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Role of Technology in Circular Economy

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Technology emerges as a driving force in shaping the Circular Economy in this evolving dance between progress and environmental stewardship.

Going beyond models of production and consumption, technology infuses innovation, transparency, and efficiency into practices at its core. These advancements pave the way for a future where resources are valued, waste is minimized, and ecosystems flourish.

What is a Circular Economy 

The circular economy is founded upon three design-driven principles: Eliminating waste and pollution, Circulating materials and products for their maximum value, and regulating the environment.

The circular economy model encourages the sharing, leasing, reusing, repairing, refurbishing, and recycling of used materials and products for the most significant duration feasible.

Thus, the lifespan of manufactured goods is prolonged. In practice, this means utilizing the products for maximum value and reducing waste to a minimum quantity. 

Organizations can significantly increase productivity and profits by transitioning systematically to a circular economy.

Role of Technology in Circular Economy 

The story of technology's entanglement with the Circular Economy echoes the evolution of human consciousness and our constant search for solutions.

It's a journey that began like a seedling, taking root in the 1970s as the environmental movement blossomed. Recycling technologies gained momentum, with pioneering machinery and processes paving the way for material recovery – the first tentative bridge between tech and circularity.

By the 1990s, responsibility took center stage with the emergence of Extended Producer Responsibility (EPR). 

Extended producer responsibility (EPR) focuses on the producer's responsibility for the impacts of their product in the final stage of its life cycle, after consumption, and gives producers a greater motivation to design products that minimize environmental and health impacts.

Recognizing the impact of product life cycles, EPR programs, often bolstered by technology, incentivized manufacturers to design and manage their products responsibly, encouraging circularity through mindful creation and end-of-life planning.

The 2010s ushered in a revolutionary phase with the introduction of blockchain technology.

This innovative approach tackled longstanding challenges in supply chain transparency, addressing traceability and accountability – crucial elements for promoting circularity by ensuring responsible sourcing and disposal.

By illuminating the product journey across every stage, blockchain empowers consumers to make informed choices and hold companies accountable for their practices.

But the story doesn't end there. 

Today, we find ourselves navigating a diverse ecosystem teeming with technological advancements fueling the Circular Economy:

AI-powered sorting robots: Like Recycleye's eagle-eyed AI sorters, these marvels significantly enhance recycling accuracy and efficiency, tackling the global waste crisis head-on.

Circular economy token systems: Some Platforms empower individuals with rewards and gamification, incentivizing sustainable choices and contributing to a circular future.

Digital marketplaces for second-hand goods and repair services: These platforms, facilitated by technology, extend the lifespan of products and promote repair over replacement, fostering a more mindful consumption culture.

These are just a few examples of the thriving technological landscape shaping the Circular Economy.

As we move forward, the future holds even more exciting possibilities, from advanced manufacturing techniques that minimize waste to intelligent, interconnected systems that optimize resource use across industries. Technology has become an indispensable partner in our journey toward a circular future, and its transformative power continues to blossom with each innovation.

How Technology Can Help Economy: 

Technology can contribute to the Circular Economy by harnessing digital innovations to establish an economic system that promotes resource regeneration through continuous reuse while minimizing waste.

Technology plays a role in promoting an approach to production, consumption, and waste management. It enables solutions such as blockchain, artificial intelligence, and waste-to-energy technologies.

1. Blockchain Traceability:

It works because blockchain provides a decentralized ledger that records every transaction and movement within a supply chain. All participants in the chain, including raw material suppliers, manufacturers, and retailers, contribute data to the blockchain. This transparent system ensures that the journey of a product can be traced accurately, promoting sourcing and efficient recycling.

2. Waste to Energy Innovations:

In terms of waste-to-energy technologies, processes are involved, such as incineration, anaerobic digestion, and pyrolysis. For example, incineration involves burning waste to generate heat converted into electricity. 

As per Wiki" 

Anaerobic digestion is a sequence of processes by which microorganisms break down biodegradable material in the absence of oxygen.  The process is used for industrial or domestic purposes to manage waste or to produce fuels. Much of the fermentation used industrially to produce food and drink products, as well as home fermentation, uses anaerobic digestion.


Anaerobic digestion utilizes microorganisms to break down waste into biogas. These innovative technologies contribute to circularity by converting waste into energy and reducing resource reliance.

3. AI-Driven Circular Design:

In this case, artificial intelligence analyzes datasets related to product design materials and recycling processes. Through machine learning algorithms that identify patterns and correlations in the data, AI enables the creation of products aligned with 'circular economy' principles.

This involves creating products that can be quickly taken apart using environmentally friendly materials for recycling and integrating components that can be effortlessly repaired and upgraded.

