FAQ

Find answers to key questions about why material tracking matters, how circularity is measured, and its connection to environmental sustainability.

Why is it important to track how materials are extracted, used and managed at end-of-life?

Material handling and use is responsible for 70% of global GHG emissions—but the impacts go far beyond this. Ultimately, material extraction and use is a strong proxy for environmental damage: it drives over 90% of total global biodiversity loss and water stress, for example. Therefore, tracking material extraction, use and disposal—with the aim of shaping a more efficient, circular world—is key to minimising environmental degradation.

How do we track material flows in an economy?

There are several techniques to quantify and track material flows. Our approach is based on two well established methodologies: Material Flow Accounting (MFAc) and Input-Output Analysis (IOA).

MFAc provides a systematic overview of inflows, outflows and stocks of actual materials, economy-wide and in all of their forms (including raw materials, manufactured products, emissions and waste). IOA, on the other hand, provides an overview of materials embodied in monetary transactions between economic actors. These are consistently reported in terms of raw materials—for example, the volume of timber ‘embodied’ in the making of a table that is purchased—thereby allowing materials to be traced across sectors and markets. By using both techniques, we ensure that material tracking is detailed and robust.

What does it mean to take a ‘consumption-based’ perspective?

This means that we measure material use at the place of consumption, instead of where extraction or production occurs. High-income economies, for example, tend to import more raw materials than export. This implies that they consume more materials than they produce, meaning that resource extraction is ‘externalised’ to other countries to fulfil their own societal needs. Our Circularity Gap Reports use consumption-based accounting to derive an economy’s Material Footprint. The same principle is applied to greenhouse gas (GHG) emissions to derive the more widely-known Carbon Footprint.

How is the Circularity Metric calculated?

The Circularity Metric, also known as Socioeconomic cycling, is the proportion of secondary materials out of an economy’s total material consumption (raw or primary material consumption plus secondary material consumption). The Circularity Metric represents the amount of technical and biological materials that remain within the technical cycle. All biological materials that are returned in any form (i.e. solid, liquid or gaseous) to the environment are considered by another indicator: Ecological cycling potential.

What data is used to calculate the Circularity Metric?

For each Circularity Gap Report, we combine global databases—such as EXIOBASE, IRP and Eurostat—with data from national and regional statistical offices. However, each country is different and therefore each Circularity Gap Report has a unique configuration of information. At the highest level, the data consists of information in physical units (for example, mass) and monetary units (for example, euros). At a more granular level, the data includes the extraction of raw materials, monetary value and physical volume of traded commodities, expenditure by industries and final demand actors (such as households, governments or capital investments), and all forms of release to the environment (in the form of waste, emissions or dissipative use, for example).

Do materials recycled abroad ‘count’ towards the Circularity Metric?

As we take a consumption-based perspective, we only credit recycling efforts occurring in a given economy. This includes materials an economy imports for recycling. Waste collected and prepared for recycling abroad is not included as part of the Circularity Metric. It may be less feasible for small economies to have domestic recycling facilities: this means they often have lower Circularity Metrics.

Why doesn’t the Circularity Metric include ecologically cycled biomass?

Biological materials that are returned to the environment (for example, through spreading on land) can only be considered circular if both carbon and nutrients, such as nitrogen and phosphorus, are guaranteed to be fully circulated. As of yet, there are methodological limitations to guarantee nutrient cycling. For this reason, only biomass that is ‘technically’ recycled—such as recycled wood—is accounted for in the Circularity Metric.

Is 100% circularity possible?

No, it is not feasible to achieve 100% circularity—as far as this is defined as a system that only consumes secondary materials. There is a practical limit to the volume of materials we can recirculate—in part due to technical constraints—and therefore also for the degree to which we can substitute virgin materials with secondary ones. Some products, like fossil fuels, are combusted through use and therefore can't be cycled back into the economy, while others are locked into stock, like buildings or machinery, and thus aren't available for cycling for many years. Products that can be cycled, such as metals, plastics and glass, may only be cycled a few times, as each cycle degrades quality. For these reasons, we will always need to use some virgin materials.

How does the Circularity Metric differ from Eurostat’s Circularity Material Use Rate (CMUR)?

Firstly, the Circularity Metric is a life-cycle indicator based on Raw Material Consumption (RMC), while the CMUR is an indicator based on Domestic Material Consumption (DMC). DMC represents the physical weight of material consumption and imports and exports, while RMC represents all the raw materials used for each component of the DMC, in terms of Raw Material Equivalents (RMEs). For example, a smartphone may weigh only a couple hundred grams, but requires far more resources to produce.

How do the results of the analysis link to national emission reduction targets?

Our scenarios model the extent to which circular economy strategies can reduce greenhouse gas emissions, taking a consumption-based perspective. National emission reduction targets (aligned with the Paris agreement) typically only address production-based emissions: emissions stemming from production activities within a country’s borders. This means that goals to achieve net-zero emissions do not consider emissions associated with production abroad for products that are then imported. Therefore, emission reduction targets of many countries should not be compared directly to the emission reduction potential calculated in the Circularity Gap Reports. However, it’s worth noting that many of the scenario results contribute to national emission reduction targets, although not all.

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