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Companies are embracing the circular economy

August 9, 2021

Automotive parts manufacturer Continental will use recycled plastic bottles to make tires as it embraces the principles of the circular economy. More and more companies are joining the trend — but is it enough?

A picture of a Continental tire
German tire giant Continental wants to source the polyester it needs from used plastic bottlesImage: Julian Stratenschulte/dpa/picture alliance

Recycling, an activity once associated with empty milk cartons and hippies, is getting a corporate makeover.

Last week, tire giant Continental announced that it will use reprocessed polyester taken from recycled polyethylene terephthalate (PET) bottles in its tire production starting in 2022.

The raw materials for the polyester — a type of plastic — traditionally used in tire manufacturing is derived from crude oil and natural gas. Making a complete set of vehicle tires will make use of more than 60 recycled PET bottles. In lab and road testing, tires made with polyester fibers obtained from bottles performed as well as tires made with traditional fibers.

"With the use of recycled polyester yarn, we are taking another important step in the direction of cross-product circular economy," Andreas Topp, Continental's head of materials, process development and industrialization for tires, said in a press release.

The circular economy is an economic system that aims to keep products and materials in use for longer, thereby increasing their productivity and reducing waste. A widespread uptake of the system could yield economic benefits valuing as much as $4.5 trillion (€3.8 trillion) by 2030, according to the World Economic Forum. 

The German company is just the latest in a line of corporations around the globe that are starting to take recycling more seriously.

Plastic poses carbon problems

Last month, a study from the German Institute of Economic Research (DIW) concluded that the production and incineration of plastic releases worrying amounts of carbon into the atmosphere, contributing to climate change.

The production of 1 ton of plastic generates nearly 2 tons of CO2, and burning that waste adds another 2.7 tons of CO2 to the atmosphere, the study's authors determined. 

"The climate targets of Germany and the rest of the EU will be missed unless significant efforts are made to strengthen the circular economy," co-author Frederik Lettow said in a press release. "To be climate neutral by midcentury, it is not enough to rely on low-emission production processes alone."

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The DIW, which also provides policy advice, has called for an array of EU regulatory reforms that will encourage a greater focus on recycling in the bloc. This includes more effective price signals for CO2 emissions tradings and legal standards requiring plastic products and packaging be made with recyclability in mind.

Thus far, producers of plastics and trash incineration companies had benefited from far-reaching exemptions to EU emissions trading, the report said. EU sustainability targets specify that 50% of plastic packaging waste should be recycled by 2025 and 55 % by 2030.

Thinking forward

The recyclability dilemma goes farther than just plastic. And some market players are already trying to address it.

Staying on the topic of tires: In 2020, American footwear and outdoor brand Timberland partnered with tire manufacturer Omni United to produce footwear out of used tires. But they aren't just any tires. These ones are purposefully designed to be recycled into footwear outsoles.

"The easiest way to think of our tire-to-sole program is like taking off a pair of pants and cutting them into shorts," Timberland wrote on its website when it announced the partnership.

This is the kind of long-term thinking DIW says will be necessary to reduce the plastic waste contributing to carbon emissions.

"In the consumer goods market, it is essential for manufacturers to make packaging recyclable in order to recycle more effectively," DIW wrote. "But they have no incentive to do so."

So far, the main drivers for companies to pursue more sustainable practices has been corporate social responsibility, or as a way to market themselves as green to consumers that are increasingly sensitive to sustainability.

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A trend gains momentum

For many, these reasons have been good enough. Burgeoning upcycling initiatives can be found in many markets.

German shoe brands Puma and Adidas, among others,  have launched shoe collections made from plastic waste collected from the environment. Building on a secondary service selling gently used items from its clothing brand, outdoor company Patagonia now also tailors products with greater wear into new garments. Competitor The North Face similarly expanded on its own secondhand e-commerce platform and launched an in-house design residency where its designers learn about the principles of the circular economy.

In the realm of computers, tech company HP recently launched what it calls "the world's most sustainable PC portfolio," which includes a new laptop made with ocean-bound plastics. The company has pledged to include ocean-bound plastics in all new desktop and laptop computers launched in its Elite and Pro lines.

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These initiatives, however, can obscure the bigger picture, which is that most manufactured products and their byproducts are still not recycled and in many cases couldn't even be. Even perfectly good, unused products often end up in landfills.

In June, British broadcaster ITV reported that Amazon was destroying millions of items of unsold stock, including laptops, smart TVs and hair dryers, at just one of its warehouses in the UK. This week,the  e-commerce giant responded by announcing initiatives to facilitate the sale of returned or overstocked items.

"Increased and higher quality recycling of plastic products cannot be achieved by individual market players," DIW said.

Kristie Pladson
Kristie Pladson Business reporter, editor and moderator with a focus on technology and German economy.@bizzyjourno