In this age of awareness, technology emerges as a valuable companion in redefining the conventional linear economy and transitioning it into a circular and sustainable model. The harmonious relationship between innovation and sustainability drives a change, paving the way for an era where technology is pivotal in pursuing a circular economy. 

Let's explore how technology goes beyond a tool and becomes a driving force in reshaping our resource utilization and waste management approach.


The green revolution emerged in the century as a response to growing environmental concerns and the need for sustainability. The limitations of the "take make dispose" model prompted a search for alternatives, leading to technology playing a role in shaping the circular economy.

Progression from Basics to Platforms (1990s 2000s):

In the 1990s, Environmental Management Systems (EMS) gained prominence, enabling companies to incorporate considerations into their operations. This marked an integration of technology for environmental management.

With the advent of the internet in the 2000s, digital platforms started connecting stakeholders involved in solutions. This facilitated access to marketplaces for second-hand goods, repair services, and rental models, laying the foundation for technology-driven behavior change.

Technological Innovations Driving Circularity (2010s Present):

The past decade has seen advancements that have fueled circularity. Blockchain applications have emerged as supply chain tracking and waste management tools, ensuring sourcing and material recovery.

Utilizing technology to support the circular economy centers around harnessing solutions to establish a closed-loop system.

In an economy, the traditional linear model of taking resources, making products, consuming them, and throwing them away is replaced with a system that aims to reduce waste, encourage recycling, and prolong the lifespan of products and materials. 

The century's green revolution laid the foundation for today's economy, which emerged in response to the need to move away from the wasteful "take, make, dispose" approach. Technology has played a role in this transformation, progressing from environmental management systems (EMS) in the 1990s to digital platforms encouraging collaboration and behavior change in the 2000s.

Major Technologies for Circular Economy

1.Using Blockchain for Transparency in Supply Chains:

By employing technology, supply chains can become more transparent and traceable. Every step of a product's journey is recorded.

So, starting from extracting materials to manufacturing and distribution, everything is recorded on a blockchain ledger. This allows consumers and businesses to verify the legitimacy and sustainability of products. 

Utilizing this technology, we can achieve traceable supply chains, ensuring that product origin and life cycle are well documented. This promotes accountability and facilitates efficient recycling and reprocessing, contributing to a circular economy.

2. Utilizing the Internet of Things (IoT) for Monitoring Product Lifecycles:

IoT devices embedded in the product or its packaging continuously gather data throughout its lifecycle. These IoT sensors collect real-time information during manufacturing, usage, and eventual disposal. Such data is precious as it helps optimize processes, predict maintenance requirements, and enable material recovery during recycling.

Presently, IoT is regarded as an indispensable component of a circular system. This capability empowers organizations with enhanced visibility into their supply chains, facilitating improved control and innovation prospects.

Additionally, it reduces the generation and processing of data necessary to meet the intricate requirements of circular supply chains, including material tracing, reverse logistics, decentralized production, and remanufacturing.

3. Implementing Artificial Intelligence to Automate Waste Sorting:

Waste management facilities employ AI-powered machines equipped with IoT sensors. These machines utilize machine learning algorithms to identify and sort the types of materials present in the waste stream. Automating sorting operations enhances recycling efficiency, leading to quality recycled materials.

4. Revolutionizing Product Design with AI:

Artificial Intelligence (AI) is revolutionizing the field of product design by optimizing for principles. We can create easily recyclable, repairable, and resource-efficient products by analyzing data using AI algorithms. This technological transformation promotes consumption and production patterns within our society.

Consider the issue of contamination during waste collection.

Manually sorting various categories of mixed materials into their respective channels is laborious and potentially costly.

Sensor-enabled bins can organize recycling into the correct streams by identifying, sorting, and crushing various materials to reduce waste and recirculate materials. The forward progression of blockchain tracing technology is expected to enhance the complexity of material identification further. 

5. Augmented Reality (AR) and its Impact on Consumption:

AR applications empower consumers to make choices that align with sustainability. By using AR-enabled devices for products, consumers can easily access information about a product's impact, recyclability, and the availability of recycling facilities. This promotes consumption and encourages support for environmentally friendly products.

6. Innovative Solutions for Waste to Energy:

Technologies offer ways to convert waste into valuable energy sources, presenting an innovative approach to circularity. From energy recovery through incineration to groundbreaking bioenergy solutions, technology plays a role in transforming waste into a resource, aligning with the principles of a circular economy.

7. The Role of 3D Printing in On-Demand Manufacturing:

3D printing technology revolutionizes manufacturing by enabling on-demand production at localized levels. Instead of producing goods and transporting them over long distances, products can be manufactured closer to where they are needed. This approach reduces the carbon footprint associated with transportation and minimizes inventory.

