What does ‘circular economy’ actually mean?
An analysis traced how the meaning of "circular economy" has drifted since the term's origin, showing that despite its wide use in policy and industry, there is no single agreed definition.
Two academic studies coding definitions of the concept — one covering 114 definitions and a follow-up covering 221 more (335 combined) — found wide divergence across three dimensions: the core principles used to achieve circularity, the aims pursued, and the enablers (actors/mechanisms) relied upon to drive it.
Early formulations of circular-economy-adjacent thinking (closed-loop economy, cyclic economy) were defensive, framed around containing pollution, toxicity, and resource scarcity.
Contemporary definitions have shifted toward an offensive, growth-oriented framing that treats circularity as a competitiveness and value-creation strategy rather than primarily a harm-reduction one.
The analysis noted that explicit references to the waste hierarchy, social equity, and business-model innovation remain inconsistent or rare across the coded definitions, even though these are often assumed to be central to the concept.
Circular Economy: Origin and Core Definition
"Circular economy" was first used in its modern analytical sense by economists David Pearce and R. Kerry Turner in 1990, who described "closed feedback loops between natural resource stocks and the environment's capacity to absorb waste" — a break from the traditional linear economic model of "take-make-dispose." A circular economy instead aims to keep products, components, and materials in use for as long as possible through strategies such as reduce, reuse, repair, refurbish, remanufacture, and recycle, minimising virgin resource extraction and waste generation.
Key Details
- The concept is often summarised using the "R-framework" (commonly reduce, reuse, recycle, and extended variants adding refuse, repair, refurbish, remanufacture, repurpose).
- Academic coding of the concept's usage (114 definitions coded by Kirchherr, Reike & Hekkert in 2017; 221 further definitions coded by Kirchherr and co-authors in 2023) found systematic differences in how narrowly or broadly circularity is defined — some restrict it to recycling and waste management, others extend it to full economic-system redesign.
- The linear economic model it responds to is typically characterised as resource-intensive, waste-generating, and dependent on continuous extraction of finite natural resources.
The article's central finding — that "circular economy" carries genuinely different meanings depending on who is using it — stems directly from this documented divergence across the 335 coded academic definitions.
India's Circular Economy Policy Architecture: NITI Aayog and EPR Rules
India has operationalised circular economy principles primarily through NITI Aayog's sector-specific Circular Economy Action Plans and a series of Extended Producer Responsibility (EPR) regulations that make producers legally responsible for the end-of-life management of the goods they place on the market. NITI Aayog, in coordination with the Ministry of Environment, Forest and Climate Change (MoEFCC), constituted multiple working groups covering sectors such as e-waste, plastics, batteries, end-of-life vehicles, and used oil to draft these action plans, translating the abstract concept into sector-specific regulatory targets.
Key Details
- Battery Waste Management Rules, 2022 (notified under the Environment Protection Act, 1986) established an EPR framework for all battery categories (portable, automotive, industrial, EV), requiring producers to ensure collection and recycling/refurbishment of waste batteries and to use a minimum share of recovered materials in new batteries; the rules also bar landfilling and incineration of battery waste.
- Plastic Waste Management Rules, 2016 (as amended, including the 2022 EPR amendment) similarly impose EPR obligations on producers, importers, and brand owners of plastic packaging, requiring them to meet mandated plastic-waste collection and recycling/reuse targets tracked via a centralised EPR portal.
- NITI Aayog has continued to publish sector reports — including one in early 2026 on advancing circular economy practices for e-waste and lithium-ion batteries — projecting India's lithium-ion battery demand to rise steeply through the mid-2030s, underscoring the scale of the recovery infrastructure required.
India's EPR-based rules illustrate one specific, narrower operationalisation of "circular economy" within the broader spectrum of definitions the coded-definitions research identifies — one anchored in producer-driven material recovery rather than the more expansive systemic redesign some definitions envisage.
Growth-Oriented vs. Sufficiency-Oriented Framings of Circularity
Within the diverging definitions, a key fault line separates "growth agnostic" or "sufficiency" framings — which treat reduced material and energy throughput, not economic growth, as the goal — from "growth-focused" framings, which treat circularity chiefly as a route to new markets, competitiveness, and continued economic expansion (sometimes summarised as the debate between circular economy and "degrowth" perspectives). This distinction determines which policy tools a government prioritises: throughput-reduction measures (material caps, product longevity mandates) versus market-based recovery incentives (EPR, recycled-content mandates, green public procurement).
Key Details
- Definitions emphasising aims were found to reference environmental benefits and resource security more consistently than social equity or intergenerational fairness, indicating an underdeveloped social dimension in mainstream circular economy framing.
- Business-model innovation (e.g., product-as-a-service, leasing/sharing models that reduce ownership-driven consumption) was explicitly referenced in only a minority of coded definitions, despite being widely cited by practitioners as central to circularity.
The analysis's point that circular economy has moved from a "defensive" (pollution/scarcity-avoidance) to an "offensive" (growth/competitiveness) framing captures precisely this fault line, with implications for which policies — recovery mandates versus consumption-reduction measures — get prioritised in practice.
- Total coded academic definitions analysed: 335 (114 from Kirchherr, Reike & Hekkert, 2017; 221 additional from a 2023 follow-up study).
- Term "circular economy" first used analytically by Pearce and Turner in 1990.
- Business-model innovation referenced in only about 11% (2017 study) to roughly 21-27% (2023 study) of coded definitions.
- India: Battery Waste Management Rules notified in 2022; Plastic Waste Management Rules notified in 2016, with an EPR amendment in 2022.
- India's projected lithium-ion battery demand: from about 16 GWh (2023) to about 248 GWh (2035), per a NITI Aayog report.