Bio-Based Materials Key to Supply Chain Resilience, Security

Q: What led the Ellen MacArthur Foundation to develop the Circular for Nature report, and why have bio-based materials historically received less attention than technical materials within circular economy strategies?

A: Bio-based materials represent a significant portion of the economy, particularly in resource-rich nations, and especially across Latin America and the Caribbean. Historically, the Ellen MacArthur Foundation focused heavily on the technical cycle and technical materials. Since our launch in 2010, our reports prioritized electronic waste, durable goods, and packaging — mostly focused on plastics. While this early focus heavily influenced the direction of circular economy policies, we have since expanded our scope to look at biological materials more broadly. Under the new strategy we introduced last year, we decided to shift our focus toward durable, non-consumable bio-based materials. We chose this direction because these materials are significantly underrepresented both in global business networks and within existing policy frameworks, which is the core focus of our Circular by Nature paper.

Durable bio-based materials offer a unique advantage for resource-rich countries: the ability to actively regenerate nature. With finite materials, the economy can only aim to reduce its harm to the environment. Bio-based materials allow us to reverse that damage. Producing them through a circular economic model lets us actively reverse biodiversity loss and combat climate change by capturing and sequestering carbon, ultimately replenishing local ecosystems.

This regenerative potential is a vital motivation that was previously missing in the circular economy space. Anchoring this agenda within the Circular Economy Coalition for Latin America and the Caribbean sends a powerful signal, as we are bringing this framework directly to a regional superpower in the production of these materials.

Q: The report identifies a "reverse blind spot" in which biomass is still treated as a linear resource to be extracted, used once, and discarded. What long-term economic, environmental, and business risks does this approach create?

A: The missed opportunity is failing to reverse climate change and biodiversity loss, but the broader consequence of inaction is deepening the degradation inherent in the linear economy. By applying a linear mindset to bio-based materials, which form the foundation of many value chains, we perpetuate a broken model. We have already done this with food, and it remains the norm for most biological materials. While there are pockets of innovation where businesses apply regenerative principles, standard production methods continue to exacerbate modern ecological challenges.

For example, land-use change for agriculture is a primary driver of biodiversity loss. If managed through regenerative practices, however, it could drive ecosystem replenishment. Operating within a circular economy framework allows us to directly address and contribute to both the Paris Agreement and the Global Biodiversity Framework. The report outlines how to achieve this and provides the initial steps for how policy can support the transition from merely doing less bad to actively doing good.

There is also a critical social dimension to this transition. Many of these materials are produced by smallholder farmers in the Global South, such as in cotton and leather production. The base layers of these value chains are under immense pressure because trade systems do not favor their livelihoods or recognize centuries-old traditional practices as inherently regenerative. A circular economy lens demands socially inclusive value chains. This involves supporting smallholders on the production side and integrating workers downstream into repair and reuse cycles. This approach not only increases consumer accessibility but also creates entirely new green jobs across value chains where they do not currently exist.

Q: What steps should organizations follow to achieve bio-based circularity? 

A: To optimize bio-based materials and products for a circular economy, organizations must implement a strategic framework composed of five core operational levers. The first lever requires that raw materials are sourced regeneratively or derived from secondary feedstock streams. This initiative ensures long-term resource security and directly supports the broader environmental restoration goals of the enterprise.

The second lever focuses on designing products entirely without hazardous substances. This principle is critical for mitigating compliance risk, aligning corporate operations with tightening international trade regulations, and navigating global toxicity bans. The third lever involves designing for maximum durability and value retention. This approach directly enables the implementation of advanced circular business models, allowing companies to secure extended revenue cycles from their existing assets. 

The fourth lever centers on designing for material reuse in secondary applications. By planning for alternative commercial channels beyond the initial product lifespan, organizations can significantly maximize the long-term economic value of the underlying materials. The fifth lever dictates designing for material nutrient recovery. This final stage ensures that biological components can safely return to the soil at the end of their useful cycle, effectively fueling the next phase of regenerative production.

This entire five-lever framework must rest upon a foundational operational layer of inclusive and socially just value chains to ensure long-term commercial and systemic viability. As such, we propose a foundational sixth element: these systems must be sustained by inclusive and just value chains.

Q: How do these pillars work to generate genuine value for companies that integrate them into their value chains?

