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  • Jana Vrzel

The Circular Economy Basics Series - The Technical Cycle

The Technical Cycle of the Circular Economy Butterfly Diagram (own illustration)

The circular economy system diagram, also known as the Butterfly Diagram, illustrates the continuous flow of materials in the circular economy. It consists of two main cycles – the technical cycle and the biological cycle. In the technical cycle, products are kept in circulation in the economy through reuse, repair, remanufacturing, and recycling. This way, materials are kept in use and do not become waste. In the biological cycle biodegradable materials are returned to the Earth and decomposed through processes such as composting and anaerobic digestion. This allows the land to regenerate the nutrients, which can then be used to create new biodegradable materials, thus, ensuring the continuation of the cycle.

The diagram above highlights the right side of the Butterfly Diagram, which represents the technical cycle, the focus of this article. The technical cycle shows smaller loops that are surrounded by larger ones. The inner loops represent the highest value that can be retained from a product. By keeping a product in its whole composition rather than decomposing or reprocessing it after its use, it retains greater embedded value. An example could be a laptop - a working laptop is worth more than the sum of its separate parts e.i. its display screen, keyboard, or battery. This is since the laptop’s whole value includes the value of its components as well as the value of the time and energy used to produce it.

The inner loops represent strategies such as sharing, maintaining, and reusing a product over and over again. Therefore, when possible, the inner loops should be prioritized over the outer loops as the latter require breaking down and reconstituting a product, which requires more resources. The inner loops are more cost and resource-saving, as customers and businesses make use of already existing products rather than investing in breaking them down and making new ones. The outest loop of the technical cycle represents recycling. It is the last stage in the technical cycle as it entails losing the embedded value of a product by separating it into its basic materials and components.

In the following, the basic concepts of each strategy loop are presented. To maximize the feasibility and effectiveness of these processes a product must be designed according to these models (e.i. design for durability and design for disassembly). That way a product can easily be repaired and repurposed. It is also relevant to design a product for multiple strategy loops. For example, making a repairable product out of recyclable materials. This ensures that when a product can’t be repaired anymore, its components can be dissassembled and recycled.

1. Sharing

A sharing platform is a model in which a business promotes collaboration among users to increase the usage and value derived from its products. The sharing model focuses on the consumption phase and less on the starting phase of manufacturing or the ending phase of disassembly and recycling. Product sharing centres around constantly using and maximizing the utilization and life span of a product. A core feature defining a sharing platform business is that the company does not make or own any goods. It merely offers the opportunity for consumers to tap into the unused potential of products.

2. Maintaining

Maintenance is an important model that helps prolong the lifespan of a product. It keeps products at their highest economic value and avoids them from deteriorating in value in case of potential damages. An example of maintenance is taking one’s car to the service center to be serviced for optimal continued usage. Maintenance can be applied to most products nowadays. It’s greater adoption, however, is hindered by the fact that people have become so used to convenience that most would simply buy new items rather than try and maintain already owned ones.

3. Reusing

The reusing model focuses on using a product again and again for the same or a different purpose. The most notable reusing models are currently found in the packaging and clothing industries, where increasing efforts are being made to tackle waste generation. By reusing an item, the value derived from it is increased and the generation of unnecessary additional waste is reduced.

4. Redistributing

Redistribution is another way to keep products in use and avoid them from becoming waste. By diverting products that are no longer needed in their primary target market to another market that can use them further, they are put to continued valuable use. For example, a fashion brand could redistribute unsold clothing from one store to another. Or even, instead of discarding unsold collections, a fashion brand could redistribute such items to people in need, for instance.

5. Refurbishing

Refurbishing products to renewed working order is a strategy to restore their value. This includes repairing or replacing components, updating specifications, and improving aesthetic appearance. Product refurbishing can be carried out by individual owners themselves or by specialists. The recent Right to Repair movement aims to make changes to regulations so that products are designed to be repairable by users themselves. There are many examples of companies working towards keeping products in use for longer through refurbishment. Examples can be found in the tech industry, for instance, where companies buy used items such as mobile phones, refurbish them, and resell them at a fraction of their original price.

6. Remanufacturing

The next stage in the technical cycle is remanufacturing. It is done when products cannot remain in circulation in their current state and require more intensive work to be used again. Remanufacturing involves re-engineering products and components to like-new condition with the same, or improved, level of performance compared to a newly manufactured one. Remanufactured products or components are typically sold with a warranty that is equivalent to, or sometimes better than, that of newly manufactured products.

This model may require more investment in plants and machinery than the inner loop strategies of the technical cycle do, but it ensures that products and components do not become waste and can remain in the economy. This, in turn, represents a cost saving for businesses and customers. China, for example, has adopted the circular economy as a national priority since the late 2000s and has defined vehicle remanufacturing as a key strategic sector.

7. Recycling

Recycling, the last stage in the technical cycle, is a process of collecting and reprocessing materials and turning these into new products or components. This process occurs in the final stage of a product’s lifecycle when it can no longer be refurbished or remanufactured. Recycling dissassembles a product into its basic materials and components and reprocesses these into new ones. For this to be possible, the product itself must be designed to be recyclable.

Applying the strategic models of the technical cycle


Sharetribe allows companies and private individuals to create their own marketplace without any coding skills. They are on a mission to standardize the sharing economy, where resources are utilized efficiently and created value is distributed in a fair manner. It is a great example of a sharing platform in which the core product is offered as a service and that promotes the concepts of a circular economy.


Canon, the well-known tech company with an extended product portfolio, is working towards promoting a circular economy by reducing resource consumption and increasing product-to-product recycling. Canon is directing its efforts to the initial stages of its products’ design by making products smaller and lighter as well as reusing and recycling materials as much as possible. They further seek to reduce the generation of waste from manufacturing at their operational sites.

Canon has multiple designated recycling sites around the world, where customers can deliver damaged products to be refurbished or recycled. This is one of the company’s initiatives that aim at circulating resources within the same region in which they are consumed. The collected used devices are disassembled into their different parts, which are, in turn, washed and cleaned. Parts that are damaged or show signs of wear and deterioration are replaced. The remaining parts are recycled into new ones. With this strategy, the company is involved in multiple stages of the technical cycle such as recycling, refurbishing, remanufacturing, reusing, and maintaining.

​​Watch out for our next insight article in the Circular Economy Basics Series, where we will explore the biological cycle, the left part of the Circular Economy Butterfly Diagram, more in-depth.


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