What is a circular economy and why is it important?

A circular economy is about changing the way we produce, make, sell and use products to minimise waste, and reduce our impact on the environment. It aims to keep materials and resources in use for as long as possible.

A circular economy is an alternative to the more traditional ‘linear’ approach. A linear economy (also known as a “take, make and dispose” economy) involves extracting resources, making products, using them, then disposing of them.

A circular economy keeps products and materials in use, through sharing, repairing and reusing. These product and materials are then recovered and recycled instead of being disposed. A circular economy also means designing and assembling products that use more recycled material, that last longer and that can be more easily repaired or refurbished.

Many NSW businesses and local communities are already at the forefront of the circular economy, finding innovating ways to reuse and recycle materials to save money and maximise their resources. This is helping to generate economic growth and job creation.

The NSW Government defines a circular economy as:

A circular economy values resources by keeping products and materials in use for as long as possible.

Maximising the use and value of resources brings major economic benefits, contributing to innovation, growth and job creation.

A circular economy can help protect businesses from fluctuating resource commodity prices and provides a more stable operating environment for manufacturers, retailers and consumers.”

Why has the NSW Government released a Draft Circular Economy Policy for public comment now?

Until recently, China was a large importer of recyclable materials, accepting more than 30 million tonnes of waste from all over the world every year. Australia alone sent 1.25 million tonnes of recyclable material to China in 2016-17. At the start of January 2018, however, China began to enforce restrictions on the import of recyclable materials under its National Sword Policy. This policy has impacted the global market for recyclable material, including the recyclable material that is currently collected in NSW.

China’s National Sword Policy has provided an opportunity for the Government to rethink how we recycle and manage waste, now and in the future. The Circular Economy policy will provide a framework for addressing the impacts of National Sword in the longer-term and will create a more resilient local economy that is less impacted by fluctuations in the international market.

What are the circular economy principles?

Following an international review of circular economy approaches in other jurisdictions, and analysing these approaches against the NSW context, we have identified six policy principles:

  • Minimise consumption of finite resources – replacing raw materials with recovered and recycled materials. 
  • Separate economic growth from resource consumption – increasing the productivity of our raw materials, recycling and reusing products and materials to support jobs and the economy. 
  • Design out waste and pollution – creating products that use more recycled material, that last longer and that can be more easily repaired or refurbished.
  • Keep products and materials in use – sharing, reusing and repairing products as much as possible, and improving the quality of recyclables to support their reuse.
  • Innovate in resource efficiency – encouraging business models and services that share and repair products, as well as technologies that improve the way we reuse and recycle material.
  • Create new circular economy jobs – supporting jobs that share, repair, reuse, recycle and remanufacture products and material, across different sectors.

What are some of the key aspects of a circular economy that the Government is seeking feedback on?

The draft policy focuses on eight key areas where action can help us transition to a circular economy. We would love to hear your thoughts on these focus areas:

1.  Support innovation

2.  Purchasing decisions

3.  High quality, consistent recycling

4.  Value organics

5.  Mainstream product stewardship

6.  Responsible packaging

7.  Support re-use and repair

8.  Better design

What does a circular economy mean for businesses?

Moving to a circular economy increases the resilience of local markets and industry to external shocks and stresses, particularly in resource commodity markets.

Moving to a circular economy will provide opportunities for innovation in process and product design, to assist businesses in becoming more resource and energy efficient.

The circular economy will develop new markets for recyclable material that increases remanufacturing. Sharing platforms and product repair are important parts of a circular economy, and provide new and different ways of doing business. This results in job growth and supports the local economy.

What does a circular economy mean for households?

Many households have already adopted circular economy principles, reusing, repairing and recycling items. As household’s consumption changes, so too will business models change and adapt to that demand. We have seen in explosion in the sharing economy and this trend is likely to continue. Households now have access to a much wider range of goods and services – that are often shared with other users in the community – without having to incur the cost of buying and maintaining them. Households are also becoming more discerning, looking for products that last longer and are easily repairable. Providing more information to consumers on the durability of products could help them make choices about what products they buy.

Why is reuse and repair important?

By repairing and reusing products, we minimise the amount of raw materials and energy that would go into producing a brand-new product. We also avoid unnecessary waste, and sending useful items that are in good condition to landfill. This reduces our impact on the environment, but also has economic benefits including for repairers.

What role do you see local councils playing in the transition to a circular economy?

Local councils play a key role in the circular economy. They play a role in educating their communities, advocating for change and providing essential services like waste and recycling collection services and other community services.

What role do stewardship schemes play in a circular economy?

Product stewardship means sharing the responsibility of products that are no longer used and that would otherwise be disposed (known as ‘end-of-life’ products). Producers, retailers, householders and waste contractors all have a role to play in ensuring that end-of-life products are properly managed, and recycled wherever possible. Product stewardship schemes support a circular economy approach because they encourage recycling of material that would have gone to landfill.

How does the NSW Circular Economy Policy fit in with the Commonwealth Government's circular economy principles?

The Australian Government is currently undertaking work to develop circular economy principles and is embedding these into the updated National Waste Strategy.

The NSW Government has been working with other jurisdictions, including the Commonwealth Government, to ensure that NSW is an active part of a national discussion on circular economy.

How can I have my say?

You can download the Draft Circular Economy Policy by visiting www.engage.environment.nsw.gov.au/circulate

On this website, you will also find a Circular Economy Discussion Paper, which provides details and background to the Policy and the circular economy principles.

Consultation will be open until midnight 25 November 2018. You can also email circular@epa.nsw.gov.au if you have detailed feedback.

What are the next steps?

When the consultation process closes, all submissions will be collated and reviewed. These submissions will be used to finalise the Circular Economy Policy. An Implementation Plan will then be developed that sets out an action plan to drive the transition to a circular economy.

The NSW Government will work to embed circular economy principles into Government decision making. It will also continue to work with other State and Territory Governments and the Federal Government to advocate for and work on cross-border actions that can help transition to a circular economy.