Transition towards the circular economy demands a whole new logic of designing economic processes and running businesses. In the traditional linear model of production and consumption, resources are mined or grown, then transformed into goods which are then used and finally turned into waste (the so called ‘produce-use-dispose’, ‘make-take-dispose’, or ‘take-make-waste’ paradigms). In the circular economy, materials are repeatedly recovered and recycled—they remain in circulation for as long as possible.
2. Circular Economy and Multitude of Related Concepts
Circular economy is a concept that has not been clearly defined in the literature so far. However, different propositions share much in common and converge towards the same paradigm
[28]. Kirchherr et al. (2017)
[29] view the CE as a market-based economic system that supports business models implementing the ideas of reducing, alternatively reusing, recycling, and recovering materials in the production, distribution, and consumption processes. Such reorientation of the economic system at all levels (products, companies, consumers, cities, regions, countries) shall lead to the environmental viability, welfare, and social equity for the current and future generations. The circular economy is defined in opposition to the linear ‘make-take-waste’ model and is understood as an extension of the concept of green economy or bioeconomy
[30][31][32][33] and linked to a cleaner economy, a low emission economy, industrial symbiosis
[34], industrial ecology, eco-industry
[35][36], cradle-to-cradle economy
[37], Tech-Ökonomie
[38], zero-waste economy, ‘regenerative by design’ economy
[39], natural capitalism
[40], green engineering, ecological modernisation
[41], or sustainable development in general
[42][43][44][45][46].
The bio-based CE is an economy where materials and energy are produced and derived from renewable biological sources
[47][48]. Moreover, biological resources are managed in a way that their value is maintained at the highest level as long as possible
[49]. Bioeconomic orientation of the CE is particularly suitable in sectors such agriculture
[50], fertilizers
[51], forestry
[52], marine economy, pulp and paper, food production and retail
[53], feedstock
[54], cosmetics, biofuels, bioplastics
[55], construction, furniture as well as bio-waste management
[56][57], and wastewater treatment
[58]. Metic et al. propose a concept of dual circularity, noting the existence of distinct, yet overlapping, thematic areas of a technology-focused CE and bio-based CE
[59]. The area where ‘bio’ fuses with ‘tech’ includes, among others, such topics as microbial production, enzyme technology, and Green Chemistry
[60].
Regardless of the definition, the implementation of the principles of a circular economy and the transformation towards less wasteful systems, a more effective and sustainable use of natural resources, and the reduction of pollutant emissions, including greenhouse gases, is becoming one of the key challenges worldwide
[61]. Institutional, economic, environmental, organisational, social, technological, supply chain related drivers, barriers, and critical success factors determining the transition to a CE are discussed from different perspectives and at different levels of analysis
[62]. Changing the economic systems is not possible in the short term horizon, and the practices that lead to the implementation of the circular economy postulates are introduced gradually
[63]. Monitoring the progress of the performance at micro, meso, and macro levels
[64] towards the circular economy is a complex and demanding task, mainly because of the multidimensionality and vagueness of the concept
[65][66].
3. Macro and Meso Levels of CE Analysis
At the macro and meso levels, researchers study sectoral or spatial (national, regional
[67], municipal/urban
[68][69]) aspects of CE. Those aspects were divided by Martinho and Mourão
[70] into the following categories: (1) efficiency and sustainability
[71][72][73], (2) policies, governance, and management
[41][74][75][76][77][78], (3) product life-cycle
[79][80], (4) resources and waste
[81][82], (5) innovation and opportunities
[83], (6) sectoral topics, (7) bioeconomy. Mhatre et al.
[84] offer an exhaustive list of CE-oriented activities characteristic to different sectors of national economies. Those activities are, among others, related to: bio-based materials, by-products’ utilisation, cascading materials, community involvement, design for disassembly, design for modularity, down-cycling, eco-design, eco-labelling, element recovery, energy recovery, extended producer responsibility, bio-chemicals’ extraction, functional recycling, green procurement, high-quality recycling, incentivised recycling, material substitution, optimising packaging, product as a service, refurbishment, adaptable manufacturing, restoration, reuse, redistribution and resell, sharing, take back and trade-in, upcycling, maintenance and repair, virtualisation.
