Linear economy vs circular economy

Linear Economy

In a linear economy, the different between cost of production and sale price is the basis of the creation of value. In this type of economy, products last only a short time.
This means that the materials used are less able to stand the test of time, production costs are lower, and there are more sales and fewer extra costs.

Circular Economy

In a circular economy, on the other hand, the value of products and materials is maintained for as long as possible. The production of waste and the use of resources are kept to a minimum, and at the end of their life, products are reused to create new value. This excellent system allows many benefits for the environment and promotes innovation, sustainability of production and long-term competition.

European Commission’s plan of action

In 2015, the European Commission adopted an ambitious plan of action, namely sustaining a circular economy. These are a few of the key points:

  • preserving resources, including scarce resources and those which are subject to variations in price
  • savings for European economies
  • creating new business opportunities
  • creating an innovative, efficient system of production and exportation
  • creating local jobs, both general and specialised
  • creating opportunities for social integration and cohesion

The actions proposed by the European Commission will contribute to closing the circle for the life cycle of products, increasing recycling and reusing products, which will have advantages for the environment and the economy.