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Why adopt the circular economy approach?


Hello, fellow CREUSERS! If you’re new here, do read our previous article to find out more about our background story! Today’s topic will be about why all companies should adopt the circular economy approach in their business model and some tips on how to get started!


What is circular economy?

According to MEWR, the circular economy focuses on designing waste out of the resource ecosystem and maximising the value of resources by keeping them in use for as long as possible, an alternative to a traditional linear economy (take, make, waste). For example, at XCEL, instead of disposing broken pallets, we will repair them or upcycle them! To read more on our circular economy approach, please click here.



Why should companies adopt the circular economy approach?


In a nutshell, it helps to conserve resources and reduce waste which is especially crucial in land-scarce Singapore. According to data from Global Footprint Network (GFN) released by WWF, globally, humanity needs 1.7 Earths to meet the current rate of consumption and give ecosystems enough time to regenerate. In Singapore, however, we need four planet Earths to sustain this level of consumption! At this rate, our only landfill, Pulau Semakau will be filled up in less than 15 years.



Resource Sustainability Bill (RSB)


To extend the lifespan of our last landfill and work towards a zero-waste nation, the Singapore’s parliament has passed the RSB in 2019, to help reduce and manage electronic waste (e-waste), food waste and packaging waste (including plastics); waste streams that have relatively high generation and low recycling rates. Companies will be responsible for the waste they generate.

  • Regulated e-waste management system by 2021: Companies that manufacture or import regulated products for the local market will be made responsible for the collection and proper treatment of e-waste.

  • Implementation of a mandatory packaging reporting framework by 2025: To raise companies’ awareness of the benefits of reduced packaging and to encourage companies to reduce packaging. Brand owners, manufacturers, importers of packaged goods and supermarkets (with an annual turnover of more than $10 million) will be required to submit their packaging data and 3R plans to NEA.

  • Food waste segregation for treatment from 2024 onwards: Owners and operators of commercial premises where large amounts of food waste are generated must segregate their food waste for treatment.

  • To learn more about the Resource Sustainability Act (RSA), please click here to read the bill or here for the fact sheet.


Carbon Tax


Apart from the RSB, Singapore introduced a carbon tax on the emission of greenhouse gases (GHG) from 2019 as part of its efforts to combat climate change. Any industrial facility that emits direct GHG emissions equal to or above 25,000 tCO2e annually will be required to be registered as a taxable facility and to submit a Monitoring Plan and an Emissions Report annually.


Taxable facilities will also have to pay a carbon tax, set at a rate of $5 per tonne of GHG emissions (tCO2e) from 2019 to 2023. By the year 2030, Singapore will increase the carbon tax rate 2 to 3 times more than the current rate. Non-taxable facilities may be indirectly impacted by higher electricity costs.


Consumers are making more sustainable choices


Consumers are more willing to spend more on sustainable products as they typically last longer and have positive social impacts, making consumers feel good about buying them. A Nielsen survey in 2018 has shown that the majority of global consumers strongly feel that companies should be responsible and help improve the environment (eg. Implementation of programs), and will most likely purchase from a sustainable company. Being sustainable benefits businesses in the long run with its economic benefits however, companies must remember to be consistent in what they say and do and not to greenwash.



What should companies do?


The adoption of the circular economy approach will require measures to be taken across the entire value chain, from production and consumption to waste and resource management. For a start, here are some suggestions:

  • Redesign: Designing products to be more durable and repairable lengthens their lifespan, delaying their entry into the waste stream. A better product design reduces the number of resources used in production. Creating them with materials and components that could be taken apart easily also makes it easier to recycle. It will be even easier if the entire product is made from the same material as it will be easier to sort at the Material Recovery Facility, where all our recyclables are sorted by hand.

  • Upcycle: For instance, upcycling (creative reuse) is a great way to repurpose waste materials, and it helps to reduce waste too! Companies can also enhance their CSR programs by participating in upcycling workshops.

  • Repair: Educate your consumers to repair their products instead of replacing them with new ones. By designing products to be more repairable and offering repair services, consumers will be more inclined to repair their products due to its convenience.

  • Recycle: Recycling of waste and reintroduce it into the value chain.

  • Refuse: Avoid unnecessary packaging, single-use disposables or resources used in production.

To conclude, businesses must incorporate sustainability into their business models by re-looking into their value chain and start making sustainable changes today. By adopting the circular economy approach, companies will better manage their resources and reduce the amount of waste generated, benefiting them and the environment. If you would like to share how your company adopt the circular economy approach, please feel free to leave them in the comments below or publish a post on our blog! We will be more than happy to share! 😊


We hope you find this blog post informative. Thank you for reading and we will see you in our next post!


Disclaimer: While we have made every attempt to ensure that the information contained in this blog post has been obtained from reliable sources, CREUSE is not responsible for any errors or omissions, or for the results obtained from the use of this information. Please take all steps necessary to ascertain that the information you receive from CREUSE is correct and has been verified. Do check the references by clicking on the hyperlinks provided and double-check all information with independent sources. Please remember that anyone can share their views and advice on CREUSE.

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