The circular economy as a model for the future

Earth Overshoot Day comes earlier every year. This is the day when we have used up the renewable resources that the earth can regenerate in a year, after which we have to live on credit. While it was celebrated on September 23 25 years ago, this year it was already on July 24.Our global population isgrowing rapidly and itshunger for raw materialsknows no bounds.

Our linear “take-make-waste” model is reaching its limits: Natural resources are becoming scarcer, the mountains of waste are growing and the production of new materials generates enormous CO₂ emissions. According to the United Nations International Resource Panel, roughly 90 percent of global biodiversity loss and around half of all greenhouse gas emissions can be attributed to the extraction and processing of natural resources.

The shampoo bottle contains valuable crude oil, while the smartphone contains raw materials such as palladium, tantalum, tungsten and dysprosium. Batteries require zinc, manganese or lithium. And last but not least, construction waste: This is growing into the largest mountain of waste in Europe, harboring rare earths, steel, copper and natural stone. This is precisely where the circular economy comes in: it aims to minimize the use of materials, keep recyclable materials in circulation and massively reduce industry’s ecological footprint. The circular economy is thus much more than just recycling – it requires us to rethink design, production, consumption and policy. It also offers many opportunities: according to the Ellen MacArthur Foundation, circular principles could save European companies over 600 billion euros a year in material costs by 2030.

A bit musty, fatty, reminiscent of cardboard,” says Helen Haug as she puts her nose to a tube and sniffs. “That would be (E)-2-nonenal, a molecule that can be produced by the breakdown of fats.” A few seconds later, she notes “cheesy, sweaty” on her sheet – presumably butyric acid, which is formed by bacterial metabolism in waste. Then she writes “flowery, smells of violets” – and suspects beta-ionone, which is often found as a fragrance in cleaning products. At the end it gets really bad: skatol. This is a substance produced by microbial degradation in packaging recycling when food waste or biowaste is involved.

As a sniffer, Helen Haug investigates odorous substances. At the Fraunhofer Institute for Process Engineering and Packaging IVV in Freising near Munich, she investigates materials including plastic recyclates, i.e. materials that are produced when plastics are recycled – with the help of her nose. The tube through which the odor molecules flow is attached to a gas chromatograph: an analytical instrument that slowly heats a sample extracted from recycled plastic and then transports the odorants present in a gas stream to Helen Haug’s trained olfactory cells. The stream contains molecules the plastic has brought with it from its past life or that have first formed in the recycling process.

“Odor is a clear quality factor in recycling,” says the 30-year-old odor researcher, “especially if the material is to be used again later in an application intended for close use by consumers.” It is therefore a challenge to ensure recycling of the yoghurt container is technically stable and, above all, safe. But if it ends up smelling unpleasant, nobody will want to eat from it. Haug and her team are therefore investigating the odors in order to improve the properties of the recyclates. Some substances produced during recycling can even be harmful to health. The researchers at Fraunhofer IVV are also looking for these.

A while ago, Haug’s colleague Ludwig Gruber came across an unexpected culprit: burger wrapping paper. “It actually all looked harmless,” recalls Gruber, Head of Laboratory for Contaminants Analysis at Fraunhofer IVV. “But when we heated the paper together with water – which is what really happens in the microwave with a juicy burger – fluorotelomers were suddenly formed.” These inconspicuous molecules can degrade into PFAS, the “forever chemicals” that accumulate in the environment, have a toxic effect on the liver and are suspected of being carcinogenic. “This,” says Gruber, “is precisely why we always have to consider the real-life use when we test plastics: How are they going to be used? Where are the risks?”

Gruber’s specialty is mass spectrometric screening. The mass spectrometer is an analytical counterpart to Helen Haug’s sniffer port. Instruments like this can detect molecules that are not perceptible by their odors, so they can be precisely identified. The molecules are first separated from each other. The connected detector – the mass spectrometer – reveals their inner life: antioxidants, UV stabilizers from old garden furniture, dye residues from packaging films or decomposition products from the recycling process. “We compare the peaks from the analysis with a database of more than 80,000 substances,” says Ludwig Gruber. “This enables us to determine what is in the recycled material at concentrations below the parts-per-billion level.” Together with the odor tests, this establishes a double portrait of each plastic. This combination makes it possible to reliably assess whether a recyclate can actually be reused in the form of high-quality, safe products.

