London is recognised globally for its financial services, but other sectors such as manufacturing, wholesale and logistics are key to keeping the local economy running. These more physical processes are also fundamental to a city’s ability to transition to a low carbon, circular future where stuff is kept in use for as long as possible at its highest value through reuse, repair and recycling.
Cities offer a unique context for circular industrial processes to thrive, and – as enormous consumers of ‘stuff’ – a plentiful supply of material and products to work with. For example, only around 10% of Londoners’ worn clothing that is “captured” currently gets reused in the city[1].
Reusing materials within the city can be an important driver for local economic growth: circular businesses have been growing faster than more traditional linear ones in the economy in the past few years[2], and the transition to a circular economy is expected to contribute over £24bn to London’s economy by 2030[3].
This note will discuss opportunities for and benefits of retaining processes that recirculate and transform materials within cities. It shows ways that space constraints and affordability challenges can be overcome when accessing space, and outlines the facilities required for these processes to operate.
Five key industrial processes can help ‘close the loop’.
Circular processes are those that help sectors (re-)circulate and generate continued value from physical materials. In some industries, these processes are already established (such as the automotive and aerospace industries[4]), whereas for other sectors this approach represents new and innovative ways of working (e.g. within retail, packaging or construction).
These processes are often industrial in nature and can require specific space, facilities and equipment to operate.
Industrial space in cities is scarce and expensive.
London saw a 24% decrease in industrial floorspace between 2000 and 2020, against a backdrop of 3.4% decrease across the UK over the same period[5]. As a result, industrial properties in London are becoming smaller in size[6] and more expensive than their equivalent elsewhere in England[7].
This provides a partial picture of why some businesses choose to move circular processes out of the city as they grow. For example, Toast Ale – a business enabling the brewing industry to make beer with surplus bread – started operations in Hackney but moved their brewing operations to Sussex, Yorkshire and Kent as they scaled. Similarly, Again – offering packaging reuse and washing operations – initially established in central London but are now establishing primary operations at a much larger, more affordable facility in the north-west of England.
Still, some circular processes can be successful in the capital…
Despite the cost and scarcity of space, we see increasing examples of circular processes establishing themselves and thriving in London. Businesses have told us that they’ve decided to be in London due to benefits that are harder to find outside of the capital – some of the benefits are listed below:
| Circular processes reliant on transportation can operate more viably in cities. | Circular processes reliant on innovation can scale more rapidly in cities. | Circular processes can interface with industry more effectively in cities. |
| Businesses observe that shortened transportation routes are beneficial to reuse processes within city boundaries, particularly in the context of: • edible goods with a short shelf-life • heavy items (e.g. for built environment applications) or highly reusable materials that would be expensive or carbon intensive to operate, especially compared to single-use options • small-batch, bespoke, or locally-rooted applications that need to stay close to their customers or suppliers | Businesses whose processes transform materials and unlock new value see benefit in being close to the ‘waste’ or surplus supply, as well as to clients – this speeds up prototyping, piloting and refinement of solutions. Cities also concentrate talent and financial capital[8] which can be tapped to scale processes regionally and nationally. | Innovative processes and the businesses that operate them can help existing industries to save costs[9], unlock new value[10] and reduce their greenhouse gas emissions[11]to drive growth and productivity. |
| The Felix Project stays close to the source of food surplus and quickly redistributes it within the city’s boundaries. Heavy furniture and fittings are processed at Crown Workspace’s Edmonton ‘Renew Centre’. Reuser’s high-volume processing of packaging displaces single-use containers with sanitised, reusable ones. | Batch.Works’ bespoke, ‘manufacturing-as-a-service’ co-creates innovative products with clients using advanced technology and ‘modular factories’, securing over £1.8m of R&D grant funding. Kapdaa make direct use of locally generated textiles waste to make new products that can be used in the city. | Forage and Fern dehydrate surplus food, giving local cafes and restaurants quality, long shelf-life ingredients, while saving disposal costs for food suppliers. |
…and in turn create wider socio-economic benefits for cities.
We are seeing creative ways to keep circular processes in cities.
Both businesses operating circular processes and those who control access to urban space can play a role in retaining circular processes in cities – we’re seeing this, for example, in London.
