Dual Circularity Modelling of Technological and Biological cycles for Sustainable Industrial and Societal Products

Circular Economy (CE) has emerged as a focal point in both research and practical application, as a means of achieving greater sustainability outcomes driven by its transformative potential to decouple economic development and growth from resource consumption. Moreover, EU policies have placed a strong emphasis on promoting the transition from linear to circular systems utilising renewable resources (i.e., bio-based products) to diminish dependence on fossil-based sources. Despite the great imperative of circular business models (CBM) and circular strategies on facilitating access to new markets, driving innovative solutions and saving production costs to solve sustainability issues, several challenges have been noted due to the CE implementation. These challenges tend to be overlooked and unaccounted for, arising due to complex systemic and behavioural responses commonly labelled in literature as rebound effects (RE). Currently, there is a lack of structured approaches to support the absolute sustainability performance of CBM through early identification and mitigation of RE. Considering the rapid developments within CE, it is imperative to identify these challenges in the early stages of CE initiatives' design and implementation, especially with the increased focus on the incorporation of biotic material into technological cycles.

Within this context, a design research methodology (DRM) has been applied with the objective of developing an ex-ante simulation-based approach to support companies in designing sustainable CE initiatives in the context of incorporating biotic material within technological aspects while mitigating potential RE occurrence. The methodology comprised four main studies based on the combination of various sets of qualitative and quantitative methods (e.g., systematic literature review, observation, surveys, interviews, model-based case studies, and expert validation) to prescribe and evaluate an exante simulation-based approach to fulfil the research objective.

Three main results are presented. First, state-of-the-art research addresses the lack of acknowledgement of the interconnectedness of biological and technological cycles within CE contexts by proposing the Dual Circularity (DC) concept. The concept underscores the adaptability of biobased materials and products to transition between cycles, providing a wide base of alternatives for decisionmakers to consider when designing their CE initiatives. Next, a systematic literature review (SLR) on key factors influencing RE occurrence across various disciplines resulted in a conceptual framework (RECF) showing a structured overview of triggers, drivers, mechanisms, and ex-ante and ex-post approaches to help identify and understand RE occurrence within the CE context. Afterwards, the approach for identification and mitigation of potential RE (AIMRE) due to the CE and DC initiatives implementation was developed. The approach consists of five stages: (i) Problem articulation for RE investigation; (ii) Development of the dynamic hypothesis for systemic and behavioural responses of CE initiative implementation; (iii) Formulation of a simulation model to unveil RE and mechanisms for their occurrence; (iv) Test of the simulation model to enhance the validity of the RE structure, behaviour
and magnitude; (v) Use of the simulation model for understanding and mitigating RE occurrence. Finally, testing the approach demonstrated its benefits and effectiveness through a real-world case study, ensuring practical validation of the AIMRE framework.

The approach enables modellers to identify and understand potential triggers, drivers and mechanisms of selected CE domains and within the DC concept; unfold RE mechanisms into decisionmaking structures to investigate the dynamics of resource consumption and RE; quantify the potential and realised benefit, as well as the RE magnitude under different conditions and evaluate the reasons for RE occurrence which might drive insights for RE mitigation.

By utilising the insight from the AIMRE, businesses can take proactive strategies and better anticipate challenges inherent in CE and DC initiatives. By aiding the understanding of causal feedback of resource consumption, especially in the context of renewable materials, businesses can develop more sustainable CBM, re-design processes, and optimise resource management to mitigate RE. Moreover, the approach facilitates enhanced transparency and responsibility in engagement with stakeholders and customers. Fostering a proactive dialogue around the intricacies of CE and DC initiatives reinforces the alignment of business practices with overreaching sustainability goals in the long term.

This project significantly contributed to the existing body of knowledge within CE and RE through System Dynamics (SD) and provided valuable insights for businesses in making informed decisions, optimising resource management and improving their sustainability performance. The practical and theoretical application of AIMRE can lead to more robust and responsible CE practices, encouraging future research to explore broader socio-economic implications within additional real-world case applications.