8. Circular Economy Platforms; Enabling Material Exchanges:

Digital platforms play a role in facilitating the exchange of materials among businesses. These platforms allow companies to sell or donate surplus materials, promoting an approach to resource utilization. By creating a marketplace for transactions, these platforms effectively reduce waste. Encourage the reuse of materials.

9. Smart Packaging; Optimizing Recycling Practices:

Smart packaging solutions leverage technology to enhance recyclability. For instance, including RFID tags or QR codes on packaging provides information about the materials used and recycling methods. Such smart packaging initiatives actively encourage consumers to participate in recycling efforts. 

10. Data :

Details regarding its composition, condition, and design are critical to preserving the economic value of a product for the most extended period.

An end-of-life product may be transformed back into a valuable resource with the aid of this data. With proper information about a product ( and waste), this waste can become an adequate asset. With various technologies, we can now collect data about the product, including its usage, storage, etc.

That is to say, we can get data about the product's lifecycle. By analyzing this information, we can plan to reuse, rebuild, or break the product after its lifecycle and reuse various input materials that went into the creation of the product.

This data can also help us in reselling the product on the marketplace. These marketplaces allow secondary material suppliers and buyers to find each other online.

Thus, the Circular Economy system substitutes the "end-of-life" approach with the reduction, reuse, recycling, and recovery tenets.

Although organizations must transition from a linear to a Circular Economy-oriented approach, challenges such as insufficient data availability and integration frequently hinder this transformation at the firm and ecosystem levels. As a result, digital transformation becomes a crucial step towards Circular Economy. 

The integration of Circular Economy into digital systems is inextricably linked to advancing predictive analytics, tracking, and monitoring across the entire product life cycle for businesses.

Designing for circularity with data-driven insights can enhance products' economic and environmental sustainability by optimizing resource utilization. 

Applying predictive and prescriptive machine learning insights, such products, their subcomponents, and associated processes can be designed and optimized per Circular Economy principles.

Demand and inventory management can be improved using historical and real-time data, reducing waste and promoting sustainable operations.

Digital technologies can mitigate waste by evaluating optimal strategies for remanufacturing and recycling. AI-based image recognition, for instance, can facilitate electronic waste recycling.

Enhanced Features of How Technology Supports the Circular Economy

1. Blockchain-Powered Tokens for the Circular Economy:

Some innovative initiatives introduce tokens based on technology tied to circular economy practices. Individuals engaged in recycling or choosing eco products can earn these tokens.

These tokens have applications, such as accessing discounts and exclusive products. Even contributing to social and environmental causes.

2. Utilizing Machine Learning for Predictive Maintenance:

In circular economy practices, machine learning algorithms enable maintenance that ensures the upkeep and repair of products, particularly durable goods. This approach extends their lifespan and reduces the need for disposal.

3. Lifecycle Simulation with Digital Twins:

Digital twin technology creates replicas of products, enabling businesses to simulate and analyze a product's entire lifecycle in a digital environment. This empowers companies to identify improvements, optimize processes, and assess the impact throughout the product's journey.

Benefits Offered by Technological Support for the Circular Economy:

1. Enhanced Resource Efficiency:

Technology plays a role in optimizing production processes, reducing waste generation, and promoting material recycling. This contributes significantly to building a resource-efficient economy.

2. Promoting Transparency and Accountability:

Digital technologies like blockchain enhance transparency and accountability within supply chains by providing traceability mechanisms.

Consumers can track the origins and life cycle of products, empowering them to make decisions that align with the principles of an economy.

Innovation and the emergence of business models are fostered by integrating technology into economic practices. This allows companies to explore product design, manufacturing, and consumption approaches, resulting in a dynamic and adaptable economic landscape.

The circular economy significantly reduces its impact by harnessing AI, IoT, and blockchain technologies. Automated waste sorting, sustainable material choices, and efficient supply chain practices minimize pollution and conserve our resources.

Advantages of Technology in Promoting Circular Economy

1. Benefits for the Economy and Job Market:

Using technology in circular economy practices opens up opportunities and generates jobs. As new technologies emerge and are implemented, a growing demand for professionals in data analytics, artificial intelligence, and sustainable design leads to growth.

2. Enhanced Global Collaboration and Knowledge Exchange:

Digital platforms and interconnected technologies facilitate collaboration and knowledge sharing in advancing circular economy objectives. Businesses, researchers, and policymakers can exchange insights, best practices, and innovative ideas, fostering an ecosystem dedicated to sustainability.

3. Empowering Consumers:

Technology empowers consumers to make choices. Access to information regarding a product's lifecycle, recyclability, and sustainability attributes enables consumers to align their purchasing decisions with circular economy principles.