If you’re a circular business looking to operate within a city, you can take inspiration from London’s circular innovators. They are designing their processes to rely less on industrial land and are exploring more diverse types of spaces, employing strategies such as:
 Designing processes to use less space and more distributed infrastructure. | Again have used robotics and computer vision to fit their packaging reuse processes into a shipping container-sized unit, the “Cleancell”. LEAP micro-AD provides small scale biodigesters that are designed to operate in urban spaces – for them, ‘scaling’ means having multiple locations close to the supply of food waste. |
 Designing processes that can operate within other types of commercial space (rather than industrial) | Batch.Works have explored basing their operations in commercial spaces such as retail units thanks to the nature of their additive manufacturing technology that is smaller, quieter, cleaner and more resource efficient than the alternatives. |
At the same time, landlords, planners and those who influence how urban space is managed can play a role to make space more relevant and accessible for circular processes, applying a range of different strategies:
 Optimise existing industrial space, through intensification of use or by offering it on more flexible terms | The Industria site developed by BeFirst provides modern industrial accommodation on multiple floors and allows for increased environmental performance. Hackney Wick and Fish Island Community Development Trust set up the Loop as part of the Creative Enterprise Zone. This “meanwhile” space warehouse provides co-working, studios and a large operational space for businesses creating a circular local economy. |
 Unlock new space by repurposing waste sites or under-utilised spaces | Western Riverside Waste Authority’s site in Wandsworth hosts REWORK, a reuse workshop providing apprenticeships for people getting back into work. Managed by Groundwork it refurbishes 4,500+ ‘white goods’ items per year. Renew Hub, a joint initiative between R4GM & SUEZ UK in Manchester, transformed an old waste site into a reuse facility. |
 Foster mixed-use development and co-location | Barking and Dagenham’s 12 Thames Road development contains housing as well as 5,000sqm of light industrial space which is specifically designed for new and growing businesses. |
 Develop shared infrastructure and machinery, especially for early-stage innovation development | Small or flexible units dedicated to earlier stage innovators that use circular processes can be ideal for catalysing their growth. For example, Opencell is where BIOHM developed their own processes before moving on to their own light industrial facility. Lambeth Council’s International House, London’s largest affordable workspace, includes Fabric Floor – a fashion and textiles workshop with shared machinery. |
In conclusion
The benefits and challenges of enabling circular processes within city boundaries should be carefully considered. Many circular processes are inherently designed to thrive in the concentrated, dense contexts of urban areas. Some of these processes have the ability to unlock economic growth at the same time, creating resilient supply chains that benefit local businesses and quality employment pathways. We’ve seen this first-hand in London, with many innovative start-ups developing new business models underpinned by circular processes.
We recognise that cities globally are facing increasing demands on space, having to balance requirements of housing, growing populations alongside supporting industry with suitable land. Here again, London offers useful ideas and inspiration for how reuse, remanufacture and other circular processes can be retained within city boundaries, despite these pressures.
At ReLondon, we’re leading a revolution in our relationship with stuff – if you want to join us in our mission, we invite you to get in touch. We’d love to hear from you if you’re interested in:
- Supporting start-up businesses to access suitable low-cost industrial space to pilot circular processes.
- Supporting more established businesses to scale up their circular processes and remain in or close to the city.
- Enabling industrial businesses already established in London to start their circular journey by sharing resources and applying circular processes to their operations.
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[1] London’s Fashion Footprint, 2023, ReLondon
[2] Based on ReLondon analysis (report forthcoming) of UK Business activity, size and location, 2023, ONS
[3] The Circular Economy at work: Jobs and Skills for London’s low carbon future, 2022, ReLondon
[4] A study of the potential of value retention processes (VRPs) for Resource Efficiency 2022, Oakdene Hollins, KTN, Uni of Brighton
[5] Data and graph based on NDR Stock of Properties and floorspace Tables, 2023, UK government
[6] This is demonstrated in both inner London (Tower Hamlets) and outer London (Ealing) with both boroughs seeing an increase in the number of properties (10.4% and 20.4% respectively) despite losing total floorspace (NDR Stock of Properties and floorspace Tables, 2023, UK government)
[7] Big box bulletin 2020 Avison Young
[8] Five years on: global climate tech investment trends since the Paris Agreement, Dealroom.co (2021)
[9] Case Study – Dartford Composites: Recycling acetone for reuse, 2021, ReLondon
[10] The story of Too good to go, 2020, Zero Waste Europe
[11] Interface: creating a climate fit for life through carpet tiles, 2019, Rotterdam School of Management
