Circular packaging explained: how to make packaging more sustainable
Did you know that circular packaging can cut CO₂ emissions by up to 80%? This highlights its potential to reduce the environmental impact of commerce.
Circular packaging aims to eliminate waste and reduce the need to produce more packaging by keeping materials in use for as long as possible. Like any other part of the circular economy, it prioritises sustainability by focusing on reuse, recycling, and regeneration.
As the European Union aims for all packaging to be reusable or recyclable by 2030, retailers will increasingly look to adopt circular packaging.
What is circular packaging?
Circular packaging ensures that materials are reused, recycled, or regenerated, minimising waste. It focuses on three core principles:
Designing out waste: creating durable, reusable, and recyclable packaging.
Keeping materials in use: shifting away from single-use packaging by encouraging return, refill, or repurpose models.
Regenerating natural systems: using renewable materials that have minimal negative impact and, in some cases, even positively impact the environment upon degradation.
The urgency for circular packaging becomes clear when we examine the environmental footprint of current packaging practices. 95% of plastic packaging becomes waste after a single use.
Shifting to circular packaging can significantly reduce greenhouse gas emissions, the need for new materials, and the amount of waste generated. It’s a win-win-win.
In the bigger picture, circular packaging fits into the wider economy. The Ellen MacArthur Foundation provides a comprehensive overview of what is a circular economy.
So, circular packaging isn’t just a nice-to-have—it's a crucial step in addressing the environmental challenges posed by the ever-expanding demand for commerce worldwide, combined with linear packaging practices.
One of the pioneers of circular ecommerce packaging captured in the wild: RePack.
The benefits of circular packaging
Circular packaging is a smart, forward-thinking choice for businesses today because of the many benefits: environmental, economic, and social.
Environmental benefits
Circular packaging reduces carbon emissions and prevents waste from being created in the first place. Many retailers and circular packaging companies have already proven this at scale. Lush Cosmetics, for example, has produced 74% fewer emissions and used 36% less water with its circular packaging initiatives.
Economic benefits
Businesses using circular packaging often see long-term cost savings by reducing the need for more raw materials and production. Every time circular packaging is reused, the price per use or “cycle” reduces.
Companies can often also benefit from tax incentives when they adopt circular packaging, such as the UK’s Plastic Packaging Tax. Additionally, sustainable packaging can help with brand perception and even build brand loyalty.
Social benefits
Circular packaging reduces pollution and waste, improving public health. Amsterdam's circular economy strategy aims to halve raw material use by 2030 and achieve a fully circular city by 2050, fostering healthier urban environments.
How circular packaging drives design innovation
The push for circular packaging has sparked a wave of design and material innovation. Renewable materials, modular packaging designs, and cutting-edge recycling technologies are transforming how businesses approach packaging sustainability.
Here are some examples of such innovation:
Renewable materials: Solidu, a cosmetics brand, uses packaging made from bamboo, charcoal, and starch, which decomposes within 45 days.
Valorising waste materials: brands like Maison Matine and BioGaia use Wool Envelopes that are made of waste wool and can be reused, repurposed, and in some parts of the world, returned.
Reusable systems: Loop’s returnable packaging system shows how durable, reusable packaging can be consumer-friendly and reduce waste.
Such innovative approaches enable businesses to differentiate themselves and show they care about sustainability – not just talk about it.
In collaboration with the department store Kaubamaja, we piloted a circular program for returning Wool Envelopes to keep the valuable material in the loop. Read more: Woola’s circular future
What about the circular economy for plastics?
Plastic pollution is one of the biggest environmental challenges we face. Simply recycling more or reducing plastic use won’t be enough—we need to rethink how we design, use, and reuse plastics altogether. If we don’t act now, plastic waste in our oceans could outweigh fish by 2050 (source: The Ellen MacArthur Foundation).
A circular economy for plastic aims to keep plastic in the economy and out of nature. This means:
Eliminating unnecessary and problematic plastics
Innovating to ensure essential plastics are reusable, recyclable, or compostable
Making sure plastics actually get circulated through reuse and recycling systems
So, a circular economy for plastic is possible, but it requires systemic change, global cooperation, and urgent action from businesses and policymakers alike.
The growing trend of sustainable packaging materials
Sustainable packaging alternatives are increasingly popular, with renewable materials like wool, mushroom, algae, and hemp fibre gaining traction.
For example:
Dell uses mushroom-based packaging that decomposes within 30 days.
Notpla offers seaweed-based packaging, used at events like the London Marathon. This packaging degrades much faster than plastic and is, in some cases, even edible.
While circular packaging is on the rise, it’s clear it comes with challenges – scalability and cost being the most common ones. Circular materials can be costlier than conventional packaging materials and may require upgraded infrastructure for their lifecycles.
On the other hand, technological advancements and investments give us hope these challenges can be overcome. Despite limitations, sustainable packaging offers a compelling solution for reducing environmental impact.
Actionable steps for implementing circular packaging
Conduct a packaging audit: Evaluate current practices, identify wasteful areas and set sustainability goals. IKEA's audit helped reduce packaging waste by 50%, saving them millions.
Material selection: Choose reusable, recyclable, or compostable materials. Consider the environmental impact of the materials throughout their lifecycle, from production to disposal. There are many sustainable packaging materials you can choose from.
Design for durability and reusability: Create a circular sustainable package design, like RE-Zip’s system, which can be reused up to 20 times.
Supplier and partner collaboration: Work with suppliers who share circular economy values and can help you set up a closed-loop system for packaging. Like Heinz Canada and Loop’s collaboration for reusable packaging.
Pilot, educate, and scale: Start with a small pilot project, then scale and educate customers. RePack’s guide on returning packaging is an excellent example.
The future of circular packaging
Current state
While more businesses are adopting circular packaging, the trend is still in its early stages. Adoption rates vary across industries, but the momentum is clear.
Emerging innovations
Smart packaging and blockchain technology can be useful for tracking materials’ lifecycles. IBM's blockchain system, for example, helps trace packaging origins and recycling processes. Digital platforms, like Vytal's software for reusable packaging, help manage returns efficiently. Additionally, Packaging-as-a-Service (PaaS) models, where companies rent packaging, are gaining popularity.
Regulatory outlook
Evolving regulations, such as the EU’s Packaging and Packaging Waste Directive, push businesses towards circular packaging. Governments worldwide are setting targets for recyclability, following extended producer responsibility (EPR) strategies, that make it essential for companies to adapt quickly to remain compliant.
Shifting to circular packaging is imperative
Circular packaging is essential for a sustainable, resilient economy. It significantly reduces waste, conserves resources, and cuts CO₂ emissions. Beyond the environmental benefits, circular packaging is a strategic business move that fosters long-term cost savings, innovation, and brand loyalty.
By adopting circular packaging, companies can future-proof their operations and position themselves as leaders in a world where regulators and consumers hold sustainability in high regard. In today’s competitive landscape, embracing circularity is not just a choice—it’s a necessity.
P.S. If you’re a business keen on exploring how circular packaging, such as waste wool, can make your business more sustainable, you can request free Woola packaging samples here.
