‘The three Rs’ – Reduce, Re-use and Recycle. It’s the short answer experts on waste will give you if you ask them how to cut waste. And they’re right if you’re enquiring about action at the citizen’s level. But there’s another R, less well-known, that businesses can and should be paying more attention to in this area: re-manufacturing.
Although there’s no legally-established definition of it, re-manufacturing basically means returning used appliances to an ‘as-good-as-new’ state, which can then be sold again on the market. Its economic potential is huge. A 2003 study in the US found that remanufactured products cost 40-65 % less to produce.
Consumers also have much to gain. A re-manufactured product typically costs 30-40 % less than the original product and performance after remanufacture is expected to be at least to the original product’s specification. What’s more, any subsequent warranty is generally at least equal to the one when it was sold as a new product. If hardware components or software can be upgraded during the process, customers can even expect to get better performance.
The next industrial revolution?
So how big is this economic potential? Well a more recent study estimates that the worldwide turnover in remanufactured products is already worth nearly USD 110 billion, with the European and US industries roughly equal in size. In the US, the value of re-manufacturing activities is increasing fast, at more than 15% per annum since the financial crisis. It already provides 180,000 full-time domestic jobs, and SMEs account for 36% of the jobs in this area.
Although similar market analysis and figures for the EU aren’t available, there are lots of positive case studies around. For instance, millions of used TV set top boxes and internet access devices get tested every year in the EU, and the faulty components are repaired or replaced.
The social and environmental case of this process is compelling. Re-manufacturing electronic appliances like TV set top boxes, creates highly skilled employment in Europe. It also causes 15 times less greenhouse gas emissions than the production of a new product and can be re-manufactured up to 7 times!
Remanufacturing today is mainly happening in Business-to-Business markets, but it can, and should, be scaled up to everyday consumer products. The catch is that fashion trends mustn’t change too quickly, or else demand for the re-manufactured product will collapse, however much certain components have been upgraded during the re-manufacturing process.
Challenges at policy level
The EU has said it wants to create a ‘circular economy’ in Europe, where used resources are constantly re-injected into the economic cycle and waste is minimised. That surely means more re-manufacturing for things like our laptops, phones or tablets. To do that, there are certain things that policy makers can do, including
- Strengthen EU requirements for products so that it is easier to disassemble and repair products and they last longer;
- Find ways of incentivising return rates of for used products;
- Make it easier for repair service providers to access spare parts;
- Develop EU-wide standards for re-manufactured products;
- Promote best practices for public procurement.
Next week, the Make Resources Count campaign is organising an exhibition on re-manufacturing in the European Parliament. You can find out more about the event here.
Or try our quiz on resource use and waste (including questions on re-manufacturing)!