Automotive Industry & Circular Economy

Automotive Industry & Circular Economy


this circular economy in the automotive industry nature of the problem elevated fixed costs over capacity and the presence of a few large incumbents controlling the market make the global automotive industry deeply rooted in the linear economic paradigm this so-called take make waste model take a number of raw materials are extracted from the earth to manufacture car components but overall reserves of some key resources are rapidly approaching depletion at current extraction rates lead reserves will run out by half a century make according to the golden rule of planned obsolescence car components have poor quality to secure fast replacement rates and overall short product lifespan waste car carcasses and components that are not recycled end up in landfills around the world it is estimated that some 1.5 billion new tires are produced annually problem quantification because of the linear approach to doing business firms operating in the automotive sector are characterized by severe environmental impacts and major structural inefficiencies car usage is directly linked to air pollution defined by the UN EP as the world’s worst environmental health risk in Europe alone emissions from vehicles exposed 90 percent of City residents to harmful air pollution levels approximately 20% of global emissions are linked to high energy intensive car manufacturing plants and petrol engines the average car is parked more than 90 percent of its life time circular practices tackling the linear paradigm some industry leaders have already started to revolutionize the car industry these pioneers include startups as well as established companies that are overturning their internal processes to deliver greener products and reduce their overall environmental footprint one design circular pioneer are adopting new design principles to reinvent the way vehicles are manufactured car components are designed with modularity and upgrade ability in mind so they can be easily replaced when brake or a newer version is released green design focuses on increasing the use of recycled materials in the manufacturing of the main body of cars designed for prolonged use implies the adoption of innovative solutions to extend the life cycle of vehicles to use at the use phase circular firms are tackling current rock-bottom utilization rates offering car sharing services to consumers car sharing users are growing at breakneck speed and will reach 25 million in 2020 according to some estimates three reverse cycles circular economy oriented companies have invested in remanufacturing operations where car components get reintroduced in the production process for example waste generation rates in state-of-the-art remanufacturing plants have reached an astonishing zero percent with all components being either reused recycled or valorized in treatment centers by doing so the need for virgin materials is significantly reduced business and policy advice recommendations for business business seeking to evolve should engage circular economy specialized consultants and participate in relevant industry initiatives to understand how circular principles can best apply to their unique realities and later start piloting small-scale circular projects before gradually embedding circular principles more broadly across their organizations hence adopting a learn-by-doing attitude recommendations to government’s in order to help circular innovations become the new backbone of the industry government should adopt seee oriented legislations such as tax breaks or incentives for car sharing practices assist firms wanting to embrace circular principles by setting up dedicated groups of consultants experts and researchers educators through conferences workshops and other initiatives on the benefit of the circular economy


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