Following a report in March from the All-Party Parliamentary Sustainable Resource Group (APSRG), Remanufacturing: Towards a Resource-Efficient Economy, a report out on 8 December examines the potential for remanufacturing in the UK in greater detail. MRW offers exclusive extracts.
Remanufacturing represents a triple win for the UK with vast social, economic and environmental benefits. Although the UK has made huge improvements in how it manages its resources in the past 20-30 years, there is still a huge amount of policy change that is needed if the full potential of this sector is to be reached.
Developments such as the recently announced Scottish Institute of Re- manufacture show that some countries are already realising the potential for remanufacturing. The UK needs to learn from these countries so it does not fall behind in capturing value.
Remanufacturing is a growing sector, but it continues to face barriers in this growth which limits its potential in the UK. A key objective of this latest APSRG inquiry, called Triple Win: The Social, Economic and Environmental Case for Remanufacturing, has been to outline the UK’s position in the global environmental sphere. The future of the manufacturing industry is linked to and dependent on environmental sustainability, reducing the consumption of virgin raw materials and exploiting advantages such as remanufacturing.
A series of manufacturing steps acting on an end-of-life part of a product in order to return it to like-new or better performance, with a warranty to match
The report outlines the strengths of industries already engaged in remanufacturing and the difficulties facing newcomers. Many reports on remanufacturing continue to focus on the automotive parts sector and some dabble in the potential for remanufacturing of WEEE products, but this report goes further by presenting the possibilities for remanufacturing in sectors which have not yet been looked at, such as paints and textile products.
The success of remanufacturing is also intrinsically linked to the development of innovative and circular business models. The report presents an analysis of how different businesses have successfully adopted remanufacturing processes into their business models to support the transition to and growth in remanufacturing.
Fee for service, pure leasing, incentivised return and reuse and third party remanufacturing models are found to be particularly in-line with remanufacturing.
Finally, recommendations are presented to the Government and industry in how remanufacturing can be further supported and barriers to this industry’s success can be overcome.
1 The waste hierarchy
Efforts towards moving the UK to a more circular economy continue to have a strong focus on developing policies that focus on lower value options in the waste hierarchy, such as recycling, energy recovery and disposal.
In the hierarchy, remanufacturing is placed towards the top, and the APSRG report has identified that the focus on ever-increasing recycling targets as set by the European Commission, with a 50% target by 2020 and 70% target by 2030, is not only shifting the focus of resource efficiency policy to the bottom of the waste hierarchy, but also acting as a barrier to remanufacturing.
This is specifically the case in industries such as electronics and paint, where the focus continues to be on recycling and disposal, respectively.
2 Innovative opportunity: remanufacturing of paints
Remanufacturing in the UK is practised in a number of industries, such as electronic goods, automotive parts, toner cartridges and ink jets, flooring and paint. Many of these face barriers to growth which need to be addressed, while several of these industries with further potential for growth have received little public recognition.
The remanufacture of paints is particularly interesting. The process involves adding a small fraction of virgin materials to collected paints to improve its quality and bring it to like-new standard.
Around 10% of all paint bought each year in the UK remains unused and only around 1% of UK waste paint is remanufactured (see diagram right). Considering that local authorities in England are spending £6.7m a year on managing waste paint, and that the
carbon footprint of remanufactured paint is 50% lower than virgin manufactured paint, then significant social, economic and environmental opportunities are being ignored.
The Triple Win report recommends that the Government should develop a resource efficiency action plan for leftover decorative paint. It also says that representatives from Defra, local authorities, waste management companies, paint manufacturers, retailers and third party paint remanufacturers should develop a clear and concise plan for how the collection of waste paint can be improved so that the remanufacturing of paints is encouraged in the UK.
3 Barriers to the growth of remanufacture
There are a number of key barriers that hinder the remanufacturing industry in the UK from reaching its potential. These include engrained linear business models, designer and intellectual property conflicts, negative regulatory frameworks and shortages of skills. But one of the key barriers continues to be the lack of a global definition.
As well as consolidating a lack of trust in remanufactured products, not having a clear legal definition of remanufacturing has resulted in disparities between so-called remanufactured products in many industries.
Some companies market products as being ‘remanufactured’ when they are in fact refurbished, reconditioned, recycled or upcycled. This has proven harmful to remanufacturers who genuinely adhere to the commonly accepted definition of the system. Using incorrect terminology has destabilised industries, such as that for toner cartridge and ink jets, by affecting customer confidence.
It is vital the Government addresses this disparity by acknowledging the report’s definition of remanufacturing, and developing a certification mark for products to demonstrate that they have been remanufactured compliant to the definition.
4 Business models for remanufacturing
Remanufacturing differs significantly from other waste reduction activities such as recycling largely due to opaque structures of ownership. Alternative business models are therefore important in facilitating and encouraging a functional market for remanufactured goods, where access to end-of-life products is a central concern.
All successful remanufacturing companies have cracked the code at the business model level - whether this is an automotive parts remanufacturer which has developed a successful relationship with an original equipment manufacturer to get access to cores and products, or a carpet flooring remanufacturer whose business model includes incentivised return of their product.
Experimenting with business models is inherently risky. Businesses need Government support to facilitate the process as well as best-practice case studies which they can learn from.
If business models are revolutionised by industry and this is supported by the Government, then current best practice in remanufacturing can become the standard of the future.
- Government should adopt this report’s definition of remanufacturing to provide clarity as to what constitutes remanufacturing versus other aspects of the circular economy.
- Government should work towards procuring UK remanufactured products such as office furnishing and equipment, carpet flooring, electrical equipment and medical appliances where possible. Government should also work towards increasing its procurement through service models to support the remanufacturing industry.
- Government should work towards improving and increasing financial investment in the UK remanufacturing industry.
- Government should invest in developing more apprenticeships in the remanufacturing industry. It should also encourage the development of sustainable design and sustainable engineering modules and courses at universities.
- A more formal Special Interest Group should be established to support industry in the development of a comprehensive and inclusive mechanism to drive remanufacturing forward, utilising all expertise and excellence present in UK institutions.
- Government departments such as Defra, BIS and DECC should actively promote remanufacturing and learn from practices in countries which are leaders in this industry. The UK should take advantage of the knowledge that has already been developed.
- Government should develop a certified mark for remanufacturing to demonstrate that products have been tested and fully comply with those standards of a new product to improve clarification for consumers on which products have been remanufacturing.
- Government should encourage the development of an online platform with clear standards where businesses can exchange knowledge, components and products to encourage the reusing of materials and products and allow remanufacturers and manufacturers to access products at the end-of-life stage.
- Government should work with the European Commission to place more policy emphasis on setting targets for those activities at the top of the waste hierarchy such as reuse and remanufacture.
- Industry should explore a system of extended producer responsibility on purchased products to encourage their return to manufacturers or remanufacturers at the end-of-life stage, and promote shared responsibility throughout the supply chain.