A: Companies that rely on natural resources are effectively signing their own death warrant by failing to apply a circular economy lens and its principles to their value chains and production. The traditional way we produce these materials extracts the very resources businesses rely on to exist. Soil degradation and climate change are reinforcing mechanisms for biodiversity loss; they are both symptoms and direct effects of a linear economy that ultimately reduce soil productivity.

By transitioning to regenerative production methods, one ensures that the ecosystems these companies depend on can continue to produce over the long term. This transition achieves higher yields and greater productivity throughout the entire production process. It also generates higher economic value from the same units of materials already on the market by keeping them in circulation. The economic rationale is clear: one side ensures nature thrives, while the other optimizes business models.

For example, Klabin in Brazil has achieved 54% higher yields compared to the conventional production of eucalyptus trees for paper and cellulose. Other examples show that regenerative methods increase both immediate yields and the long-term longevity of production. Furthermore, by providing better financial returns to the value chain for higher-quality products, companies can support rural communities and sustain long-term production, which addresses a major threat to rural livelihoods.

True innovation lies in new business models that ensure circulation, such as repair, remanufacturing, and creating longer value-generation cycles from existing materials and products. Economic value generation is increasingly tied to market access and a business's license to operate. New global regulations are demanding material and toxicity bans, while new trade barriers are reshaping global flows. 

Q: What motivates companies to implement these circular bio-based practices? What operational, financial, or leadership characteristics enable them to scale? 

A: Businesses have various motivations for adopting these models, with supply chain resilience serving as a primary driver. For example, Gucci transitioned from conventional production to investing in regenerative methods focused on soil health, biodiversity, and carbon sequestration. This strategy simultaneously addresses their corporate climate targets and builds supply chain resilience. By applying a circular design lens to its collections, it secures high-quality, fully traceable materials that comply with strict market regulations. These regenerative practices ensure the longevity of their raw inputs by fostering the healthy soil needed to sustain livestock for leather and ensuring non-toxic cotton production across their diverse global markets.

Other corporations focus on operational efficiency and community relations to protect their license to operate. In Brazil, eucalyptus cultivation by companies like Klabin is traditionally water-intensive and historically faced local criticism due to regional water scarcity. To mitigate this, Klabin implemented a mosaic plantation model that alternates eucalyptus crops with native plant species. This approach boosted agricultural productivity and increased yields while restoring local biodiversity and reducing water stress. Furthermore, Klabin optimized its downstream product model by investing in recycling infrastructure to repurpose paper byproducts, which reduced the costs associated with virgin material inputs.

Alternative entry points exist for circular economy enablers, such as Trace Surfer, which facilitate transparency rather than manufacturing bio-based end products. These entities serve as supply chain enablers by creating data transparency across various industry value chains. By providing the tracking information and data flows necessary to verify exactly how materials are produced, they allow other corporations to improve material circulation and validate their sustainability metrics. Ultimately, while companies utilize different entry points based on their specific operational drivers, each pathway delivers distinct economic and strategic benefits.

Q: What institutional or political barriers continue to slow circular reforms in Latin America?

A: The circular economy remains a relatively new topic within public policymaking, both globally and across Latin America. Nearly 15 countries in the region have established initial frameworks, roadmaps, or strategies. The Circular Economy Coalition for Latin America and the Caribbean was launched in 2021, building on foundational early policies such as Colombia’s 2018 strategy and Chile’s 2019 roadmap. This represents roughly five to six years of active policy development across the region.

The initial phase of this movement focused heavily on translating the circular economy framework into a context designed by and for Latin America and the Caribbean. While the concept originally originated in China and the European Union under conditions of resource scarcity, our regional context is defined by resource abundance. Therefore, the policy agenda must leverage these natural resources to close critical socioeconomic gaps that traditional development waves have failed to address. From the outset, these commitments have been positioned as a new era of industrialization and development, rather than a series of incremental updates to existing industries.

Rather than facing insurmountable structural barriers, the region is experiencing a natural policy evolution. With countries like Mexico recently releasing their first circular economy policies, there is a strategic window of opportunity. Latin American nations have naturally been more advanced in integrating nature and bio-based resources directly into their circular economy frameworks. For example, Brazil’s national strategy incorporates environmental regeneration as a foundational commitment from the start, while Costa Rica has explicitly linked the circular economy with the bioeconomy since its policy's inception.

Q: What further steps should authorities take to accelerate the deployment of these policies?

