Building a Circular Economy in the Electronics Industry
Moving from a linear to a circular economy will require the electronics manufacturing supply chain working together in a collaborative infrastructure.
Moving from a linear to a circular economy
There is increasing pressure worldwide for societal transformation from a linear economy – based on the traditional take-make-waste model – to a circular economy. A circular economy is a new model which, in the words of the Ellen MacArthur Foundation, “aims to keep products, components and materials at their highest utility and value at all times . . . a continuous positive development cycle that preserves and enhances natural capital, optimizes resource yields, and minimizes system risks by managing finite stocks and renewable flows.”
Meeting the needs of today’s increasingly affluent global population is not sustainable under a linear model. The expanding worldwide demand for electronics is increasing the opportunities for the electronics industry, and the most successful companies will modify their business practices consistent with circular economy principals.
To date, individual companies in the electronics industry have begun to take steps toward a circular flow of products and materials, but the electronics industry as a whole has not undertaken the business-model-level initiatives that are key for a serious transition to a circular economy. For example, we need to enable closed loop recycling for existing products that will capture and return products to the original manufacturer where they can be taken apart and the parts and/or materials used again in similar electronic products.
Challenges of a circular economy
The challenge of a circular economy is especially difficult for the electronics industry compared with, for example, the automotive industry. Foremost among those reasons is that an economically viable reuse and recycling infrastructure does not exist today that has the resources, information, or action plan to address the challenges of rapidly evolving product design and material content.
Unfortunately, the value of the materials in waste electrical and electronic equipment is very low. There are significant losses along the collection and treatment chain and, with today’s infrastructure, design-for-recycling does not pay for the producers. As a result, the supply chain is not incentivized to reuse and recycle.
Creating a circular economy will require making changes throughout the electronics manufacturing supply chain as well as throughout the product lifecycle. It begins with product design. Designers make choices that impact the ability of reuse and recycling organizations to be economically sustainable. Their choices can limit the efficiency of reuse and material recovery, can cause products to have shorter lives than would be optimal, and can limit the circularity of the electronics economy. However, the lack of widely available measurement tools to advise and evaluate product designs for reusability and recyclability makes it difficult to optimize product design with the end of life in mind.
Are we organized well enough to enable a circular economy?
There are several areas where work needs to be done to improve recycling efficiency and help achieve critical mass:
- Collection is the weakest link in enabling the circular economy. It is imperative that we get materials into the existing quality recycling process cost effectively— this includes quality standards, transboundary movement, and revenues matching costs.
- Optimize the recycling process chain to enable value recovery — we must assess added value, rationalize investment and pursue flexibility.
- Expand quality recycling processes globally — developing both the local infrastructure and access to the global market.
- Pursue new business models and designs for keeping materials in the loop — recycling is still needed.
- Leverage the power of marketing to enhance the market acceptable of recycling and reuse.
A collaborative effort is required
Making the circular economy model a reality will require stakeholders to work together in a collaborative infrastructure. In order to optimize value recovery for long-term economic, societal, and environmental sustainability this infrastructure must include product designers and manufacturers, product users and asset managers, and participants in the reverse supply chain at end of product use.
When we say a “collaborative infrastructure,” we are not implying that stakeholders along the chain of commerce will operate altruistically. We mean that the values returned by collaboration must be clearly demonstrated based on shared goals and that economic advantages for the collaboration must be created, using primarily voluntary enablers, including standards, so as to make sustained collaboration in the economic interest of all stakeholders.
2017 iNEMI initiatives
iNEMI currently has several proposed initiatives to help address some of the issues in developing a circular economy. These were defined through industry discussions at the 2016 Electronics Goes Green conference and in follow-up meetings held after the conference. Please review the list of initiatives and let us know if you are interested in participating in any of them.