Circular and blue economy: what’s the difference?


BlueCity’s mission is to accelerate the transition from the linear to the circular economy through entrepreneurship. More specifically: our dot on the horizon is the blue economy, a concept that is ever so slightly different from the circular economy. We explain what this means below!

Linear economy

The current, linear, economic system, which prioritizes production, consumption and waste disposal, is not future-proof.  Earth is stretched to its limits. Raw materials of all kinds are extracted from the earth. Plastic is made from oil and glass from sand. Currently we consume much more than our earth can produce in the span of one year. This means that raw materials are slowly becoming depleted. Nature cannot give us more than we need in the current system. At the same time, we are producing huge amounts of waste at the end of the chains, which is stacking up and growing annually. The linear economy thus causes major problems, at either end of the production chains. This is an untenable situation. The need for a new type of economy, that is radically different from the current linear economy, is increasingly acknowledged and recognized. The Dutch government’s ambition, for example, is to have a fully circular economy by 2050.

The desire to develop a radically different system led to the creation of BlueCity. Do you know what the Blue in BlueCity stands for? Our model city derives its name from the blue economy. This concept is not as well-known as the circular economy. It also has a slightly different meaning. Below we explain the similarities and differences with the circular economy.

Circular economy

For many thinkers and doers, the circular economy is the answer to the problems of the linear economy. As its name infers, the circular economy starts from a circular approach, a loop in which the beginning and end are connected. The circular economy strives to find an answer to the problems of the linear system and in particular the use of ‘waste’. There is no such thing as waste in a circular system. Products and components are reused over and over again, ensuring that natural resources are no longer depleted. Everything goes around, in an endless circle.

Broken products are repaired, where possible. A product is only transformed into something new when it has really come to the end of its lifespan. The product’s re-usability is taken into account throughout the production process. It is designed in such a way that it can be easily repaired or disassembled, to be used as a resource for a new product. PET bottles are ground down into granules, for example, which are used in new products. Products like machines or cars, which are not used daily, are shared as much as possible in the circular economy. That way, their use is optimized and nothing goes unused for too long. The entire economy revolves around using products as long as possible and then re-using them to produce something new, and replacing resources with residual streams, that were originally considered to be waste. That way waste becomes a valuable input, rather than a worthless output. That is how companies close their own production loop. In this model, the economy consists of all kinds of separate loops which each reuse their own ‘waste’ as resources. Competition is still possible in this type of economy, without depleting the earth’s resources.

At BlueCity, circular entrepreneurs already put these principles into practice. The beer brewers at Vet&Lazy capture rainwater for reuse as cooling water. FruitLeather produces vegan leather from discarded mangoes. Instead of using oil or scarce minerals, they rely on ‘worthless’ residual streams. No depleted raw materials, but an endless residual stream of valuable ‘waste’.

Blue economy

Nature is the blue economy’s greatest inspiration. Everything is available in sufficient and even copious amounts in natural ecosystems. The blue economy draws on four important learnings from nature:

Lesson 1: know and respect your limits The current economic system is the root cause of the scarcity of raw materials. In this linear system, everything always has to be done faster, cheaper and in larger quantities. By contrast, nature knows its limits. A tree never grows taller than 80 meters or it would keel over. It doesn’t strive to grow more, because it knows that this would be tantamount to ‘bankruptcy’. The blue economy does not believe in limitless green growth, but focuses on natural limits.

Lesson 2: there is no such thing as waste. There is no waste in nature. When a tree loses its leaves, this becomes valuable input for another system rather than waste. Insects rely on the leaves for nutrients and hedgehogs build cozy houses with them. The output of one system thus becomes the input of another.

Lesson 3: embrace diversity and collaboration. Thanks to evolutionary processes, the symbiosis between species, and buffer installations, nature is always prepared for the next crisis: diversity and cooperation promote resilience. In companies, this natural philosophy translates as “embrace diversity”. Cooperation becomes the new competition in the blue economy.

Lesson 4: use what is locally available. In nature, Dutch dung beetles don’t have elephant poop flown in from South Africa. They stick to Dutch cow patties, which are abundantly available. The blue economy also applies this learning. Resources that are locally available are part of the natural ecosystem. Use these and you avoid all the issues that are caused by long-distance transport, such as CO2 emissions and the disruption of local ecosystems.

BlueCity takes these learnings on board in everything it does. Nature is our blue model city’s greatest source of inspiration. The building, people, and companies in and around the building are an ecosystem, in which knowledge and goods streams are traded or exchanged. Everyone works together harmoniously. Vet&Lazy uses the rainwater that is captured on the roof to produce its beer. Kusala uses leftovers from Vet&Lazy’s beer production and coffee grounds from rotterzwam to produce soaps with the most delicious fragrances. uses the CO2 that is emitted during the brewing process to growing spirulina. The caterers of BlueCity events uses this spirulina to mix tasty cocktails. What about the bitterballen we serve? These are made from oyster mushrooms grown on coffee grounds, which we collect in our coffee vending machine. As you can see, many of the loops within our ecosystem are intertwined. The output of one entrepreneur can thus become a valuable raw material for another.

Blue vs. Circular

In summary: the circular and the blue economy both are more sustainable alternatives to the current linear economy. There is no waste, neither in the circular nor in the blue economy. Whereas the linear economy generates waste, the circular and blue economy think in terms of potential. Waste becomes a raw material that closes the loop, coming full circle. The main difference is that the circular economy tends to think in terms of one loop, whereas the blue economy connects several loops with each other (see illustration). The circular economy focuses on a loop within one single industry. In this industry, products are produced, sold, taken back, recycled and produced again by one and the same company. The company’s own waste becomes the new raw material, and companies still compete with each other. Whereas in the blue economy, the output of one industry, can be the input of another. Loops are intertwined to optimize residual waste streams. While coffee grounds cannot (yet) be used to produce new coffee, it offers lots of potential for bioplastics and oyster mushrooms. The emphasis is on collaboration, rather than competition. By connecting these production chains, you create loops and eliminate almost all waste. In a way, the circular economy is just a tiny link in the greater, all-encompassing chain that is the blue economy.

You can find examples of the circular and the blue economy in BlueCity’s ecosystem. We don’t really care about the theory. Our model city is all about action. BlueCity puts the circular economy and the blue economy into practice. Testing, inventing, pioneering... Or as they say in Rotterdam: niet lullen, maar poetsen (stop talking, get working).


Noale van der Horst