Circular Transformation of Industries 2025

Circular feedstockArchetype 1 The economic value unlocked from circular feedstock solutions varies significantly depending on the material and product being recycled. In the past, circularity was mostly understood in terms of replacing virgin inputs with recycled materials.16 As a result, many industries have adopted circular feedstock solutions and recycled materials can be found in a wide range of products from bottles to large machines. More than 50% of businesses in the survey employ circular feedstock. Circular feedstock solutions are particularly urgent in industries and regions where either customers and regulators or both expect change. They are often more advanced17 in industries that generate large volumes of waste (especially from single-use plastics) due to short product life cycles, such as in the packaging, chemicals and fast-moving consumer goods industries. For example, the recycling rate for aluminium packaging in Lichtenstein, Estonia and Norway was as high as 100%, 97% and 94%, respectively, in 2021,18 showing the potential for recycling if effective infrastructure and policies are in place. Circular feedstock is also employed where the residual value of materials is high and subject to scarcity or price volatility. For example, end-of-life recycling rates for gold were around 86% in 2021,19 driven by its high value, limited supply and increasing demand within electronic and industrial applications. The surveyed businesses expect a positive impact of circular feedstock solutions three years from now, but the size of this effect varies significantly with the material or product being recycled. GHG emissions: Circular feedstock has the potential to reduce GHG emissions when the carbon footprint of the circular value chain is lower than that of extraction and disposal in the equivalent linear value chain. However, recycling for circular feedstock can have negative externalities, for example by releasing contaminants, so businesses should carefully assess the overall sustainability impact on a case-by-case basis. Overall, the survey finds that significant carbon emissions abatement can typically be achieved when reusing materials versus disposing of them in a landfill. There is another way to reduce carbon emissions, namely carbon capture and utilization (CCU), which can reduce and recycle carbon dioxide (CO2). It refers to the process of capturing CO2 emissions from sources like power plants and industrial processes, preventing it from entering the atmosphere, and utilizing it to create other products, such as fuels, chemicals or new materials. For example, enaDyne, a German start-up and Top Innovator of the World Economic Forum CCU UpLink Challenge, uses a cold plasma to transform CO2 into green chemicals and fuels, which are then used by industry and in transportation. Resilience: Especially in industries where long-term material capacity constraints are expected, using circular feedstock can strengthen resilience. By relying on materials that are already in circulation, businesses can reduce their dependence on raw material extraction, which can be subject to geopolitical, environmental and economic shocks. When recycled materials are supplied regionally, businesses additionally benefit from sourcing closer to manufacturing, which can enhance resilience and save GHG emissions. When and where materials are abundant, these solutions have a more limited impact on resilience, as is the case for some plastics in the packaging industry where the survey finds a less significant impact.20 Revenue: When customers, regulators or both demand sustainable usage of materials, circular feedstock is a prerequisite to remain competitive. It also has the potential to increase revenues, as it allows businesses to enhance demand among environmentally conscious customer groups. However, increased demand for recycled content does not always translate to higher prices; the willingness to pay a price premium for recycled materials is contingent on customers clearly understanding the value proposition. 1.1 The value of employing circular feedstock solutions Circular Transformation of Industries: Unlocking Economic Value 11