Circular Economy in the Community of Madrid
Madrid is a strategic international hub in the Circular Economy due
to its high concentration of public institutions, headquarters of large
companies, international organisations and programmes to promote
entrepreneurship around new models of production and consumption.
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A preferred place for Circular Economy companies
Madrid is the main National hub for companies dedicated to the Circular Economy with driving companies such as Ecoalf, Cabify or Hamelyn, as well as consolidated corporate players in the area of waste management and valorization.
Leading organisations and associations are the Centre for Innovation in Circular Economy (CIEC), PTI SosEcoCir-CSIC to advance in actions and studies for the sustainability of the urban environment, mitigate the effects of global warming and implement innovative solutions in resource and waste management and CONAMA, creating meeting points between the different stakeholders in the environmental sector.
In the regulatory field, the Community of Madrid is leading the transition to a circular model in Spain, establishing tax incentives and specific regulations to support sustainable businesses. The Community of Madrid has taken a significant step by approving the Circular Economy Law in April 2024, which seeks to regulate and promote sustainable practices in the region. This regulation encourages public-private collaboration, avoiding bureaucracy and unnecessary expenses, and does not impose additional fees. Its objective is to move towards decarbonisation, strengthen legal certainty, protect the environment and generate stable employment, creating new opportunities for companies and municipalities. Along the same lines, the regional government supports a significant number of projects in the field of circular economy and use of natural resources.
The Madrid City Council is another of the public administration bodies whose priority is to promote the circular transition. The Madrid 360 Plan includes the promotion of the circular economy as a central axis to reduce the ecological footprint of the region. These initiatives are a great opportunity to attract technology-based companies and talent that can solve the sustainable challenges of the region.
Research, Hubs, Accelerators and Talent
Among the hubs and accelerators, the Centre for Innovation in Circular Economy (CIEC), awarded at the Eurocities Awards 2024, stands out, with more than 700 m2 of spaces and specialised services for companies, entrepreneurs and citizens, as well as tutoring programmes, training, events and free open Circular Economy workshops. It accompanies startups in their acceleration and incubation programs, facilitating the attraction of investment and the development of patents.
Other ecosystem organizations include Triple Coworking, which represents the concept of Triple Balance and it brings together organizations and activities whose vocation is to generate a positive environmental and social impact, as well as an economic one. MIEB Mostoles Impact Entrepreneurship Booster supports collaboration between companies in its ecosystem and startups with innovative solutions.
In relation to talent, universities and research centres are also promoting the Circular Economy. The Technical University of Madrid (UPM) has various academic and research initiatives such as the Master's Degree in Circular Economy, with specialisations in consumption and sustainable management of natural capital, and in minerals and construction products, to integrate the circular economy in construction and industry encouraging the reuse and recycling of materials. Rey Juan Carlos University has the Chair of Circular Economy for sustainable waste management and the University of Alcalá develops research and transfer on new management and policy models that address the environmental challenge in an innovative way (eco-innovation).
A consolidated startup ecosystem
The Community of Madrid has 82 companies launched in recent years focused on the circular economy. The most common industries are transportation (30% of companies), food (17%), fashion (16%) and energy (13%). Main SDGs addressed are Responsible Consumption and Production (#12) and Climate Action (#13).
Most of these companies use cutting-edge technologies such as artificial intelligence in their products and services, generate more than 7 thousand jobs and accumulate funding that exceeds 700 million euros.
Roughly half of these 82 companies operate in the end consumer, product focused circular economy segment: 25 with asset sharing / “product as a service”models (mostly in transportation, fashion and real estate), 7 as second hand marketplaces, and 8 as circular merchants, reconditioning and extending the life of products in specific categories, bringing them back to market.
While there are only 6 companies represented in the waste management and valorization segment, this is mostly because this is an area dominated by more consolidated players and groups, some of which have significant presence in the Community of Madrid.
The rest of this cohort are in other areas such as nature, food and land use (11 companies), sustainable materials and production (also 11 companies, 7 of which in apparel) and in adjacent services such as measurement and monitoring (4 companies).
