A Framework for Dynamic Modeling of Circular Economy Networks: The Polyethylene Terephthalate (PET) Packaging Supply Chain as a Case Study.

The transition to a circular economy (CE) requires agents in circular supply chain (SC) networks to take on a variety of different initiatives, many of which are dynamic in nature. Still, most CE analytical frameworks are based on steady-state models representative of close-the-loop initiatives but are unsuitable for time-dependent initiatives. Here, we use a system dynamics (SD)-based approach to develop a generic, modular framework for the dynamic modeling of CE networks. We start by proposing a model for a generalized actor, then derive specific models for five actors (a manufacturer, consumer, material recovery facility (MRF), recycling facility, and the Earth), and combine them to form a prototypical circular SC network. We apply this framework to the supply chain for polyethylene terephthalate (PET) plastic packaging by considering different scenarios over a 65-year time horizon in the U.S. We find that given the assumed recycling infrastructure, "slow-down-the-loop" initiatives such as product reuse are more effective than "close-the-loop" initiatives such as increased recycling for improving circularity and minimizing environmental impact. However, combining the two initiatives eliminates the need for capacity expansion and leads to the highest circularity in the shortest amount of time.