Cut material extraction by 30% globally, Circle Economy tells World Economic Forum

19 Jan 2023 --- As the annual World Economic Forum (WEF) is underway in Davos, Switzerland, a report by impact organization Circle Economy and services company Deloitte is calling for a 30% reduction in material extraction worldwide to limit global warming to 2 degrees. 

The report details that of the landmark 100 billion tons of virgin materials extracted from Earth annually, only 7.2% make it back into the economy. A more circular world could reduce material consumption by one-third, it states and would tackle climate change and bring the world back within safe planetary limits. 

Speaking to PackagingInsights, Matthew Fraser, head of R&D at Circle Economy, says: “Circular economy means systems change. To succeed, we need collaboration between the public and private sectors.” 

“Every nation can develop its own circular economy strategy and roadmap that sets priority targets for key sectors and materials. Business leaders can analyze their business and implement circular economy strategies throughout their operations,” he asserts. 

An increasingly linear world 
Reducing global material use through circular solutions, such as reuse, repair and recycling of items, can limit global warming to 2 degrees and bring human activities back within safe planetary boundaries, according to the report.

Closing the circularity gap is essential to meeting the Paris Climate agreements.The global economy is measured to be 7.2% circular today—dropping from 9.1% in 2018 when Circle Economy says it first calculated the figure. That means that of the landmark 100 billion tons of virgin materials extracted from Earth annually, only 7.2% make it back into the economy in the form of recycled materials. 

Over the past six years alone, the global economy has extracted and used almost as many materials as over the course of the entire 20th century, finds the Circularity Gap Report 2023.

Matthew Fraser, head of research and development at Circle Economy, says that this low level of circularity “demonstrates how reliant the global economy is on new, virgin materials. There is huge potential to increase the global economy’s use of secondary materials.”

Current linear processes don’t just sap the planet’s finite materials—they also produce tonnes of greenhouse gas (GHG) emissions and waste, a considerable part of which can be prevented, according to the report. 

Excess production, excess damage 
According to the study, key societal needs – such as nutrition and housing – could be fulfilled with just 70% of the materials the world economy currently consumes. Crucially, cutting material extraction by 30% could hugely improve environmental health across land, sea and air, it states. 

Circle Economy asserts the key to this reduction lies in transitioning from fossil fuels to more renewable energy sources and lowering demand for high-volume minerals, such as sand and gravel, which are largely used for housing and infrastructure. 

In practice, this would mean boosting renewable energy and renovating old buildings and infrastructure instead of constructing new ones in combination with other measures. The most appropriate approaches will vary significantly between geographies, given the just transition imperative acknowledged in the 2015 Paris Agreement.

The potential reduction of material used will look different across global regions. Some, like the US and EU member states, must radically reduce their material extraction and use, as they currently consume 31% of materials. While others, such as China, will need to stabilize their material consumption, says the report. 

‘The linear economy has a number of detrimental effects on the environment that significantly affect peoples’ well-being. Our research shows that by adopting circular economy practices, we can cut material extraction, continue to prosper and return to living within the safe limits of this planet,” points out Martijn Lopes Cardozo, CEO at Circle Economy.Material extraction must be cut by 30% worldwide, according to the report.

Delivering more benefits with fewer materials
Four key global systems account for the lion’s share of global emissions and waste, according to the study, The built environment, food systems, mobility and transport, and manufactured goods and consumables. 

Sixteen ambitious circular economy solutions implemented across these systems can reverse the current overshoot of five planetary boundaries, ensuring land, air and water safety and limiting global warming to below 2 degrees, Circle Economy asserts. 

The food system now occupies roughly half of the habitable surface of the planet. It is responsible for one-third of global GHG emissions, 8-10% of which relate to lost and wasted food production. Transitioning to a circular food system would include cutting food waste by improving transport and storage management, supporting healthy soils to keep land arable for longer and focusing on local, seasonal and organic produce to reduce the need for toxic fertilizers, fuel and transportation. 

The built environment accounts for roughly 40% of global GHG emissions, with cement production alone contributing around 7% of the CO2 released into the atmosphere globally. Boosting the building’s energy efficiency and repurposing existing building stock are some ways this could be improved. 

The mobility and transport system is a major driver of climate change and ocean acidification, responsible for approximately 25% of GHG emissions globally. In a circular mobility system, walking, cycling and remote work would be key, as would investment in high-quality public transport and a transition to electric vehicles. 

Manufactured goods and consumables imply highly energy- and material-intensive industrial processes. The Circularity Gap Report 2023 estimates that over one-quarter of global solid waste generation is industrial waste. This could be improved with more sustainable fashion practices, promotion of responsible buying and extending the lifetime of machinery. 

Dieuwertje Ewalts, director of Circular Economy and sustainability at Deloitte, concludes: “These findings reinforce that we have reached a point where the planet cannot keep up with the human demand for material goods. Circularity offers us the opportunity to reduce planetary pressures. Involvement from business and creating more circular products will be key in creating a positive impact for both the planet and society.” 

By Louis Gore-Langton