What is the Circular Economy – and how can environmental certificates help to ‘close the loop’?

The circular economy maximises the use of valuable resources and minimises waste by keeping products and materials in use for as long as possible. This contrasts with the traditional linear economy which follows a “take, make, dispose” model. The circular economy effectively “closes the loop” by enabling existing materials to be reused, or by returning biological materials to the environment using processes such as composting.

When companies are seeking to reduce their emissions, making a positive contribution to the development of the circular economy can be one of the factors that is considered. Sourcing biomass environmental certificates that are linked to Anaerobic Digestion (AD) can offer this additional benefit.

AD breaks down organic materials in the absence of oxygen to produce biogas and digestate. Biogas can be used in a Combined Heat and Power (CHP) system to generate renewable heat and power or upgraded to biomethane, or ‘green gas’, by removing its CO₂ and other trace impurities. This enables it to be injected to the grid as an important component of the overall gas supply. Digestate is a nutrient-rich substance that can be used as a natural alternative to fossil fuel-based fertilizer to improve soil health in agriculture. Renewable Gas Guarantees of Origin (RGGOs) and Renewable Energy Guarantees of Origin (REGOs) are issued for each unit of gas that is injected and each unit of power that is generated respectively.

AD contributes to the circular economy in the following key ways:

  • It can divert organic waste from landfill and incineration.
  • The digestate produced from AD contributes to the regenerative principle of the circular economy by returning valuable nutrients back to the environment.
  • The biomethane produced is a local, clean energy source that can substitute for fossil fuels in various applications, aligning with the circular economy’s goal of minimizing the use of finite resources.
  • Anaerobic digestion can be implemented at a local level, creating closed-loop systems where organic waste from households, farms, or industries is processed nearby, with the energy and nutrients being returned to the community. This reduces the need for transportation, supports local economies, and enhances resource efficiency.

It is also possible for companies to source environmental certificates from AD plants that are using waste products from their own industry – demonstrating even closer integration into the circular economy itself. A neat example of this is in the food and beverage industry. Some AD plants use waste from the processing of alcohol as a feedstock for their digestors. This can take many forms, such as spent grain or residues, stillage, wastewater, fermentation sludge, filter cake and organic debris from raw material preparation.

When this waste is processed through an AD plant, the certificates that are issued alongside the generated biomethane and power can be procured by food and beverage industry players, enabling them to use energy associated with the recycling of their own waste products. As a further potential feedback loop, CO₂ is produced as a by-product when biogas is upgraded to biomethane and when this is captured it may also be used as an input to food and beverage manufacturing. Alternatively, it may be permanently stored underground, closing the loop by locking the CO₂ away again, often in the same location as the original fossil fuels originated from. The digestate that is taken off may also be applied to land for growing crops for use within the same industry.

Given the diversity of feedstocks, there are a variety of potential links between specific industries and the AD plants that are using their waste products. These AD plants can then be supported through sourcing the environmental certificates that they generate. In many cases the value of these certificates is now an important component of the plant’s overall income. Selecting environmental certificates in this way not only helps these renewable generators to continue operating (see our blog about renewable energy certificates to read more about this), but also enables a range of industry players to make a positive contribution to the development of the circular economy, which is central to a sustainable future.