Just like plastic, cardboard and clothes, vehicles can be recycled and re-enter the manufacturing process. But unlike plastic bottles, cardboard and clothes, the materials making up vehicles present significant barriers to circularity in the automotive industry. The increasingly complex component parts, a lack of pre-competitive collaboration, and the heavy environmental impact of the entire industry present some huge challenges to turning a linear process into a loop.
The case for action on circularity in the automotive industry is clear. Not only is the environmental footprint of the sector enormous, with more than a quarter of greenhouse emissions coming from the transportation sector, according to the EPA, but the industry is also a growing employer in emerging economies and will have a large influence on how we get around in the future. Taking a systemic and far-sighted approach to regeneration and circularity can help reduce emissions, provide a more diversified approach to manufacturing, and open up more mobility solutions to society.
Cue the launch of Auto-loop – an investigation in partnership with Novelis on how to close the automotive circularity loop. Forum for the Future interviewed industry leaders including executives from Toyota, Audi and EMR (a global leader in vehicle recycling), drew on insights from Jaguar Land Rover and circular economy work, allowing us to signal the barriers and opportunities in creating a closed loop system in the automotive sector. We identified three ways automotive business could operate differently and the barriers that need to be overcome:
- Long-cycle Planning
- The Heavy/Lightweight dilemma
- Collaborative Diversification
1. Long-cycle Planning
Long product cycles and deep capital investments make planning in the auto industry a complex endeavour. For the past 10 years, manufacturers suppliers have generally chased global sales growth while hoping to improve margins through automobile platforms in multiple regions and striving for scale wherever possible. The vehicles designed a few years ago and sold today will not be end up being recycled until 2033. Therefore engineers and car designers stand to benefit if they look back to look forward. They can look back by visiting current vehicle recycling plants, they can see a car sold in 2002 processed and see which materials are salvaged. And they can look forward by using those materials as part of new designs which can form part of a new product cycle recovered 15 or 20 years ahead.
Barriers to this opportunity
- Vehicles change hands 6-8 times through their lifetime. Manufacturers are therefore less able to take responsibility for the end of life of their vehicles
- There is still a negative perception of recycled content. Currently low cost is also seen as meaning low quality, and reused materials are seen as not having the same reliability.
2. Heavy/Light Weight Dilemma
In an effort to reduce weight, expensive and new combined materials have increasingly been incorporated into cars to reduce weight. Innovative materials, such as plastic composites, have also been developed and added to vehicles. While this drive towards lighter weight materials often results in environmental benefit (in the form of reduction in fuel consumption) and automotive safety, they are harder and, in some cases, impossible to separate and reuse. To close the auto-loop, the whole life-cycle of materials must be considered, including their end of life function.
In some cases, due to consumer trends, the same manufacturers who are trying to reduce the weight of the automobile chassis are also adding new features (and consequently weight) to the vehicle, such as screens, electronic controls and even massage functions.
Barriers to this opportunity
- New reinforced plastic composite materials and increased usage of glue for fixation create difficulties in recycling, repair and disassembly.
- Manufacturers don't make their products easily transferrable or understandable to technicians and mechanics, especially when it comes to reusing and replacing.
3. Collaborative Diversification
New business models and extra revenue can be created when manufacturers partner with other organisations to design new vehicles that use materials recovered from different models.
From a motorcycle to an SUV to a tractor – the new vehicles designed wouldn’t need to be the same type for recycling to occur. A visionary automobile company could partner with a tractor company and use material flows from both organisations to their mutual benefit.
Barriers to this opportunity
- There is currently a lack of pre-competitive collaboration. Intellectual property can prevent a variety of circular economy solutions, and pre-competitive knowledge access is vital to allow open innovation to flourish.
A circular, and therefore less impactful, automotive industry could mean a more sustainable way of traveling for all. It will dramatically reduce consumption of fossil fuels for running vehicles, as well as reduce the strain on resources. Innovative and regenerative approaches to manufacturing could offer us more diversified transportation of more secure vehicles that are lighter weight and have lighter footprints. There are barriers to closing the auto-loop, but together with Novelis we are convening a group of pioneering companies exploring how to make the automotive industry more circular. We are starting to test and co-create initiatives that put automotive companies and partners at the cutting edge of changing the system onto a sustainable path.
To learn more or get involved, contact Rodrigo Bautista [email protected]