Other Relevant Concepts in the Role of Technology in Circular Economy

1. Platforms for Extended Producer Responsibility (EPR):

EPR platforms leverage technology to streamline the management of end-of-life responsibilities for products. Producers can use these platforms to track their product collection and recycling processes, promoting a sustainable product design and disposal approach.

2. Circular Design Principles:

Technology plays a role in implementing design principles that focus on creating more accessible products to disassemble, repair, and recycle.

Designers utilize tools to simulate the impact of various design choices, ensuring that products adhere to the principles of a circular economy right from their initial stages.

3. Collaborative Robotics in Recycling Centers:

Recycling centers use robots, also known as cobots, to aid in sorting and processing materials. These robots work alongside operators to improve efficiency and reduce the labor required for recycling operations.

Examples Demonstrating Technology's Impact on Circular Economy

1. Recycle: Robotic Sorting System Powered by AI

Recycle, a company based in Europe, leverages intelligence to enhance waste-sorting processes. Their robotic system powered by AI can accurately sort various types of materials found in waste streams.

Doing so improves recycling efficiency while minimizing contamination. According to the World Bank, this technology is crucial for tackling the growing waste crisis, estimated to reach 2.01 billion tonnes by 2050.

Recent Development: In October 2023, Recycle partnered with Veolia, a leading waste management company. Their objective is to deploy AI sorting systems across facilities throughout Europe. This collaboration aims to increase recycling rates and contribute towards establishing a circular economy.

Analogy: Visualize Recycleye AI as a sorter within a recycling facility who swiftly and accurately separates materials for recycling purposes.

Having just one sorter picture, a whole team of AI-powered robots tirelessly work together to ensure that valuable resources are recovered and diverted from landfills.

2. Circularise: Enhancing Supply Chain Transparency with Blockchain

The Netherlands-based company Circularise utilizes technology to bring transparency to supply chains. Their platform enables companies to trace the origin and lifecycle of materials and products, from raw material extraction to disposal or recycling.

This transparent approach fosters trust among stakeholders and promotes sourcing practices.

Recent Development: In November 2023, Circularise introduced a feature on its platform that allows consumers to scan product codes and access information about the product's sustainability credentials. This transparency empowers consumers by enabling them to make choices and support brands committed to circularity.

Analogy: Think of Circularise technology as a passport for products, providing a clear and reliable record of their journey from origin to disposal. Just imagine scanning a product's barcode and instantly gaining access to a history showcasing its materials, manufacturing process, and environmental impact. This level of transparency plays a role in building a sustainable future.

3. Plastic Bank: It identifies vulnerable coastlines worldwide that need plastic collection infrastructure, empowers local entrepreneurs to establish collection branches in convenient locations, helps gather collection communities together, and stops plastic before it enters the ocean.

4. TerraCycle : It is a recycling company in 'hard to recycle' material. 

5. Recyclebank: They have connected recycling with fun and rewards. They have created a platform that gamifies recycling, allowing users to earn points for recycling and redeem them for discounts and rewards at various retailers. 

6. Rubicon Global: They monitor waste generation in real-time, and with technology's help, it optimizes waste collection and disposal processes.

7. Loop: It focuses on reusable packaging for commonplace Products. They have formed strategic alliances with industry leaders in consumer goods to develop a system that delivers products to customers in reusable packaging.

Following consumption, the packaging is retrieved, sanitized, and refilled in preparation for subsequent uses. This novel methodology eradicates the wastage associated with single-use packaging and promotes a transition towards a circular and sustainable economy.

Using these technologies, we can strive towards an economy where resources are utilized for as long as possible, minimizing waste and reducing our environmental footprint. We anticipate positive progress towards a more sustainable future as these technologies advance and gain acceptance.


In the realm of progress, integrating solutions into the circular economy is no longer just a choice but a necessity. The evolution of how technology can contribute to the economy signifies a journey toward sustainability, efficient resource utilization, and a harmonious coexistence with our planet.

As we confront the century's challenges, the circular economy supported by cutting-edge technologies emerges as a beacon of hope. Its benefits are improved resource efficiency, enhanced transparency, increased innovation, and a decreased environmental impact.

With each technological leap, we move closer to a future where the traditional "take, make, dispose" model gives way to a circular approach.

While embracing the era, we must acknowledge technology's role in shaping a circular economy that sustains businesses and safeguards our planet for future generations. It goes beyond adopting technologies; it requires collective dedication to forge a path where progress seamlessly aligns with sustainable principles.

The path to achieving an economy fueled by technology is more than reaching a goal. It represents an obligation to build a world where we value resources, minimize waste, and let innovation drive us toward a circular future.


This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.

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