Wales Has Five Years to Move to a Circular Economy

There’s a growing recognition that the circular economy isn’t just an environmental necessity – it’s an economic one. But we don’t have 10 or 15 years to make the shift. We have five.

The principles of circularity are simple enough: eliminate waste, keep materials in use for as long as possible, and regenerate the natural systems we depend on. Nature does all of this instinctively. It’s only in our industrial systems that waste has become normalised.

At Circular Economy Innovation Communities (CEIC), which is delivered by Cardiff Met and Swansea Universities, we help organisations put these principles into practice. Through a six-month programme, we guide them from understanding their carbon footprint to redesigning processes, products and business models so they can operate more sustainably. Sometimes that means changing packaging or looking at new ways to deliver services rather than selling products outright. Sometimes it means rethinking the entire supply chain.

The results are encouraging. Businesses are not only cutting emissions but finding new value in what they already have. One Welsh company supplying bedding to hotels, for example, has completely reversed its sourcing, now buying 80% of its materials from within the UK rather than importing them. It has also introduced a system to take duvets and pillows back at the end of their life, recycling the materials into products for the automotive and protective equipment industries. The change has improved profitability as well as sustainability.

Examples like these show what’s possible when circular thinking is applied to everyday operations. The challenge now is scale – and speed.

The UN’s latest findings show that 60% of global greenhouse gas emissions come from the way we produce and consume materials. Even if we moved entirely to clean energy, it wouldn’t be enough to reach net zero without changing the linear ‘take, make, dispose’ system at the heart of our economy. That’s why collaboration across supply chains is so important. If manufacturers don’t know the materials and components used in a product, it becomes almost impossible to reuse or recycle them later.

Across Wales, there are encouraging signs of innovation. Welsh Government’s ‘New to Circular Economy Fund’ has supported feasibility studies exploring ideas such as a project developing an organic bio-fertiliser from seaweed grown in Wales, and developing hemp processing facilities in Wales to support the use of low-carbon, breathable materials like hempcrete. These are small grants, but they demonstrate how modest investment can spark practical circular solutions.

There are also larger-scale examples of leadership. The Bluestone attraction in Pembrokeshire has eliminated fossil fuel use across its resort, refused to sell single-use plastic bottles, and found creative ways to reuse materials, from turning used cooking oil into fuel to electrifying its site vehicles. It shows what can be achieved when circular principles are applied consistently and courageously.

But while progress is being made, it’s not fast enough. The next five years are critical. We need stronger fiscal and policy levers to encourage change. A targeted carbon tax on high emitters, higher levies on unnecessary single-use plastics, and greater support for businesses adopting circular models could all accelerate the transition.

Procurement is another key driver. Around 80% of a health board’s carbon footprint comes from what it buys. If large organisations – public and private – use their purchasing power to favour suppliers that apply circular principles, they can transform entire sectors. Welsh Government, health boards and local authorities all have a crucial role to play here.

Circularity isn’t just about waste reduction; it’s about economic renewal. The CBI has reported that the so-called “green economy” is growing at around 9% a year, compared with 0.1% for the wider economy. Research from ReLondon – a partnership of the Mayor of London and London’s boroughs to improve waste and resource management in the capital and accelerate the transition to a low carbon circular city – suggests that adopting circular models could add billions to regional economies and create tens of thousands of jobs.

There’s no reason Wales shouldn’t share in that growth – but only if we act now.

The good news is that we have the building blocks: the Wellbeing of Future Generations Act provides the vision, and programmes like CEIC are helping organisations put that vision into practice. What’s needed next is momentum.

If Wales wants to lead the way in circular innovation – not just in principle but in reality – the next five years will decide it.

Dr Gary Walpole talks about this and more in the Green Economy Wales podcast episode Unlocking Wales’ Circular Economy Potential. Listen to the podcast here.