An important future-oriented topic at Fraunhofer is innovative solutions for the circular economy – from resource-conserving production and intelligent sorting methods to new recycling processes and bio-based materials. In the Waste4Future project, eight Fraunhofer Institutes pooled their expertise to improve plastic waste retention in the cycle. The flagship project considered the entire value chain from collection and sorting to mechanical and chemical recycling, solvent-based recycling and the evaluation of ecological and economic effects. The goal is to determine the best recycling route for different waste streams, developing a model for a sustainable circular economy.

One of the focal points of the project was the sorting of plastic waste. Georg Maier, Group Manager for Sensor-based Sorting Systems in the Visual Inspection Systems department at the Fraunhofer Institute of Optronics, System Technologies and Image Exploitation IOSB. “The crucial factor is clean separation,” says Maier. “Only if the waste streams are reliably separated by their type of plastic can they be turned into materials that meet the stringent demands of industry.”

To achieve these qualities, the team has established a prototype sorting plant that is testing various sensor technologies in the Waste4Future project. As most current recycling plants use infrared cameras, they reach their limits in problematic cases, such as with black or heavily aged plastics. “This is like looking into a dark room through sunglasses,” says Maier. “You simply can’t see anything.” These weaknesses can be overcome with new processes such as terahertz sensors: For the first time, black plastics can be reliably distinguished and cleanly separated from one another.

In initial practical tests, the Fraunhofer IOSB sorting system demonstrated the ability to differentiate even materials that are difficult to distinguish, such as black polypropylene and black polyethylene, both plastics that are frequently used in the automotive industry. Until now, these often ended up in low-grade applications after recycling because they had not been sorted cleanly enough. “If we can separate these materials cleanly, they can be reused for high-quality components,” says Maier. “This will enable us to keep more valuable raw materials in Europe.”

How much packaging is necessary, and how little is enough? This question is posed every day in the food industry, where millions of yogurt containers, films and bottles roll off the production lines. Every packaging item has several tasks: It protects the product from oxygen, moisture, light or germs and ensures safe storage and transportation, while at the same time not costing too much. “This is a tightrope act,” says Marek Hauptmann, Head of the Packaging and Processing Technology department at Fraunhofer IVV in Dresden. “If the container wall is too thin, it will not be stable enough for transport. If it is too thick, we are wasting valuable raw materials.” The situation becomes even more difficult if the packaging is to be recycled. The shampoo bottle quickly ends up next to the yogurt container, the cleaning agent runs out over the food residue, and dyes or mold create additional problems. For example, food packaging falls under sorting fraction 324, for which more stringent requirements apply than for other recycling products.

Furthermore heat can cause new substances to form during recycling, compounds that are undesirable and, in the worst case, toxic ones that have to be traced. Until now, packaging design has often been based on gut feelings and with large safety reserves. This is precisely why the KIOptiPack project applies artificial intelligence in production and evaluates data collected by sensors directly on the packaging lines: Forming pressures, sealing temperature or the gas atmosphere during processing and later in packaging.

Algorithms can detect relationships and make suggestions as to how machines should be operated to use the thinnest possible films with recycled content. Or which parameters have to be changed to achieve a stable sealing seam despite the reduced material. Hauptmann: “Previously, the material properties were constant. Now, the machine learns to differentiate precisely without compromising on safety.”

In the future, AI will not only suggest variants, but will also implement them directly in the machine controls in production environments. The result is a type of adaptive packaging technology that dynamically adjusts to different products and conditions. This saves packaging material. “Every tenth of a millimeter of film,” says Hauptmann, “means less plastic, less energy and less waste, multiplied millions of times.

