Mapping Rebound Mechanisms in Circular Manufacturing: A Causal Loop Diagram Approach

The manufacturing industry is undergoing a strategic transition toward a circular economy to mitigate its substantial environmental footprint. Although circular strategies such as remanufacturing, recycling, and servitization aim to decouple value creation from resource consumption, their implementation often triggers unintended rebound effects. These effects arise when efficiency gains stimulate systemic responses that partially or fully offset the expected environmental benefits. Although these offsets are well documented, research on rebound mechanisms (RMs) in business-to-business (B2B) contexts remains fragmented and largely exploratory. This paper addresses this gap by adopting a system dynamics perspective to map the RMs activated by circular strategies in B2B settings through a Causal Loop Diagram (CLD). The analysis identifies the key variables and feedback structures that shape these mechanisms, providing a qualitative framework for understanding how sustainability gains can be eroded across core business processes (i.e., business model, production, product design, and procurement). The resulting CLD provides a clear and comprehensive view of how circular strategies, despite being designed for environmental improvement, can inadvertently trigger systemic rebound effects. This work contributes to advancing a more nuanced and system-oriented understanding of circular economy implementation in manufacturing.