4. Micro Level of CE Analysis
At the micro level, forward-looking enterprises and organisations anticipate the emerging shift towards the CE and try to transform their operations with the aim at boosting innovation, penetrating new markets, and securing customer loyalty. Interface of entrepreneurship and the CE is an extensively explored topic
[85]. Incentivising adoption of CE activities by companies (with a special focus on small and medium enterprises
[86]) is also a priority of the European Union
[87]. Public sector entities are also evaluated against the circularity criteria, especially with regards to public procurement procedures, internal process and operations, and public service delivery
[88]. Eco-innovations
[89] and new business models are proposed and validated in various sectors
[90][91][92][93]. Discussion on incorporating digital technologies (Industry 4.0, Big Data, Internet of Things, Artificial Intelligence, Blockchain) into CE frameworks is currently a dynamic field
[94]. Interaction between governmental policies and different business models conducive to the CE is also analysed
[95].
Four macro-categories of business models aligned with the CE paradigm are distinguished: net-zero emission innovation, servitisation, sharing, product life extension, product residual value recovery
[96][97]. In the CE assessment of single organisational entities, such aspects as greenhouse gas emissions, air pollution, nitrogen release, phosphorus release, water pollution, release of harmful substances, biodiversity loss, real estate maintenance, transport, space/land usage, and the procurement of electricity, energy, food, and other materials, are considered
[37]. Intangible aspects of business alignment to CE principles labelled as values, mission, culture, or mindset are also studied
[98].
Several frameworks of CE assessment applied at the macro level may also be used at the micro level, in single businesses and non-profit organisations: Life Cycle Assessment (LCA), social life cycle assessment (S-LCA), BS 8001:2017 Standard
[99] material flow analysis (MFA), Life Cycle Sustainability Assessment (LCSA), Ecological Footprint (EC), Product Circularity Data Sheet
[100]. Accounting and accountability reporting models are also indicated as important mechanisms through which enterprises and stakeholders can measure the progress, costs, and gains from the transition towards a CE
[101][102]. The focus here is clearly on fulfilling certain requirements rather than benchmarking (understood as a specific management practice oriented at achieving excellence described in
[103]) and comparison with other entities
[104]. Depending on the chosen CE assessment approach, different groups of intended end-users may be identified: specific organisations, entities from a particular sector, managers, designers, customers, policy makers
[105].
5. CE Metrics and Indicators
One important step towards CE mainstreaming is the development of suitable indicators that would help measure the state of transition in both absolute and relative/comparative terms
[26][65][106][107][108]. Research on CE metrics and indicators is ongoing at all levels of analysis (micro, meso, macro), with different indicators trying to capture different dimensions of sustainability (environmental, economic, social) and core principles of the CE (‘reduce, reuse, recycle, recover, remanufacture, redesign’)
[109]. Examples of a quantitative analysis of the CE in the European Union concern individual member states
[110][111], groups of member states
[112][113], regions
[114][115], economic sectors
[116][117], or all EU member states
[118][119][120][121][122][123][124][125].
The recommended indicators measure different aspects of the CE at the company, regional, and national level
[126]. Measures proposed by the EU to progress towards a circular economy at the EU and national level are composed of a set of key indicators that cover production and consumption, waste management, secondary raw materials, and competitiveness and innovation
[127]. In the typology of the European Environment Agency (EEA), the indicators are divided into five groups: descriptive indicators, performance indicators, efficiency indicators, policy effectiveness indicators, and total welfare indicators
[128]. Different methodologies of clustering and classification are proposed, both conceptual and empirical, to deal with the humongous number of available sustainable development indicators (SDI)
[65][129][130][131][132][133][134].
6. DEA Method in the Evaluation of CE Goals Achievement
The DEA method plays an important role in comparative performance assessment. It allows the comparison of the efficiency of countries, regions, organisations, enterprises, and other entities characterised by the same set of inputs and outputs. DEA is broadly applied in various fields of public policy and business endeavours. It is recognised as a useful instrument of efficiency improvement and competitiveness increase
[135]. In the case of CE transition evaluation, DEA may be successfully used.