At its core, the circular economy is actually an age-old idea with a new twist. For thousands of years, people worked with closed material cycles: Kitchen waste was used for fodder, materials were repaired or reused and nothing was lost. It was the industrial revolution that introduced the linear principle of “take-make-waste” – and with it our throwaway society. The circular economy then resurfaced on the scientific agenda in the 1970s.

David W. Pearce took up these principles in the early 1990s and explicitly coined the term “circular economy” as an alternative to the resource-intensive linear economy. However, little has changed since then: according to the 2024 Global Circularity Gap Report, only 7.2 percent of the world’s materials currently circulate in a closed loop. This is even lower than in previous years: in 2020, the rate was 8.6 percent and in 2018 it was 9.1 percent. The rest ends up as waste.

 This development is not only fatal from an ecological standpoint. It also poses economic risks. Supply chains are becoming increasingly fragile and geopolitical dependencies are growing, such as in the case of rare earths or lithium for batteries. The circular economy provides a strategic response to this: it can decouple resource consumption from growth and prosperity. The framework conditions for this were adopted by the EU in 2020 with the Circular Economy Action Plan. This plan stipulates that the circular material use rate in the member states must increase to 23.2 percent by 2030. 

But what if products were designed from the start so that they could be easily repaired, reused or recycled? This is exactly the goal of ZirkuPro, a research project of the Fraunhofer Institute for Mechatronic Systems Design IEM in Paderborn, working in collaboration with partners such as Miele, WAGO and Diebold Nixdorf. “Many products today are extremely sophisticated from a technical standpoint, but pose a real problem at the end of their service life,” says project manager Jan Luca Twardzik. “We want to think about recyclability right from the development stage instead of waiting until the product ends up in the trash.”

The approach is simple but effective: 80 percent of a product’s environmental impact is already predetermined in the design phase. Whether a device can later be repaired, reused or recycled therefore depends on decisions that are made long before production. ZirkuPro is therefore developing a set of tools to show engineers in the early development phase which materials and design methods are resource-efficient and which could cause problems later on. Data on the carbon footprint, energy consumption, recyclability and ease of repair are input directly into the development process.

The work in the project is practice-oriented. Research and industry partners meet regularly in workshops and test their ideas on real products, such as a modern, networked oven, a cash register system, an industrial touch panel and a component for electric car charging stations. Equipment like this is used to test how housings can be made from recycled aluminum, how electronic modules can be standardized and how components can be positioned so that they are easily accessible. Twardzik is intimately familiar with hurdles like these: “My washing machine at home stopped working because two carbon brushes in the motor were worn out. Cost: two euros. The repair would have taken ten minutes, but to get to it you had to turn the entire appliance upside down. Factors like these hinder repairs. Things end up in the trash.”

ZirkuPro not only examines technology, but also new business models. Because a simple repair is of little use if spare parts are too expensive or there are no return systems. The project is therefore also investigating service offerings, spare parts programs and reconditioning concepts. “Resources are finite. If we keep them in the cycle, companies and consumers win – and so does the environment,” summarizes Twardzik.

The Fraunhofer Institute for Manufacturing Engineering and Automation IPA is also working on designing products so that they can become a resource rather than a problem at the end of their service life. Under the motto of “Design for disassembly,” the researchers are developing design guidelines in a workshop to define, during the design phase, how devices or components can later be disassembled. Screws instead of adhesives, modular construction methods instead of integral components – principles like these make it easier to replace individual parts, recover valuable materials and reuse components.

The Fraunhofer Institute for Industrial Engineering IAO in Stuttgart is developing a digital tool that makes thecircularityand ecological footprintofvehiclecomponentsmeasurable as early as the concept phase. In the CYCLOMETRIC project, a model-based software was developedthat shows how material and design decisions affect thecarbon footprint, reusability and recyclability. An exam-ple is the center console in a car. This can be made fromdifferent fiber composites, connected together by screws,clips or adhesives. CYCLOMETRIC compares these variantsand immediately shows how each decision affects theenvironmental balance and costs. Sustainability is thusdirectly integrated in the development process. An initialprototype of the digital tool has already been implement-ed and will soon be transferred to industrial practice.

