Every year, humans extract about 100 billion tonnes of raw material from natural sources for manufacturing, per a World Bank report. Unfortunately, less than 9 per cent of this is recycled or reused after its initial use. This approach, often referred to as ‘Take-Make-Waste’, is a by-product of the traditional linear economy model and has done unconscionable damage to our natural environment. The ongoing exploitation of resources has led to issues of global magnitude, including increased greenhouse gas emissions, biodiversity loss, and climate change. Alarm bells have been ringing across economies and industries for some time now.
The automotive industry, in particular, consumes a significant portion of resources such as steel, aluminium, plastic, rubber, and glass. Therefore, it’s time auto-makers led by example in mitigating their impact by rebuilding a world driven by low-carbon mobility.
Already, several auto companies are prioritising eco-friendly practices and setting net-zero goals, while exploring low-carbon materials and alternative fuel solutions. However, one message is clear: the traditional linear economic model must transition to a circular economic approach that is inherently regenerative by design.
Here are the top four recommended steps for original equipment manufacturers (OEMs) in the auto industry to embrace circularity:
Modular designs: Design vehicles in a modular fashion, making it easy to disassemble and rebuild them by replacing or upgrading individual components. The goal is to extend the lifespan of a vehicle beyond its initial use.
Promote component re-use: Minimise the production of new parts by rolling out robust re-manufacturing programmes for engines, transmissions, electronics, and other components. Establish processes to restore used components to a like-new state. There needs to be a concerted effort to cut down on the need to use virgin resources. Instead, opt for closed-loop recycling wherein closed-loop systems are developed for materials like metals, plastics, rubber, etc.
The advantage of closed-loop processes is that recycled waste can serve as the basic material for re-manufacturing an infinite number of times, reducing the need for virgin resources and promoting sustainable mobility.
Establish comprehensive end-of-life protocols: The government’s scrappage policy has been instrumental in ensuring the sustainable disposal of vehicles at the end of their lifespan. It is essential to recover valuable material from vehicles reaching the end of life through the responsible dismantling of vehicular components.
The automotive industry faces a significant challenge in ensuring responsible end-of-life management for vehicles, as traditional practices often involve unregulated and environmentally damaging processes.
Revving up auto OEMs for circularity: Ideally, circularity delinks economic activity from the consumption of finite resources. But the circular economy could remain a pipe dream unless OEMs have the groundwork in place. The first step would be to formulate and formalise specific circularity and net-zero targets for different stages of their journey.
Regulation has a substantial role to play in how the circular economy takes shape and delivers impact. OEMs can work with policymakers to come up with the right regulatory guardrails and incentives that promote sustainable, circular economy practices and reduce emissions.
The primary consideration for auto OEMs while laying the foundation stones of a circular economy is the environmental impact of their operations, production activities, and processes. To make sure that no potential adverse effect goes unobserved or unchecked, comprehensive life cycle assessments (LCAs) are essential.
To attain this economic model, automakers must enlist the support of all possible business partners including multi-tier suppliers, OEMs, recycling service providers, etc., and form a unified network that enables an open, secure, and interoperable environment for data exchange all along the value chain.
The switch in mindset is as much cultural as it is action-oriented. Above all, it is best executed as a team. The circular economy cannot be realised if the approach is limited to the boundaries of individual businesses or solitary shop floors.
An ecosystem approach makes it truly impactful, extending the principles of circularity across the entire value chain from sourcing raw materials to parts, all the way to materials being collected back after their initial use.
The writer is Vice-President & Business Head – Trucks, Tata Motors