Chapter 07 · Materials & footprintsCircular Economy & Materials
Circular business model
Definition
A model for creating, delivering and capturing value that decouples revenue from virgin resource consumption by closing, slowing or narrowing material loops. The widely used OECD/Accenture typology distinguishes five types: circular supplies (renewable/recovered inputs), resource recovery (secondary raw materials from waste), product life extension (repair, refurbishment, remanufacturing), sharing platforms, and product-service systems (selling access or outcomes rather than ownership).
References
Five-model typology; distinguishing economics; remanufacturing cost/price evidence.
Access-over-ownership, life-extension and outputs-to-inputs strategies; three-principle framing.
Overview
What it means
Circular business models are the commercial engine of the circular economy: they turn circularity from waste management into strategy. Their distinguishing economics — per the OECD — are sparing use of resource inputs, revenue from access and performance rather than volume sales, value recovered from existing products and materials, and deeper supply-chain collaboration (reverse logistics, industrial symbiosis).
Remanufactured goods, for example, typically sell around 40% below new-equivalent price while retaining margins through material savings. The Ellen MacArthur Foundation frames the same shift as three strategies: sell access not ownership, extend product life, and turn outputs into inputs.
How it is used
Companies redesign offerings around leasing, take-back, refurbishment and resale; investors assess circular revenue shares; EU policy (Ecodesign for Sustainable Products Regulation, right-to-repair rules) pushes business-model change; reporting frameworks ask for circular transition plans.
Why it matters
Circular-economy targets fail without viable business models behind them; the CBM typology is the shared vocabulary for making circularity pay.