The butterfly diagram explained: visualising how the circular economy actually works

The butterfly diagram is a visual model created by the Ellen MacArthur Foundation that maps how materials flow through a circular economy. It splits into two “wings”: a biological cycle for renewable materials that return safely to nature, and a technical cycle for finite materials like metals and plastics, kept in use through reuse, repair, and recycling.

If you have spent any time reading about the circular economy, you have almost certainly seen the butterfly diagram. It is the two-winged graphic with arrows looping back on themselves, and it has become the single most recognisable image in circularity.

That popularity is well earned. The diagram takes a genuinely complex system – how materials move through an economy without becoming waste – and makes it understandable at a glance. But a glance is often as far as most people get. Understanding what each loop actually means, and how it impacts a real business, takes a bit more unpacking.

In this piece, we break the diagram down wing by wing to show how it connects to the waste management and compliance work that keeps materials circulating in practice.

What is the butterfly diagram?

The butterfly diagram shows how materials can flow through a circular economy, with different strategies used to keep resources in use and prevent waste.

It was developed and popularised by the Ellen MacArthur Foundation and has become one of the best-known visual representations of circular economy principles.

The diagram gets its name from its shape. Two wings represent two different material cycles that meet around the centre of the system:

• The biological cycle on the left deals with renewable materials that can return safely to the natural environment.

• The technical cycle on the right deals with finite materials that need to be kept in circulation through strategies such as reuse, repair, refurbishment, remanufacturing and recycling.

The model moves beyond the traditional linear “take, make, use, waste” approach. Instead, it asks how products and materials can retain their value and remain useful for as long as possible.

Is the butterfly diagram the same as the sunspot butterfly diagram?

No. The circular economy butterfly diagram is a model for understanding material flows and resource management, developed by the Ellen MacArthur Foundation.

A sunspot butterfly diagram is a completely different scientific visualisation used to show the movement of sunspots during the solar cycle.

The two diagrams share a name because of their visual shape, but they describe entirely different systems.

How does the butterfly diagram show value retention?

Value retention is one of the most important ideas behind the butterfly diagram.

When a product is manufactured, significant resources, energy, labour and economic value have already been invested in creating it. A circular economy aims to retain as much of that value as possible rather than destroying it when the product reaches the end of its first use.

The butterfly diagram illustrates this through a series of increasingly intensive loops.

For example, a product that can be reused retains more of its original form and value than one that needs to be completely dismantled and remanufactured. A product that can no longer be reused may be repaired or refurbished. Only when these options are no longer viable does the system move towards recycling and recovery.

This creates a hierarchy of value retention:

Reuse → Maintain and repair → Refurbish → Remanufacture → Recycle

The further a product moves towards the outside of the technical cycle, the more of its original structure and embedded value is typically lost.

This is why the butterfly diagram is about much more than recycling. It demonstrates how businesses can make decisions that retain product, component and material value for longer.

The biological cycle: the left wing

The biological cycle is the left-hand side of the butterfly diagram. It covers renewable materials and biological nutrients that can safely return to the biosphere.

Examples include:

• Food and organic waste

• Natural fibres

• Agricultural materials

• Other biodegradable biological resources

The objective is not simply to dispose of these materials but to return nutrients to natural systems wherever possible.

Regeneration and biological nutrients

At the centre of the biological cycle is the concept of regeneration.

Processes such as composting and anaerobic digestion can help return biological materials to productive use. Anaerobic digestion can also generate biogas, creating an additional source of energy from organic material.

The biological cycle therefore demonstrates how resources can move between the economy and the natural environment without necessarily becoming waste.

Cascading biological materials

The biological cycle also includes the idea of cascades, where biological materials are used for successive purposes before their nutrients are eventually returned to the biosphere.

For example, a biological material might first be used in a product, then repurposed for another application before eventually being processed through composting or anaerobic digestion.

This helps maximise the useful life of renewable resources while supporting wider circularity and sustainability objectives.

