans
Refurbishment and remanufacturing restore and upgrade products, commonly in the electronics, automotive parts, and furniture industries. This approach reduces resource use and waste, contributing to a more sustainable economy.
5. Waste-to-energy (WTE) plants: converting waste into usable energy
Waste-to-energy facilities convert non-recyclable waste into electricity and heat, providing an alternative to landfills. In a circular economy this process is classified as non-renewable still as the material value is destroyed so should be avoided as part of a circular economy.
6. Landfill as a last resort: Minimising environmental impact
In a circular economy, landfill use should be zero. However, some waste streams, including hazardous or non-recyclable materials, still require safe disposal. Innovations in landfill management, such as gas capture for energy production, aim to reduce environmental impacts.
Following this framework supports the transition towards a more sustainable and resource-efficient future, where waste is minimised, and materials are continually repurposed.
How to implement a circular economy
Successful implementation requires collaboration between businesses, policymakers, and consumers to create sustainable and economically viable systems.
1. Rethinking product design
Products should be designed for longevity, repairability, and recyclability. This includes:
- Using modular design for easy repairs and upgrades
- Selecting recyclable and biodegradable materials to minimise waste
- Avoiding planned obsolescence by ensuring products remain functional for longer
Example: Fairphone designs modular smartphones that users can repair themselves, reducing e-waste.
2. Shifting to sustainable production processes
Manufacturers must move away from resource-intensive and wasteful production methods by:
- Reducing energy and water consumption in production
- Implementing closed-loop manufacturing where waste materials are reintegrated into new products
- Prioritising renewable energy sources to power operations
Example: IKEA aims to become fully circular by 2030 by designing all products for reuse, refurbishment, or recycling.
3. Promoting product-as-a-service models
Instead of selling products outright, businesses can offer access-based services that extend product life, such as:
- Leasing models for appliances, electronics, and furniture
- Subscription services for clothing and high-tech products
- Product-sharing platforms to reduce the need for individual ownership
Example: Rolls-Royce offers aircraft engines as a service, where customers pay per hour of usage instead of purchasing outright.
4. Enhancing recycling and resource recovery
For a circular economy to work, waste must be treated as a valuable resource. This involves:
- Expanding recycling infrastructure to ensure high recovery rates of materials
- Investing in advanced recycling technologies, such as chemical recycling for plastics
- Standardising eco-labelling to improve consumer awareness of recyclability
Example: The European Union’s Circular Economy Action Plan aims to improve recycling rates across industries.
5. Encouraging consumer participation
Consumers play a crucial role in closing the loop by:
- Choosing durable, repairable, and second-hand products
- Participating in take-back and recycling schemes
- Supporting brands that prioritise circular practices
Example: Patagonia’s Worn Wear programme encourages customers to repair and resell used clothing.
6. Government policies and incentives
Legislation and financial incentives are needed to drive systemic change, such as:
- Extended Producer Responsibility (EPR) laws that require companies to manage end-of-life product disposal
- Tax benefits and subsidies for circular business models
- Bans on single-use plastics and non-recyclable materials
Example: The UK’s Plastic Packaging Tax encourages companies to use recycled content in packaging.
The Challenges of implementing a circular economy
Transitioning from a linear to a circular economy is not just about swapping disposable products for reusable ones, it requires a fundamental shift in how industries operate, how governments regulate, and how consumers think about waste.
While the benefits of circularity are undeniable, the path to achieving it is filled with practical, financial, and behavioural challenges that need to be tackled head-on.
1. Infrastructure limitations: a system built for waste, not recovery
The biggest roadblock to a circular economy is that most of the world’s infrastructure is still designed for disposal, not reuse. Landfills and incinerators are the default waste solutions, while recycling systems remain patchy, outdated, or inefficient. Without the right infrastructure, even the best circular strategies struggle to take off.
Key issues:
- Recycling systems are inconsistent and unreliable – Rules on what can and cannot be recycled vary across cities, countries, and industries, leading to confusion and inefficiencies.
- Material recovery is lagging behind – many recycling plants are only equipped to handle basic materials like aluminium and glass, while complex products – such as multi-layer plastics, textiles, and electronics – often go straight to landfill.
- Reverse logistics are missing – businesses need strong systems in place to collect, refurbish, and redistribute used products, but many lack the supply chain networks to make it work.
- Recycling technology needs more investment – innovations like chemical recycling for plastics and AI-driven waste sorting exist, but they’re expensive and not widely adopted.
Did you know?
Despite having one of the most developed recycling infrastructures, Europe only collects 42% of plastic waste for recycling, and much of it is downcycled rather than kept in a closed loop (European Environment Agency, 2022).
How to fix it:
- Governments and businesses need to invest in modern recycling and recovery facilities to process a wider range of materials
- Smarter waste collection and sorting systems—including AI-powered recycling plants—could help keep valuable materials in circulation
- More brands should implement take-back schemes where consumers return used products for refurbishing, repair, or recycling
- Evaluation of businesses models to determine how decisions are made across a business and what impact this has on the lifecycle of products and materials that move through the business
2. Changing consumer behaviour: Convenience vs sustainability
Even if businesses and governments roll out circular solutions, they’ll only work if people actually use them. The reality is that most consumers are used to convenience; buying cheap, disposable products, throwing things away without a second thought, and replacing rather than repairing. Getting people to adopt circular habits requires more than just good intentions—it needs education, incentives, and ease of access.
Key issues:
- Many people still don’t see the problem – without an understanding of waste’s long-term impact, it’s hard to convince people to change.
- Circular solutions often seem inconvenient – repairing a product or returning packaging for reuse feels like extra effort compared to simply buying new.
- There’s a stigma around second-hand and refurbished goods – many consumers still associate pre-owned items with lower quality, particularly in fashion and electronics.
- People assume sustainability costs more – while circular products and services can save money long-term, upfront costs sometimes appear higher.
Did you know?
The second-hand fashion market is booming, yet fast fashion still dominates because it’s cheap and convenient. Despite growing awareness, most consumers still prefer buying new over resale or rental options (ThredUp Resale Report, 2023).
How to fix it:
- Governments and businesses could make sustainability the easier choice – such as designing seamless return and repair programmes
- Companies could offer financial incentives, like discounts for returning used products or lower prices on refurbished goods
- Rebranding second-hand and refurbished markets as premium or stylish options, as brands like Patagonia and IKEA have done, can help shift perception
Reconomy’s role in the circular economy
Reconomy stands at the forefront of the transition to a circular economy, empowering businesses to move away from wasteful linear practices and towards sustainable, circular models. By combining cutting-edge technology with deep sector expertise, we help our partners close the gap on resources through our three integrated loops: Recycle, Re-use, and Comply.
Whether it’s optimising supply chains, simplifying compliance, or creating end-to-end waste management solutions, Reconomy helps partners to enhance resource efficiency and deliver measurable progress against sustainability goals.
Are you ready to start thinking circular? Contact us today.
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