Manufacturers Must Be Ready for The Circular Economy

In the words of Greta Thunberg, the world is on fire. Nasa data shows the planet’s climate is significantly changing owing to human activity including material extraction and use – which has nearly quadrupled in the last 50 years – and the subsequent creation of waste.   This includes the 50 million tonnes of e-waste produced globally every year, 80 per cent of which ends up in landfill.

This simply can’t continue. Action is needed fast and governments around the world are taking heed. None more so than in Europe.

In 2020, the European Commission adopted the new circular economy action plan (CEAP). It’s one of the main building blocks of the European Green Deal, Europe’s new agenda for sustainable growth, which will see the continent become carbon neutral by 2050.

Yet when it was announced, only 12 per cent of secondary materials and resources were being brought back into the economy. There is clearly a huge amount of work to be done, especially in relation to electronics. In fact, the CEAP includes a specific circular electronics initiative. This will push manufacturers to have longer product lifetimes and will hand consumers the right to repair and for obsolete software to be updated

Understanding The Circular Economy

This begs the question, what exactly is the circular economy? In short, it’s the complete opposite of the ‘take-make-waste’ linear model, which for many years has led to the production of single-use, disposable products.

This old economy gives little thought to the amount of irreplaceable global resources used in manufacturing, or the amount of waste produced, both during the manufacturing process and in disposing the product at the end of its life.

Furthermore, traditional linear models incur costs when manufacturers fail to utilise or recycle wasted material from production processes. As of 1st April 2022, the standard rate for landfill tax in some European nations is €114 per tonne which can cost a company between 4 and 10 per cent of its typical annual turnover on waste disposal.

With eyes on a net-zero emissions target, and a greener future for the planet, a circular economy directs production and consumption into a model of repair and reuse, where products and materials are remanufactured and recycled. All with the goal of extending their life cycles and reducing overall waste.

Embracing the circular economy

There are six steps to embracing the circular economy, starting with the sustainable sourcing of raw materials. The circular economy aims to decouple growth from raw materials consumption and is based on three principles: removing waste, complexity and toxicity from products for more effective end-of-life resource management; keeping raw materials in use for as long as possible and at their highest quality; and returning materials into the environment with a positive impact.

Then comes the design stage. Manufacturing in a way that fits into the circular economy begins here. For example, with businesses cutting down a product’s material content or making items easier to dismantle and repurpose. This will help them remain circling within the system for as long as possible.

The third step is to extend this new thinking throughout an organisation. Manufacturers must say goodbye to outdated business models, while welcoming new technology and IT infrastructure into the production and manufacturing process. For example, using the IoT to connect to the products they make. By doing so, businesses can collect data about how products are used to make better decisions about their lifecycle.

Another example might be the use of robotics and automation to reduce human error or check for weaknesses in design. This can then be rectified on the production line to reduce waste.

The fourth step is to incorporate more sustainable methods of distribution. For example, 3D printers reduce the need for intermediate goods to be transported from one location to another. To reduce environmental impact and transportation costs, files of intermediate goods can be delivered digitally and printed where needed. When the per-product mass of intermediate items is high and the distance between the two locations is long, additive manufacturing (as 3D printing is also known) is especially beneficial.

Finally, manufacturers need to consider a new step in the lifecycle of their goods: collection and reuse. This is no longer the consumer’s responsibility.

Reusing, repairing, refurbishing, remanufacturing and recycling can all help to create a closed system, minimising the use of resources and waste, as well as carbon emissions. By incorporating remanufacturing pathways into their practices manufacturers can extend the lifetime of products at the end of their ‘first life’. Repurposing them or enabling other, subsequent uses allows the product or its parts to be reintroduced into the supply chain.

In addition, manufacturers should constantly review techniques with legislation and certification in mind. It’s essential to keep on top of regulations by assessing which aspects of the proposed new rules may apply and then preparing for them.

Collaboration Is Key

While most manufacturers see the circular economy as a benefit to their brand reputation and profitability, the reality of transforming manufacturing operations is a significant challenge. It involves substantial change, and the cost can be high – especially when it comes to adapting supply chain practices and balancing sustainability with the bottom line.

Most manufacturers can’t do it alone. They must collaborate. For example, last year, electronic giants including Cisco, Dell, Google and Microsoft founded the global Circular Electronics Partnership. This is an alliance that maximises the value of components, products and materials through their full lifecycles with a goal to enable a circular economy for electronics by 2030.

In fact, since launching its first desktop with recycled plastic in 2007, Dell has set up the largest technology recycling programme where plastics from old computers have been recovered and turned back into plastic parts for new products. Now, the company has pledged to get to 50 per cent recycled or renewable materials across its entire product portfolio by 2030.

Epson also has a number of initiatives, including decarbonisation and environmental technology development, and is currently working towards a closed resource loop goal, in which its resources are used more effectively.

This means reducing the consumption of new underground resources by utilising previously mined minerals with the goal of becoming ‘underground resource free’ by 2050. This in turn will reduce its total resource inputs, eliminate waste and use 100 per cent recycled resources.

Innovative solutions will help businesses get one step closer to closing the loop and becoming sustainable, but it will require all businesses and consumers to support the principles of the circular economy to ensure the goals set out by the EU are met.

It’s clear that the need for investment in a circular economy requires prioritising long-term goals. Overcoming knowledge and cost barriers can open the doors for manufacturing, to achieve a more innovative and sustainable future – one that is developed to suit the future low-carbon, low-waste economy.

A truly circular economy is possible and imminent, but businesses and manufacturers need to consciously adapt to newer processes to ensure they get it right – it’s not just a box-ticking exercise, but a strategic driver that may require a complete overhaul of the entire manufacturing lifecycle.