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Material Flow Accounting as a tool for tracking circularity at national and regional level in the EU
| News| 31/10/2017

Sergio SASTRE SANZ | ENT Environment & Management

Since the concept of Circular Economy was coined [1], the debates on this model have steadily grown both in academic and grey literature [2]. These debates range from the very definition and scope of the term “Circular Economy” [3] to the most operational side of the approach, such as best practices in specific economic sectors and business models [4]. Moreover, the Circular Economy model has had specific policy applications in China [5], the European Union [6], and other regions of the world.

Among the different issues and challenges the Circular Economy model faces, we find the question of how advances towards circularity should be tracked at different scales. In this sense, monitoring circularity at national and regional level is of great relevance in order to assess to what extent policies achieve significant results. This means measuring the performance of national economies in terms of, among other aspects, natural resource use and waste generation and recycling.

The monitoring of biophysical flows throughout national economies (i.e. natural resources entering in the form of raw and manufactured materials, being accumulated as stock, and disposed as waste) has been systematically addressed in the last decades. What we now call “circularity” has been so far tracked in the framework of resource efficiency policies [7]. In fact, there are several global online databases covering most of the world countries’ material, energy, water and land flow accounts [8]. These material flow accounts are of major interest for circular economy policies since these provide the basis for the measurement of the degree of circularity of the economies at macro level. The Circular Economy model for its part, expands the applications of material flow analyses by posing questions such as “What does a circular economy look like in biophysical terms?”. This question takes time to be answered, and there might not be a straightforward answer. However we can start with a first interesting exercise: taking a look at the current metabolic patterns of our societies and interrogating them in terms of circularity.

According to the first global approach to this issue, the earth’s economy does not seem to be following a circular path [9]. On the contrary marked linearity dominates the scene, with only 4 out of 62 Gt/yr of material inputs to the economy being recycled materials, resulting into 41 Gt/yr of outputs.

Taking a closer look at the EU Member States using Eurostat’s data [10], the situation is similar. We find that 71% of the inputs to the EU Economy in the last 10 years are non-metallic minerals (46%, mostly construction minerals) and fossil fuels (25%). Therefore a first interesting insight is that, at macro level, circularity has a lot to do with energy and the construction sector.

As for fossil fuels, a shifting towards renewable energies in order to substitute the yearly amount of 1,786 million tonnes of coal, oil, gas, etc. would have the potential to reduce up to 25% of materials inputs to the EU-28, which could be hardly made “circular” otherwise. In this sense, the circular economy at macro level is fairly synergistic with climate change policy although attention should be paid to reducing per capita energy consumption, since current energy consumption patterns in the EU might be unfeasible even from renewable sources [11].

Regarding construction minerals, circularity might involve a number of policies ranging from the rationalisation of new infrastructure, proper regulation of the private construction sector and enhanced construction and demolition waste recycling policies. A shift from the Keynesian complex of the EU countries in periods of crisis (i.e. investing in infrastructure in times of economic downturn), towards a “built stock management” focus should occur in order to curb the current 46% of the EU inputs to making the economy more circular.

Although focussing on the remaining materials is truly important, these two points are barely addressed within circular economy policies. However, ignoring them might entail discouraging results when it comes to measuring quantitative progress towards circularity at macro level, particularly from a material flow accounting view.

[1] We discussed the inappropriateness of the term “circular” when it comes to looking for a sustainable relationship between the economic process and ecosystems here:

[2] Ghisellini, P., Cialani, C. & Ulgiati, S., 2016. A review on circular economy: The expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 114, pp.11–32. Available at:

[3] Kirchherr, J., Reike, D. & Hekkert, M., 2017. Conceptualizing the Circular Economy: An Analysis of 114 Definitions. Resources, Conservation and Recycling, 127(April), pp.221–232.

[4] See, for example: Eirini Ioannou, Hanekroot, L. & Reijngoud, A., 2016. Benchmark Circular Business Practices: 2015 A comparative study of 52 Dutch listed companies, VBDO.

[5] Wu, H. Q., Shi, Y., Xia, Q., & Zhu, W. D. (2014). Effectiveness of the policy of circular economy in China: A DEA-based analysis for the period of 11th five-year-plan. Resources, Conservation and Recycling.

[6] Wysokińska, Z., 2016. The “New” environmental policy of the European Union: A path to development of a circular economy and mitigation of the negative effects of climate change. Comparative Economic Research, 19(2), pp.57–73.