The technical cycle: the right wing

The technical cycle is the right-hand side of the butterfly diagram. It deals primarily with finite materials and manufactured products that cannot safely return to nature.

Examples include:

• Metals

• Plastics

• Electronics

• Machinery

• Manufactured components

• Other durable products

Rather than allowing these resources to become waste, the technical cycle shows how they can be kept in use through a series of circular strategies.

What do the inner loops represent in the butterfly diagram?

The inner loops of the butterfly diagram represent the circular economy strategies that preserve the highest amount of a product’s value, functionality and embedded resources.

These loops sit closest to the user and require the least amount of additional energy, labour and processing to keep products in circulation.

The main inner loops include:

• Maintenance and servicing

• Repair

• Reuse and redistribution

• Refurbishment

• Remanufacturing

The closer a loop is to the centre of the technical cycle, the more value it typically retains.

This reflects one of the key principles of the circular economy butterfly diagram: preserving products and components in their highest-value form for as long as possible before moving to more resource-intensive recovery activities.

Why is recycling on the outer loop?

Recycling is an important part of the circular economy, but it is positioned on the outer edge of the butterfly diagram because it generally breaks products down into their constituent materials.

That means the product itself, along with much of the value invested in its design and manufacture, is lost.

Recycling is therefore preferable to disposal, but reuse, repair, refurbishment and remanufacturing can often retain more value.

For businesses, this distinction is commercially important. Keeping a product in circulation can reduce the need for new materials while creating opportunities for resale, refurbishment and longer customer relationships.

Reuse, repair and remanufacturing: what’s the difference?

The terms reuse, repair, refurbishment and remanufacturing are sometimes used interchangeably, but they represent different strategies within the technical cycle.

Reuse

Reuse means using a product again, usually with little or no modification.

For example, a business might collect a returned product and redistribute it to another customer or location.

Because the product remains largely intact, reuse can retain a significant amount of its original value.

Repair

Repair involves fixing a product so that it can continue performing its intended function.

This might involve diagnosing a fault, replacing a component or carrying out maintenance before returning the product to service.

Repair can significantly extend a product’s useful life without requiring the product to be completely rebuilt.

Refurbishment

Refurbishment typically involves inspecting, cleaning, repairing, upgrading and testing a used product before returning it to an appropriate quality standard.

A refurbished product can then be reused, resold or redeployed.

Remanufacturing

Remanufacturing is a more comprehensive process. A product is generally disassembled, components are assessed and restored or replaced, and the product is rebuilt to a defined performance or quality standard.

This can allow businesses to recover significant value from complex products and components that might otherwise become waste.

Why the two cycles have to work together

The biological and technical cycles are different, but they form part of the same circular economy system.

A business that focuses exclusively on manufactured products could overlook biological material flows such as food waste, natural fibres or biodegradable packaging. Equally, an organisation that manages biological waste effectively may still have significant opportunities to extend the life of products, equipment and manufactured materials.

Mapping an organisation’s material flows against both sides of the butterfly diagram can therefore help identify opportunities to:

• Reduce waste

• Extend product lifecycles

• Improve resource efficiency

• Increase reuse and recovery

• Reduce reliance on virgin materials

• Support sustainability objectives

The diagram provides a high-level framework, but businesses need to translate those principles into practical processes across their products, operations and supply chains.

What the diagram gets right, and its limits

The butterfly diagram is valuable because it turns a complex systems concept into a visual model that businesses, policymakers and other stakeholders can understand.

It demonstrates an important principle: circularity is about keeping products and materials at their highest possible value for as long as possible, not simply recycling more waste.

However, it is a simplified representation of a much more complicated system.

Real products can contain combinations of biological and technical materials, making it difficult to place them neatly into one side of the diagram. A product containing natural fibres, synthetic materials, coatings and other components, for example, may require several different recovery routes.

The butterfly diagram should therefore be viewed as a strategic framework rather than an operational blueprint. Businesses still need to assess individual products, materials, supply chains and processes to determine the most appropriate circular solutions.