A: The primary operational challenge lies in fostering cross-ministerial collaboration, an exercise that is relatively new both regionally and globally. Developing holistic circular policies requires different ministries and departments to break down silos and engage in joint policymaking. There are encouraging precedents; Chile’s roadmap was developed through highly collaborative, cross-ministerial governing bodies, and similar governance structures are emerging elsewhere. This cross-ministerial evolution is essential to ensure that diverse government sectors align around a joint vision, linking bio-based materials to industrial growth, National Determined Contributions (NDCs) for climate change, national biodiversity action plans, and broader social welfare policies.

There is immense room for optimism regarding the region's ability to overcome these transitional barriers, particularly given the strong economic cases already demonstrated by local industries. Latin America is uniquely positioned to inform how global trade frameworks must evolve. By demonstrating these real-world impacts, the region can help reshape international standards to ensure that regenerative, nature-positive production methods are formally recognized and validated worldwide.

Q: What advantages can Latin America capitalize on during the development of circular policies?

A: Due to its abundant natural resources and rich biodiversity, Latin America possesses a distinct comparative and competitive advantage. Several countries have already established regulations to safeguard ecosystems while maintaining production. Brazil, for example, operates some of the most advanced agroforestry policies globally, incorporating a significant social component tailored to smallholder farmers.

Regarding governance structures for circular economy policymaking, effective frameworks vary across the region. The Brazilian National Circular Economy Forum serves as an excellent institutional reference point for domestic policy governance. In comparison, Colombia has successfully utilized localized forums connected to the national government across various provincial jurisdictions. Chile adopted an alternative model for its national roadmap, establishing an International Advisory Board and maintaining a decentralized implementation strategy that distributed roles and responsibilities to stakeholders outside of government. For governments and legislators developing frameworks, such as in Mexico, the Brazilian National Forum and the Chilean International Advisory Board represent the two strongest operational references.

Circular economy policymaking has been inherently collaborative from its inception because the subject intersects environmental, climate, economic, and industrial agendas. This collaborative trend must expand as bio-based materials increasingly require agricultural and forestry ministries to join the regulatory dialogue. Because this framework addresses complete value chains rather than just primary production, it will necessitate institutionalized coordination between downstream industries and upstream sectors. For example, integrating bio-based materials into the core of circular economy policies will drive essential, formalized dialogues between textile manufacturers and the agricultural sector.

Q: What short-term benchmarks does the foundation hope to meet regarding corporate innovation, public-private collaboration, and regional partnerships over the next two years?

A: Our next stage is focused on activating the findings of the paper. We are approaching this at three distinct levels: national, regional, and global. At the national level, we are prioritizing where the highest interest lies, though we will calibrate our strategy based on the political shifts and elections taking place across our region this year.

We are also focusing heavily on initiating regional activation through the Circular Economy Coalition for Latin America and the Caribbean. In partnership with the Coalition, we are launching a dedicated working group. All 18 member countries will be invited to participate, and at least a dozen have already expressed strong interest. This effort is built primarily around knowledge exchange to create a collaborative space for domestic governments to develop their own policies, while also working to influence relevant multilateral debates such as the Biodiversity COP and the Climate COP. We view Brazil as a potential first mover in this space. We see significant momentum within the Brazilian fashion and textile sectors to test the approaches outlined in the report. We may explore a similar approach with the textile sector in Colombia, but we will remain flexible to see where the strongest opportunities for national activation emerge.

At the global level, we are engaging with the Bioeconomy Challenge launched under the Brazilian presidency at COP30. One of its key workstreams is focused on market development and trade for bio-based materials, coordinated alongside partners like NatureFinance and UNCTAD, the United Nations trade and development arm. As a member of this working group, we are providing inputs on how international trade frameworks can align with our fifth policy recommendation, which addresses trade values and standards to ensure that circular, bio-based materials are prioritized and circulated globally.

While we focus on these three levels, the foundation will remain entrepreneurial and ready to refine its strategy as we go. The fashion and textile sector offers immense opportunity. It is a major industry heavily dependent on these materials and faces severe pressure regarding its environmental footprint, as well as scrutiny over the health impacts of synthetic materials. Consequently, the industry is highly motivated to look at material innovation, bio-based substitutes, and methods to extend the lifespan of existing garments to mitigate premature fashion waste. There is a clear window of opportunity in that space, but our ultimate goal remains transforming the entire system across these three pillars.