But digital tools can make a difference not only in thedesign process, but also in actual recycling. While CYCLOMETRIC and ZirkuPro are brining sustainability to the drawing board, the K3I-Cycling project shows howartificial intelligence can optimize the path from therecycling bin back into the cycle. A team at the FraunhoferInstitute for Integrated Circuits IIS is working on usingartificial intelligence and digital twins to im-prove plastics sorting. In the K3I-Cycling project, researchers have developed a system that virtually maps entirerecycling plants and simulateshow sensors, machines andmaterial flows interact. Jo-hannes Leisner from Fraunhofer IIS explains how thismeans that sorting process-es are no longer basedsolely on empirical knowl-edge, but can be optimizedbased on data – in realtime. The algorithms use multimodal sensors suchas X-rays or hyperspectralimaging to automaticallyrecognize the material, shape,weight and any missing itemssuch as batteries.

AI-supported systems controlvarious sorting mechanisms such asdiverters and robot arms and distribute airblasts to precisely separate the different plastics.A yogurt container goes to the left, an aluminum bowl tothe right. This combination of sensors and artificial intel-ligence ensures that high-quality recyclates are returned to the cycle. The goal is to separate plastics so precisely that they can be returned to industry as high-quality raw materials and do not have to be incinerated.   

The Fraunhofer Institute for Applied Polymer Research IAP is working on chemical recycling at the PAZ pilot plant center in Schkopau to enable plastic to be recycled as a raw material. “We convert plastic waste into it s original bui ld ing blocks (monomers) and recover them in this way,” explains project manager Marcus Vater, responsible for scale-up and pilot implementation. “The clean monomers can be processed into new, high-quality plastics.”

Specifically, Vater’s team is collaborating with industry to test processes for recovering terephthalic acid, the key molecule on which polyethylene terephthalate (PET) is based, from polyesters such as PET as known from drink bottles, textiles or plastic film. This is Fraunhofer IAP’s response to increasing legal requirements, such as the stipulation that PET packaging must contain up to 30 percent recyclate in the future. “We offer the technology platform to make this possible,” says Vater. “Here, industrial partners can test on a pilot scale whether their process actually works, and whether the material can be turned back into high-quality plastic products.” This reduces dependence on fossil raw materials, conserves resources and preserves material quality. Or as Vater puts it: “In an ideal future, plastic is not waste, but a recyclable material, and it will be recycled in an almost completely closed loop by 2050.”

Bioplastics made from straw and other plant residues – this was the idea behind RUBIO. 18 research institutions and industrial partners have demonstrated that agricultural byproducts can be used to produce a high-performance plastic that is climate-friendly and does not compete with food. At its core is polybutylene succinate (PBS): a bio-based, biodegradable polymer that can be processed like conventional plastic – but returns to natural cycles at the end of its life cycle.

What makes it special: RUBIO focuses on regional sources instead of imports. Straw or pulp from sugar production come from local agriculture. This biomass is broken down and is converted into monomers in a biotech process that uses microorganisms. Completely new types of PBS are synthesized from the monomers at Fraunhofer IAP. The process has already been transferred to the 100-kilogram scale at the Fraunhofer Pilot Plant Center PAZ in Schkopau. “We start with straw and end up with everyday products – it’s like spinning straw into gold,” says Antje Lieske from the Fraunhofer IAP. The project, which ran from September 2021 to August 2024, has now been completed. Many of the processes and products developed are being continued in new research projects and collaborative efforts.

The first marketable applications have been developed: Packaging films, recyclable monomaterial bags, nonwoven fabrics for textiles or paper coatings. These have withstood practical testing in modern machines, from tear resistance and barrier effects to workability. This process certainly had its hurdles: raw material purity, processing stability, surface defects – the researchers had to make constant adjustments. But the effort is worth it: RUBIO not only takes the bioplastic PBS to a new level, it also serves as a proof of concept for the circular economy – less CO₂, fewer fossil raw materials and more regional value creation. And it shows that the potential of biobased materials is growing – if science and industry work closely together.