Among the most prominent Tech Companies are sustainable fashion brands such as Ecoalf, that integrates circular economy into its production processes using polyester from plastic bottles and nylon from fishing nets; second hand market platforms and enablers such as Hamelyn, which helps anyone to sell unused books and other stuff; and asset sharing platforms, particularly in the transportation sector, either promoting carpooling at a personal level or among employees and students, such as Amovens and Hoop Carpool, or facilitating ride hailing, notably Cabify, labeled as one of Spain’s first unicorns.
Other circular economy companies operate in the areas of materials, nature, and food and land use, such as Pyratex, which produces fabrics and knitwear made with natural, biobased and recycled compositions; and Digital Earth Solutions, which contributes to the circular economy through advanced ocean modelling, making it possible to predict and track plastic waste in the seas.
Among the companies that have raised significant investment rounds in recent years are Xoople, Cabify, CrowdFarming, Alga Energy, Plant Response and Vivla.
Circular Economy Startups in Madrid
Some prominent Circular Economy Agents in Madrid
Main Circular Economy Events in Madrid
Some of the main IoT & Autonomous Sensor events held in Madrid are:
MadBlue: Innovation, science and culture oriented towards sustainable development, with a significant focus on the circular economy.
SRR: International Recovery and Recycling Fair.
Definition and expected evolution of Circular Economy
Circular economy is based on the production of goods and services in a sustainable way, reducing consumption, time, energy sources and waste. It is an industrial system that replaces the concept of "end of life" with that of "restoration/reuse", moving towards the use of renewable energies, eliminating the use of toxic chemicals that harm reuse, and aiming at the elimination of waste, through new materials, products, systems and business models.
As opposed to the “take-make-waste” linear economy, the circular economy is inspired by nature to minimize resource extraction and waste. Its key principle is to extend the use life of each product and material as long as possible, at its maximum economic value.
This principle applies differently in the 2 phases of the circular economy:
- End consumer, product focused circular economy: Focused on helping the end user to extend the use life of each product, through different strategies such as reduce, share, reuse, maintain, repair, refurbish and recycle.
- Industry, materials focused circular economy: Focused on extracting the maximum value and purity from molecules and atoms, turning waste into resources, through waste management and valorization activities, such as recycled materials or energy generation.
Circular economy processes are based on the separation between technical and biological materials, as nature can only absorb the latter. Recovering these technical materials as resources does not only create economic value. It avoids them becoming toxic waste harming our environment.
Product design is critical to facilitate the maximum extension of the product focused circular economy and the separation of biological and technical materials for its valorization and toxic waste avoidance.
Making the circular economy a reality is an opportunity for companies helping end users to adopt these practices and running these industrial processes.
Taken to the next level, the circular economy evolves into the regenerative economy, which does not only avoids harming nature but also fosters the conditions for the nature to thrive and generate more natural resources. This is particularly relevant in the food and land use area, where regenerative agriculture practices such as nurturing biodiversity can achieve both economic and environmental positive impact
In a world where the amount of waste generated continues to grow – in the European Union alone, people and companies produce more than 2,000 million tonnes of waste per year – and where more than 90% of all materials extracted and used are wasted, promoting the transition to this type of model is becoming increasingly urgent and important.
Circular Economy, challenges and future
The circular economy is presented as a promising solution to face the environmental challenges arising from industrialization, offering an alternative to the linear model of "use and dispose". This approach seeks to keep products and materials in use for as long as possible, promoting their recycling and reuse, which reduces the unsustainable exploitation of natural resources and the uncontrolled generation of waste.
Institutions such as the European Commission and organizations such as the World Economic Forum and the Ellen MacArthur Foundation agree that the circular economy not only mitigates environmental threats, but also drives economic growth. It is estimated that, by 2030, this model could increase European GDP by 0.5% and generate 700,000 new jobs, demonstrating its potential to combine sustainability and economic profitability.
The transition to a circular economy requires the involvement of all social actors, including citizens, to move towards the goal of zero discharge. This paradigm shift not only brings environmental benefits, but also business advantages, such as opening new lines of business and reducing costs. Adopting this model is essential to build a more sustainable and economically profitable future, aligned with the sustainable development goals and the protection of the planet for future generations.
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