CIRCULAR ECONOMY & POLICIES:

FUNDAMENTALS & APPLICATIONS IN

THE ENERGY SECTOR

The Energy Club | Parv & Ruchir IIT Bombay

 WEEK 1
DAY 3
THE TECHNICAL CYCLE OF
THE BUTTERFLY DIAGRAM
The Energy Club IIT Bombay
The Technical Cycle
 THE BUTTERFLY DIAGRAM:
TECHNICAL CYCLE
The diagram shows smaller inner loops surrounded by larger outer loops. Inner loops
capture more value by retaining a product's embedded value, like a working
smartphone being worth more than its parts. Prioritizing inner loops—sharing,
maintaining, and reusing—over outer loops saves costs for customers and businesses
by utilizing existing products and materials, avoiding the need to create new ones.
The outermost loop, recycling, is therefore the stage of last resort in a circular
economy, because it means losing the embedded value of a product by reducing it to its
basic materials.

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 MANUFACTURING PRODUCTS IN
ACCORDANCE OF THE CIRCULAR ECONOMY
Working from the innermost loop, it is important to bear in mind from the outset that
each of these steps will work best if the products are designed for that step. That
may mean making items intended for sharing or reuse more durable so they
withstand intensive use, it may mean designing products so that they can easily be
repaired, designing them to be modular so components can be replaced and
remanufactured, or designing products with materials that can easily be separated
for recycling. It is also important to design for multiple loops, for example making a
repairable product from recyclable materials.

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 SHARING
Sharing is the first step in the technical cycle, significantly increasing the utilization of many
products. For example, the average power drill is used for only 13 minutes in its life, yet
many own one. Community tool libraries, like the Toronto Tool Library and Makerspace,
enable sharing, offering subscribers access to high-quality tools and reducing home clutter.
Such libraries are emerging globally for various products. Sharing extends beyond tools to
clothing, with shared wardrobes, car-sharing systems in cities worldwide, and platforms like
Airbnb for spaces. Additionally, insurance companies now offer micro-insurance for those
listing items on peer-to-peer platforms, addressing concerns about potential damage. This
broad approach to sharing enhances product utilization and supports a more sustainable
economy.

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 FURTHER READING

https://www.ellenmacarthurfoundation.org/articles/six-
chinese-fashion-platforms-that-let-you-share-what-you-
wear

https://www.ellenmacarthurfoundation.org/circular-
examples/creating-trust-in-the-sharing-economy-omocom

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 MAINTAINING
If sharing is a way to increase the intensity of product use, another way to maximise the
value of a product is by prolonging its usable life. Maintenance is an important way of
keeping products at a high quality and guards against failure or decline.
When you think about maintenance, you might think about taking a car for a service, or
shoring up your home against the elements, but maintenance can be applied to most
products that suffer wear and tear. For example, ‘Clothes Doctor’ empowers people to
look after their clothing by sharing knowledge about care and maintenance.
Further Reading:
https://www.ellenmacarthurfoundation.org/circular-examples/clothes-doctor

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 A STILL CLOSER LOOK AT THE TECHNICAL
CYCLE
Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 REUSING
The next loop in the technical cycle is reusing. Like sharing and maintaining, this step keeps
products in use in their original form and for their original purpose. Reuse business models
are cropping up all over the economy, notably in packaging. Reusable packaging is one of the
most effective ways of tackling packaging waste, particularly plastic, and is being adopted
by businesses across industries, from food and drink to cosmetics and home cleaning.
Another booming reuse industry is in clothing. More and more people are selling their
unwanted clothing and buying clothes from resale platforms, often at a fraction of the cost
of buying new. This displaces the need for a new item to be made and stops an unwanted
item going to waste.

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 FURTHER READING

https://www.ellenmacarthurfoundation.org/circular-examples/an-
industry-wide-shared-packaging-system-swedish-return-system
https://www.ellenmacarthurfoundation.org/reuse-rethinking-packaging

https://byhumankind.com/pages/how-bh-works

https://www.ellenmacarthurfoundation.org/circular-
examples/dissolvable-cleaning-tablets-everdrop

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 REDISTRIBUTING

Redistribution is another way to keep products in use and stop

them becoming waste. By diverting products from their intended
market to another customer, the product is put to valuable use.
For example, a fashion brand could redistribute unsold clothing
from one store to another.

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 REFURBISHING
Returning products to good working order is a way to restore their value. This could include
repairing or replacing components, updating specifications, and improving cosmetic appearance.
Refurbishing can be carried out by individuals on their own products, or by specialists. The Right to
Repair movement aims to make changes to regulations so that products are designed in a way that
makes it possible for users to repair them by themselves.
There are countless examples of companies working to keep products in use through refurbishment.
A good example is in the tech industry, where there are many companies buying up used items such
as mobile phones, refurbishing them, and selling them on at a fraction of their original price.
Further Reading: https://www.ellenmacarthurfoundation.org/circular-examples/collection-
refurbishment-and-resale-of-mobile-phone-handsets

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 REMANUFACTURING
The next stage of the technical cycle is remanufacturing, which involves re-engineering
products to as-new or improved condition, with warranties equivalent to or better than new
products. This process requires more investment than inner loops but prevents products from
becoming waste. Remanufactured items remain in the economy, saving costs for businesses
and customers. China, prioritizing the circular economy since the late 2000s, has designated
vehicle remanufacturing as a strategic sector. This approach ensures that products and
components continue to be utilized efficiently, supporting sustainability and economic benefits.

Further Reading: https://www.ellenmacarthurfoundation.org/circular-examples/advancing-

vehicle-remanufacturing-in-china-the-role-of-policy\\

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 RECYCLING
The final step in the technical cycle is recycling. This is for when a product can no longer be
used and is beyond refurbishment or remanufacture, or isn’t suitable for those steps.
With recycling, the embedded value of a product – the time and energy invested in making it – is
lost, but the value of the materials is retained. Recycling means transforming a product or
component into its basic materials or substances and reprocessing them into new materials.
Designing for recycling is important for all products in the technical cycle, but especially for
items that are not suitable for the other steps in the cycle. These items include single-use
packaging, which is itself only appropriate when it cannot be designed out and reusable
alternatives are not possible.
Further Reading: https://www.ellenmacarthurfoundation.org/circular-examples/sprite

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 REFERENCES

https://www.ellenmacarthurfoundation.org/circular-
economy-diagram

https://www.ellenmacarthurfoundation.org/articles/the-
technical-cycle-of-the-butterfly-diagram

Presentation by The Energy Club | Technical Summer School | 2024 | IIT Bombay
 THANK YOU

The Energy Club | Technical Summer School IIT Bombay