The circular economy explained

In a time of growing climate change and waste problems, the link between a circular economy and sustainability is clear. But how exactly does it work? On this page, we’ll explain the meaning of a circular economy and how you can adopt circular principles in Ireland.

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Circular design, sometimes called sustainable design, is the practice of designing products, services, and systems with the entire lifecycle in mind – from how materials are sourced to how the product will be reused, repaired, or recycled in the future. Instead of creating something to be used once and then thrown away, circular design aims to keep products and materials in use for as long as possible, with minimal waste.

In recent years, Ireland’s transition to a more sustainable future has been supported by a growing circular economy programme. The Waste Action Plan for a Circular Economy, launched in 2020, outlined over 200 actions aimed at shifting Ireland away from the linear take-make-waste model, including: 

• Reducing landfill and incineration, including setting national targets to divert more waste towards recycling and composting.

• Improving recycling systems, including standardising recycling bins across the country and supporting innovation in recycling technologies.

• Funding reuse and repair initiatives, including repair groups, tool libraries, and community-based initiatives.

• Encouraging producers to take greater responsibility for the environmental impact of their products.

Formally called the Circular Economy and Miscellaneous Provisions Act 2022, this is Ireland’s first dedicated piece of legislation to support the transition to a circular economy. It was signed into law in July 2022 and builds on the foundations set out in the Waste Action Plan for a Circular Economy.

It provides powers for several key measures, including bans on certain single-use packaging (part of Ireland’s goal to become one of the first countries to phase them out entirely), mandated waste segregation, charges for commercial waste. It also established the Circular Economy Fund, which supports circular projects at both local and national levels.

The Act aligns with broader EU policy on sustainability, waste reduction, and circular product design. Circular economy initiatives are now incorporated into Ireland’s wider economy strategy on resources, energy, transport, and climate change.

Over time, businesses can reduce costs if products last longer and can be repaired or reused. Households may also save by buying second-hand or avoiding unnecessary purchases, while businesses can benefit from lower costs on raw materials, energy, and waste disposal.

Although circular economy management may involve upfront investment, such as upgrading recycling facilities,  it can result in long-term economic savings.

As global challenges such as climate change, resource scarcity, and environmental impact continue to grow, Ireland and countries worldwide have begun to explore more sustainable models. Here’s why adopting a circular economy matters

In a linear economy (the opposite of a circular economy), most products are designed for short-term use and end up as waste, leading to overconsumption and overflowing landfills. In a circular economy, products are designed to last longer and be reused, repaired, or recycled, which can reduce waste and pollution.

Producing and disposing of some materials contributes to global greenhouse gas emissions. Studies show that plastics alone are responsible for 3.3% of emissions worldwide. By utilising recycled materials and minimising overproduction, this approach lowers emissions across supply chains and eases pressure on natural resources.

Circular activities, such as repair and refurbishment, tend to be labour-intensive and difficult to outsource. As a result, they have the potential to create local jobs, particularly in community-led initiatives like repair cafes or tool libraries.

Circularity can prompt businesses to reassess how products are designed, manufactured, and delivered, leading them to develop innovative solutions, adopt cleaner production methods, and explore alternative business models. This can give businesses a potential competitive edge in an increasingly sustainability-focused market.

Economies that rely on finite resources and global supply chains may be vulnerable to shocks such as price surges and raw material shortages. Reuse and recycling can reduce dependency on virgin resources and long supply chains.

In Ireland, applying the circular economy means rethinking how people design, use, and dispose of products, with a focus on keeping resources in use for as long as possible. While it can involve changes and buy-in from businesses and governments, there are a number of practical ways that individuals and communities can adopt circular principles.

One of the easiest ways to take part in the circular economy is by shopping at charity shops, vintage stores, markets, or online platforms like eBay or Vinted. Buying used furniture, electronics, books, or clothes in this way can reduce the amount that ends up in landfill. Plus, you can often grab a bargain!

Another core principle of circular living is repairing items instead of throwing them away. This might mean mending a hole in your jumper or repairing your toaster to keep products in use for longer. Many communities now have repair cafes that can help give everyday items a second life, or you could learn some simple repair skills at home so you’re able to do it yourself.

Reducing waste begins with limiting what is produced in the first place. Avoiding single-use plastics, buying in bulk, and opting for loose produce over pre-packaged food items can all help reduce unnecessary packaging and collectively lower the volume of waste entering the system.

Some companies are shifting to circular business models that prioritise reuse, repair, and recycling. The circular economy can be strengthened by supporting these businesses, for example, a clothing brand that offers take-back and repair services, or an electronics company selling refurbished products. Supporting local initiatives, such as tool libraries or zero-waste shops, can also have a positive impact on communities and local jobs.

If you’re exploring alternative investments, directing capital towards businesses that support sustainability can also help finance the transition to a circular economy. This might mean investing in green bonds or sustainable index funds, or finding a pension provider that offers ethical or ESG investment options. Impact investing allows investors to earn financial returns while supporting positive social and environmental change.

Adopting circular economy principles on a day-to-day basis is often a long-term approach, and the same mindset can be applied to your finances. With Raisin, you can grow your savings by easily comparing and opening high-interest deposit accounts from trusted European banks – all in one place, with no fees.