Realising Aotearoa New Zealand’s full potential: What will it take?
This report outlines a roadmap for transitioning to a circular economy in Aotearoa New Zealand. It identifies significant value loss in current linear systems and proposes a strategy based on coordinated leadership, a national framework, and durable regulatory settings to enhance productivity, resilience, and environmental health.
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OVERVIEW
We are nature
Aotearoa New Zealand is described as part of a reciprocal biological system rather than a set of separate entities. Spatial analysis research covering 117,000 New Zealand businesses from 2009 to 2022 demonstrates that healthier ecosystems are linked to measurably higher sales and profits. An increase in natural capital of just 1% was associated with 0.13% higher sales and 0.15% higher profitability across all sectors. In primary industry regions, the impact was more significant, with a 1% increase in natural capital associated with sales growth between 0.71% and 0.81%.
The cost of what we waste
New Zealand currently maintains a “take-make-waste” economic approach. The nation extracts 21 tonnes of natural resources per person annually, which is 60–65% higher than the global average. Approximately 60% of resource use is imported, including 100% of refined fuel and $1.5 billion in fertilisers annually. Identified as one of the highest waste generators per capita in the developed world, New Zealand sends 750 kilograms of resources to landfill per person each year. Only 15% of the 450,000 tonnes of plastic waste generated annually is recycled.
What is the circular economy for Aotearoa New Zealand?
The circular economy framework prioritises three principles: designing out harm, waste, and pollution; keeping resources in use at their highest value; and regenerating natural systems. Success is enabled by circulating financial capital, embedded technology, and applied Mātauranga Māori. The model distinguishes between biological cycles for organic materials and technical cycles for manufactured materials, aiming to prevent contamination and enable recovery.
A proven path for long-term value creation and resilience
The report advocates for “strong circularity,” which embeds a systems view into policy and planning to balance environmental, economic, social, and cultural value. This contrasts with “weak circularity” that focuses on end-of-life recycling and market-led entrepreneurism. While 75% of global business leaders view circularity as critical, and over 80% of New Zealand businesses agree, nearly half of domestic firms lack the confidence or tools to execute a transition.
Circularity already exists in Aotearoa
Pockets of circularity are present in Māori enterprises, regenerative producers, and community initiatives. A low-emissions circular bioeconomy could potentially add $22 billion to New Zealand’s GDP annually by 2035, increasing to $33 billion by 2050. Case studies include XLabs, which has trained over 351 organisations, with 88% implementing circular plans within 6–12 months of training.
By making the circular economy real, we make it actionable
The report provides a vision for circularity through the lens of everyday life: how we live, how we eat, and how we move. This approach aims to move circularity from a theoretical preference to a coordinated national system that improves productivity and reduces reliance on volatile imports.
How we live
Construction and demolition waste represents 69% of materials at levied landfills, with soil accounting for 78% of that volume. The report suggests redesigning products and infrastructure for disassembly and durability. New Zealanders saved approximately $844 million through reuse in 2025. Regulated product stewardship for textiles could generate a net benefit of $602 million by 2038 and increase sector employment by 6%.
How we eat
Current land use is dominated by monocultures, with 40% in exotic grassland and 8% in exotic forestry, while only 2% is dedicated to cropping and horticulture. New Zealand imports 64% of its domestic food needs. The vision for a circular food system includes local nutrient recovery, crop diversification, and by-product valorisation, such as upcycling whey into lactoferrin proteins or bread waste into flour.
How we move
Transport accounts for 36.3% of total emissions. Most privately owned vehicles are idle 90% of the time, yet require significant material extraction for production. Shared mobility could replace eleven private cars with one vehicle. By 2050, more than half of the global demand for battery materials like cobalt and lithium could be met by recycled secondary supply, representing a significant value capture opportunity for New Zealand.
Circularity through everyday life
A circular future integrates energy, water, and material flows. Examples include recovering forest slash for biochar, using manufacturing waste to generate biogas, and managing water in closed loops where wastewater systems capture nutrients and biomaterials for reuse. Decentralised renewable energy from farms could potentially power up to 75% of national electricity consumption.
We have momentum, we need transformation
Transformation requires shifting focus from quantity to value. Māori authorities and SMEs are identified as leaders in sustainable innovation. Four shifts are recommended to unlock circular models: designing capital for circular businesses, adjusting tax settings to even the playing field, using government procurement as a lever, and extending producer responsibility upstream.
Three recommendations to government
The roadmap includes three mutually reinforcing levers: 1. Establishing a Circular Futures Activation Group to coordinate industry-led workstreams. 2. Developing a National Circular Economy Framework to join up regional and industry plans. 3. Embedding circularity in policy, planning, and regulatory settings, such as the Emissions Reduction Plan and infrastructure planning.
Closing thoughts
The report concludes that a circular economy is a return to foundational principles, particularly the Māori worldview where everything taken from nature must be returned. It calls for cross-sector collaboration and durable leadership to treat circularity as vital economic infrastructure that unlocks New Zealand’s full potential.