During the last decade the European Union had started elaborating the transition from a linear to a more circular economy. In particular, the European Commission presented a new circular economy package on 2 December 2015. The package contains an action plan in order to promote circular economy. It also maps a series of actions planned for the coming years and four legislative proposals on waste setting targets for landfill, reuse and recycling to be met by 2030. These actions include the adoption of specific measures to improve waste management as well as to promote eco-innovation and resource efficiency. The main difference between these types of economy is that linear economy follows the ‘take-make-consume-throw’ pattern, whereas circular economy is based on sharing, leasing, reuse, repair, refurbishment and recycling, where materials and products are highly valued (European Parliament, 2016).  

In this frame, many companies have started shifting towards circular economy after noticing that linear system increases their exposure to risks including higher resource prices and supply disruptions. In particular, price volatility levels for resources and products such as metals, food and non-food agricultural output in the first decade of the 21st century were higher than in any single decade in the 20th century. The replacement of the ‘end-of-life’ concept with resources restoration, leads to the use of renewable energy, eliminates the use of toxic chemicals and aims for waste elimination through the superior design of materials, products, systems and business models (Ellen MacArthur Foundation, 2013).

In general, the transition from linear to circular economy affects not only the economic status of companies but also creates benefits for society and employment. In terms of employment, studies have shown that circular economy helps in its growth through the adoption of reuse programmes (retail of second hand goods in store), closed and open loop recycling (waste recycling and wholesale), repair and manufacturing programmes (repair of machinery equipment, electronics and household goods) and servitisation in renting and leasing of goods (WEF, 2016; EY, 2015; WRAP, 2015).   

However, the movement towards circular economy requires a significant boost in terms of investments, which will temporarily increase economic activity and employment. In the longer time perspective, investments will help economies to be more energy efficient, more material efficient and more performance oriented. It has been estimated that the extra investments required for the transition to a circular economy are no higher than 3% of GDP per annum, from now on until 2030.The extra investments may include a) the extension of the electric power grid (smart grids, solar and wind power, charging stations for electric vehicles), b) interventions in public transport and commuter services (road network, railways, vehicle fleet, c) development of bio-refineries, d) interventions in farming and forest systems and e) retrofitting of old buildings (The Club of Rome, 2015).

Most public organisations as well as private companies realise the need to operate differently. However, there are barriers to fully integrate circular economy such as 1) lack of information and understanding of the principles of circular economy, in particular among SMEs, 2) inconsistent legislation and regulations and 3) lack of finance.

This White Book is one of the outcomes of the INTERREG Europe project CESME (Circular Economy for SMEs) 2016-2020. The aim of the White Book is to provide policy makers and private companies with knowledge and insight within the field in order to enable more SMEs to enter the circular economy. This White Book includes all the lessons learnt and recommendations from the CESME project targeted 1) SMEs at practical level and 2) policy makers at strategic level.