What is a circular economy

A circular economy designs out waste and pollution, keeps resources in use, and regenerates natural systems. It focuses on reuse, repair, and refurbishment, maximising value while reducing waste. Australia, producing 2.95 tonnes of waste per person annually and recycling only 4.6% of materials, lags behind the global average. Incremental improvements could substantially enhance resource security and sustainability.

Circular solutions for today’s issues

Circularity can address pollution, biodiversity loss, and climate change while generating economic growth. Australia is only 4% circular compared to a 7% global average. Transitioning could add up to AUD210 billion to GDP and create 17,000 full-time jobs by 2047–48. Early adopters gain cost and innovation advantages, while laggards risk competitiveness as international standards tighten.

Circular practices also support biodiversity restoration. For example, food waste in Australia occupies land equivalent to Victoria. Circular systems reduce waste, pollution, and greenhouse emissions—28 million tonnes of waste went to landfill in 2020–21, and 130,000 tonnes of plastic entered oceans annually.

The power of National Policy Leadership

Australia’s 2022 ministerial commitment to a circular economy requires a unified national framework. The report recommends developing a National Circular Economy Policy Framework with measurable targets and clear priorities to prevent fragmented efforts. It identifies five priority industries: mining, construction, manufacturing, agriculture, and resource recovery. Metrics such as material footprint, productivity, and recovery rates should guide progress.

The framework should integrate circularity across government policies—particularly climate, trade, and innovation—and include sector-specific transition strategies reviewed regularly to adapt to emerging opportunities.

Transforming Supply Chains Through Targeted Regulation

A circular economy needs consistent national standards. The report advocates harmonising circular economy rules to remove jurisdictional inconsistencies, lowering production costs and enabling efficient national supply chains. Better product stewardship, durable product design, and clear labelling will promote informed consumer choices and innovation.

Unlocking Competitive Markets

Australia’s circular innovation capacity can be strengthened through coordinated public investment. Clear priorities in government research and commercialisation programs, combined with challenge-based funding such as “Future Made in Australia,” will enhance competitiveness and attract private investment.

Circular Economy As A Corporate Advantage

Embedding circularity into environmental, social, and governance (ESG) frameworks can help businesses manage climate risks and identify new opportunities. Circularity drives cost efficiencies, aligns with investor expectations, and supports sustainable long-term value creation.

Building Tomorrow’s Workforce

The report calls for defining and developing circular economy skills to prepare workers for emerging industries. Education and training programs must integrate sustainability principles to ensure workforce readiness across all regions.

Accelerating Place-Based Transformation

Regional and precinct-level initiatives can drive local circular economies. Local transition brokers should coordinate these efforts, ensuring they align with community priorities and leverage regional strengths.

Empowering Consumers And Community

Consumer participation is essential. Awareness remains low—46% of Victorians have never heard of the circular economy. Clear sustainability labelling can influence purchasing decisions; 59% of EU consumers reported they would make greener choices with transparent information. The report recommends improving consumer education, product labelling, and literacy to promote sustainable behaviours.

Built Environment

Actions include developing a national built environment circular strategy, embedding end-of-life design into the National Construction Code, and promoting low-carbon materials through certification standards.

Food And Agriculture

The report suggests leveraging existing agricultural programs, supporting small to medium enterprises (SMEs), and integrating ESG standards to enhance circularity and cut supply chain emissions.

Resources

Recommendations include improving access to pre-competitive information for secondary processing, embedding circular principles into ESG frameworks, and boosting research and coordination capabilities.

Water

The report calls for integrating circular economy considerations into the National Water Initiative, reducing barriers to biochar and organic material markets, and embedding circular water management in government precinct policies.

Overall Message

The report concludes that a circular economy could unlock innovation, enhance environmental resilience, and deliver productivity gains while advancing Australia’s net zero objectives. Collaborative, coordinated action across government, business, and community sectors is essential to realise this transition.