This presentation by Peter Börkey, Circular Economy Lead at OECD Environment Directorate, was made during the discussion “Competition in the Circular Economy” held at the 140th meeting of the OECD Competition Committee on 15 June 2023. More papers and presentations on the topic can be found out at oe.cd/citce. This presentation was uploaded with the author’s consent.

1. BUSINESS MODELS FOR THE
CIRCULAR ECONOMY
Peter Börkey, Circular Economy Lead, OECD Environment Directorate
15 June 2023, Paris

2. 1. Global raw material consumption and related
environmental impacts
2. Defining circular economy
3. Circular business models
4. Scalability
5. Concluding observations
2
Outline

3. 3
Global material resources consumption projected to increase
significantly
Source: OECD

4. …with serious consequences for the environment
Source: World Finance
Greenhouse gas projection
Plastic waste projection
4
460 Mt/a Current
production (2019)
x4 to 2050
projected increase of plastic
waste
22 Mt/a polluting
the environment
Source: OECD

5. 5
Defining the Circular Economy
Increasing
material
efficiency
Slower material
loops
Closing material
loops
• Increased resource
productivity
• Increased asset
utilization
• Modified consumer
preferences
• Increased product
lifespan (e.g. through
eco-design, re-use or
repair)
• Increased product,
repair and
remanufacture
• Increased material
recycling and recovery
Source: McCarthy, A., R. Dellink and R. Bibas (2018), The Macroeconomics of the Circular Economy Transition: A Critical Review of Modelling Approaches,
https://doi.org/10.1787/af983f9a-en.

6. 6
Five Circular Business Model Types
Resource Recovery
Circular Supplies
Product Life Extension
Sharing Models
Product-Service-Systems

7. 7
Resource Recovery
Recycle
Industrial
Symbiosis
Upcycle
Source: Accenture, Rabobank.

8. 8
Circular Supplies
Cradle-
to-
Cradle
100%
recyclable
100% bio-
degradable
Source: Accenture, Rabobank.

9. 9
Product Life Extension
Maintain
Repair
Refurbish /
Remanufacture
Long life
by design
Resell
Source: Accenture, Rabobank.

10. 10
Sharing Models
Co-access
to capacity
Co-ownership
of assets
Source: Accenture, Rabobank.

11. 11
Product-Service-Systems
Result-oriented
services
Access-oriented
services
Source: Accenture, Rabobank, Tukker.

12. 12
In terms of market share most circular business
models are restricted to economic niches
Business model Sector Market penetration
PSS: result-oriented (chemicals) Automotive 50 - 80%
PSS: result oriented (digital content) Music 50%
Waste as value: recycling Pulp and paper 38%
PSS: result oriented (digital content) Books 25 - 35%
Waste as value: recycling Steel 25%
PSS: result-oriented (chemicals) Aerospace 5 - 15%
Waste as value: recycling Plastics 13%
Product life extension: refurbishment Smartphones 4 - 8%
PSS: result-oriented (lighting & heating) Various 4 - 7.5%
Product life extension: remanufacturing Machinery 3 - 4%
Product life extension: refurbishment Various 2 - 3%
Product life extension: remanufacturing Aerospace 2 - 12%
Idle Capacity: co-access Lodging 1% - 6%
Product life extension: remanufacturing Automotive 1%
Product life extension: remanufacturing Consumer and EEE 0 - 1%
Was as value: recycling REE metals <1%
PSS: user-oriented (car sharing) Transport <1%
>50 %
<15 %
15 - 50 %

13. • Pricing of environmental externalities make Circular Business Models
more competitive.
• Promote supply of circular products:
– Design standards, EPR schemes, targeted R&D funding
• Promote demand for circular products:
– Differentiated VAT rates, recycled content mandates, product labelling
standards and green public procurement.
• Ensure policy frameworks do not favour incumbents or result in reduced
competition.
• Mitigate any potentially undesirable (environmental and social) effects
13
The role of policy

14. 14