For a long time, the transport sector has been one of the most significant contributors to carbon release—the major cause of climate change. But it’s not just engine emissions that are the cause.
At least 10% of CO2 emissions from vehicles come from the manufacturing phase and 5% from the disposal of parts, according to the national air quality charity and policy analysis group Environmental Protection UK. As vehicles become greener over the next decade, the proportion of life-cycle emissions from production could reach as high as 60%.
The rise of cleaner, battery-powered EVs, along with government policy to phase out the sale of new petrol and diesel vehicles from 2030, will go a long way to curbing the amount of CO2 emitted over the average vehicle’s lifetime. Could circular manufacturing processes and improved supply chain scrutiny help automakers reduce the figure further? And is it possible for one of the most prolific pollutant sectors to clean up its act and become a productive player in the circular economy?
The step change is already taking place. In this article, we’ll take a look at how automakers are adopting new production and business models as they take to the road to more circular modes of transport.
Automotive manufacturing has historically been a waste-heavy process, with much of the waste products like solvents and paint runoff destined for landfill. But that’s changing fast.
The Society of Motor Manufacturers and Traders (SMMT) Sustainability Report 2022 announced that the UK automakers recycled an impressive 83.1% of all waste in 2021. The industry re-used or recovered a further 15.2% of waste, leaving a record-breaking 0.6% going to landfill and 0.2% into incinerators. And a total of 17 respondents to the SMMT’s 2022 report produced zero waste in 2021.
Circular manufacturing workflows like remanufacturing and closed-loop recycling played a critical role in achieving this and look set to become a mainstay of manufacturing processes as automakers look to drive the figures down even further over the next decade and beyond.
Although it shares some characteristics, remanufacturing shouldn’t be confused with recycling. This circular production practice sees automakers building new factory-quality parts and products comprising repaired, restored and refurbished components.
The process can reduce energy consumption from manufacturing by as much as 80%, requiring 88% less water and 90% less chemicals, according to studies.
The payoffs aren’t just environmental: in addition to reducing carbon output, remanufacturing also cuts costs for automakers, allowing them to produce parts like engines and gearboxes at a fraction of the cost of new.
Closed-loop recycling, where automakers use product waste to make more of the same product, is another route automakers can take to reduce carbon and costs. In 2021, Nissan launched the Rogue—the company’s first model to incorporate closed-loop recycling into its aluminium parts production.
Other manufacturers, like Ford, are already taking remanufacturing and closed-loop recycling a step further, offering collection schemes to return vehicles to the point of manufacture at the end of their lifecycle.
The need for a greener paradigm in transport is also reflected in consumer demand for new, more circular models of vehicle ownership. Mobility as a service (MaaS) and Transport as a service (TaaS) are already beginning to shift vehicle makers from a sales-phase to use-phase models of revenue generation while pushing manufacturers to adopt a more circular mindset.
Subscription vehicles, leased by drivers directly from the manufacturer or via the growing number of subscription-based dealers, will mean automakers will increasingly factor in longevity, repairability and recyclability to the design process.
Meanwhile, shared ownership schemes allow drivers to share the costs and benefits of vehicle ownership while reducing the overall number of cars on the road. This poses something of a challenge for manufacturers, who may find themselves outside of their usual area of engineering expertise when designing, building and incorporating the connectivity features required to support MaaS and TaaS. However, the challenge is not insurmountable, and savvy automakers that get ahead early on may find themselves in a lucrative position as suppliers of entertainment, navigation, and other connected components to later market entrants.
There is no question that automakers can be productive players in the circular economy—it’s already happening. In fact, stats and figures like those found in the SMMT Sustainability Report hint that vehicle manufacturers may have a leadership role to play in setting an early example for other sectors.
However, there is still some distance to travel, in which players across the automotive value chain will each play a role in transitioning the sector towards the circular economy.
Here’s how we’re likely to see that play out over the coming years:
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