What is Circular Economy?
The circular economy is an economic model that focuses on eliminating waste and keeping materials, products, and resources in use for as long as possible. Unlike the traditional linear economy — which follows a "take, make, dispose" path — the circular economy aims to reduce environmental impact by closing the loop of product lifecycles through reuse, repair, refurbishment, and recycling.
Key principles of the circular economy
The circular economy operates based on several core principles:
- Designing out waste and pollution: Products are designed from the start to minimize waste and to be easily repaired or disassembled.
- Keeping products and materials in use: Encourages the extension of product life through reuse, repair, remanufacturing, and refurbishment.
- Regenerating natural systems: Promotes practices that restore and enhance natural capital, rather than depleting it.
Circular economy in the context of digital product passports (DPPs)
Digital Product Passports (DPPs) play a critical role in enabling and accelerating the circular economy. They serve as structured digital records that provide comprehensive information about a product — such as its materials, components, repair instructions, carbon footprint, recyclability, and compliance with sustainability standards.
Here's how DPPs support the circular economy:
- Transparency and traceability: DPPs make it easier to track a product’s entire lifecycle, which supports informed decisions about reuse, repair, and recycling.
- Improved product durability and reparability: By storing technical data and repair manuals, DPPs empower consumers, technicians, and recyclers to extend product life.
- Facilitating secondary markets: Accurate digital records help build trust in refurbished, reused, or recycled products.
- Regulatory compliance: The European Union’s Ecodesign for Sustainable Products Regulation (ESPR) leverages DPPs to enforce circular economy practices, particularly in sectors like electronics, textiles, batteries, and construction.
Why it matters
A shift toward a circular economy is essential for achieving climate neutrality, reducing resource dependency, and improving economic resilience. With growing global pressure to reduce waste and CO₂ emissions, DPPs offer a scalable and digital-first solution to embed circularity into manufacturing, retail, and consumption practices.
Together, circular economy principles and Digital Product Passports are reshaping how we design, produce, use, and dispose of products — aligning business models with long-term sustainability goals.