Clarification: the sunspot butterfly diagram and solar cycles

The circular economy butterfly diagram is sometimes confused with the sunspot butterfly diagram because both visualisations resemble the shape of a butterfly.

However, they serve entirely different purposes.

The circular economy butterfly diagram was developed and popularised by the Ellen MacArthur Foundation to illustrate how products, components and materials can remain in circulation through biological and technical cycles.

The sunspot butterfly diagram is a scientific visualisation used in astronomy and solar physics. It maps the movement and distribution of sunspots across the surface of the Sun during an approximately 11-year solar cycle.

As sunspots emerge and migrate over time, the plotted pattern resembles the wings of a butterfly, which is how the diagram received its name.

Although both diagrams share a similar shape, the circular economy butterfly diagram focuses on resource management, circularity and value retention, while the sunspot butterfly diagram focuses on solar activity and astrophysical processes.

The butterfly diagram and sustainability

The butterfly diagram can help businesses connect sustainability strategy with practical resource management.

By prioritising reuse, repair, refurbishment and remanufacturing, businesses can potentially reduce demand for virgin materials and extend product lifecycles. Recycling and recovery can then provide additional routes for materials that can no longer be kept in their original form.

This can contribute to wider sustainability goals, including:

• Reducing waste

• Improving resource efficiency

• Reducing reliance on virgin resources

• Extending product lifecycles

• Reducing the environmental impact associated with new production

• Supporting more sustainable business models

However, circularity should not be treated as a standalone sustainability exercise. The most effective programmes connect environmental objectives with commercial value, operational efficiency and supply-chain resilience.

How the butterfly diagram maps to real waste management operations

The diagram is a helpful mental model, but the real test is what it looks like on the ground. Here is how each part of the butterfly connects to day-to-day waste and resource management:

Reuse and resale

The inner technical loops can translate into take-back, resale and redistribution programmes that keep products moving between users rather than ending their life after their first use.

This includes reverse logistics, product processing and redistribution capabilities delivered through Reconomy’s Advanced Supply Chain and ReBound specialist brands.

Returned products can be assessed and routed towards reuse, repair, refurbishment, resale or recycling depending on their condition.

Repair and refurbishment

Repair and refurbishment extend the working life of products rather than replacing them prematurely.

Reconomy’s Re-use Loop supports inspection, repair, refurbishment and reconditioning, helping returned products meet the required standard before being returned to stock or the market.

Recycling and materials recovery

When products can no longer be reused, repaired or remanufactured, waste management and recycling services provide routes for recovering their constituent materials.

Sorting and processing can separate materials and prepare them for recycling and recovery, helping prevent valuable resources from being lost to disposal.

Take-back and reverse logistics

The physical infrastructure behind a circular economy is just as important as the strategy.

Reverse logistics connects collection, transportation, inspection, processing and routing, allowing products and packaging to return to the appropriate circular loop.

Without effective take-back systems, businesses may struggle to capture products once they leave their original point of sale or use.

The biological cycle in practice

The biological cycle can be applied through processes such as composting and anaerobic digestion, which allow organic materials to be processed rather than treated simply as waste.

Reconomy’s food waste services include anaerobic digestion and composting routes, while its wider recycling network includes Combineering as one of the specialist brands supporting material recovery.

The circular economy opportunity

The need to move towards more circular systems is reflected in global resource use.

The latest Circularity Gap Report puts the global circularity rate at 6.9%, meaning the overwhelming majority of materials entering the economy still come from virgin sources.

For businesses, this highlights the opportunity to rethink how products and materials are designed, used, recovered and managed at end of life.

The butterfly diagram provides a useful starting point for that process. By mapping material flows against the different loops, organisations can identify where products can be kept in use for longer and where waste can be prevented before it is created.

If you want to see how this differs from a traditional linear model, our guide to linear economy vs circular economy explores the differences in more detail. You can also read our guide to circular economy business models to explore how organisations are putting circular principles into practice.

Reconomy works across both wings of the diagram, from take-back and material recovery to compliance, reporting and circular economy strategy.