Since
circularity
first became an aspiration of the electronics recycling industry, the endgame
has always been a closed loop — allowing each original electronics
manufacturer (OEM) to create new servers, laptops, mobile
devices
and more out of their own recycled products — resulting in zero waste.
But getting there, even in the US — where increasingly e-waste is being
recycled in responsible and circular ways — has always proven to be easier said
than done. There are many factors: Material labeling and tracking must be
improved; and the recycling process, including shipping, must be made easier for
consumers and businesses. But less attention is often paid to one of our
industry’s biggest barriers to achieving a closed loop: Scale.
There are over a thousand certified Responsible
Recycling (R2) and
e-Steward companies that have met the high standards
to safely recycle and manage electronics. In theory, this is a good thing —
allowing for more IT asset disposition (ITAD) companies and
partners
moving toward the same environmental goals. But it also means that the industry
is largely dispersed, with many different companies utilizing so many entry
points into the recycling process that e-waste is harder to track and the
industry can’t get and apply recycled-material data at scale.
Solving the scale problem is crucial to helping manufacturers be more
circular.
If we as an industry are truly committed to achieving a closed loop, it may take
some hard decisions — and perhaps consolidation — to make that dream a reality.
Why scale matters
Opening access to sustainable design
Join us at SB'24 San Diego (October 14-17) as Prakash Arunkundrum — Logitech's Head of Global Operations and Sustainability — shares insights from search for next-generation materials, components and processes to develop superior products with sustainability as a high design priority.
While conducting our own audits of our processes to verify what was actually
happening to our materials downstream, certain realities became clear. First,
large volumes of e-waste can actually help ITAD partners move from receipt to
disposition faster, rather than building loads over time. This is because the
supply chain needs to hit certain minimum-volume benchmarks in order to make
recycling and reuse financially viable for those that maintain and leverage it.
Most ITAD companies are forced to go through a series of middlemen to
consolidate loads for this reason. Second, large amounts of similar product (ex:
metals)
makes sorting, packing and shipping easier and less labor-intensive for end
recyclers to refine into new raw materials. Finally, large amounts of similar
materials are easier to track — maintaining the circular process in the supply
chain.
These three elements are key to the supply chain since, in order to create
scalable, open- and closed-loop, circular applications, manufacturers need to be
able to plan their production alongside a reliable supply of raw materials. In
this way, large, consolidated amounts of e-waste actually helps identify in
advance what types of recycled materials the OEMs are looking for so that they
are forecasted into the supply chain and used in new products, hopefully
creating a real closed-loop, circular application.
Unfortunately, this has been one of the main challenges of widespread adoption
of circular processes. The supply of virgin raw materials has simply always been
more reliable and cost-effective than recycled ones, in part because the
industry remains too distributed to create and service a circular supply chain.
It’s a paradox — a circular supply chain can’t become viable until there’s a
larger scale, which leads to persistent (or increased) fragmentation as ITAD
partners try to absorb more volume.
The issue remains, despite the economic and ecological opportunity that it would
provide — including a cleaner planet, less waste and more detailed data that
could be used by businesses toward meeting increasingly prevalent ESG
standards.
In particular, solving scale could produce great ESG benefits — because, if you
can further consolidate recycling, it naturally means less scope 3 carbon
emissions
from downstream partners. There are cases of four legs of downstream materials
shipping, which sends emissions through the roof. With stable volumes of
recycled materials that manufacturers can rely on, those materials (like metals)
can go directly to end smelters — which can only benefit ESG metrics and
reporting.
Getting there
Convincing the industry to help build a circular economy means working together
to confront those who would rather continue old ways of thinking and doing
business — while helping others that have the desire, but not the means. This
includes ITAD companies that simply don’t have the scale to do it efficiently
and e-waste recyclers that do have the scale and are recycling their materials
in open-loop applications, but may not be focused on closed-loop circularity
There must be some greater form of consolidation; and it will take everyone
working together to find the best path forward.
Realistically, I understand that this type of shift requires sacrifice — as well
as an investment in time and money — and can include making hard decisions such
as changing a company’s entire downstream. In order to effect major change in
the industry, it probably needs to be a profit opportunity for some and a
government mandate for others — making the high cost of recycling cheaper in the
long run over producing goods with higher carbon footprints. But, for now,
what’s most needed is the real desire to collaborate and an example that others
might follow. If everyone (OEMs, ITADs, recyclers,
ODMs, manufacturing partners, etc.)
can take a focused approach and demand that we all work together to create
viable closed-loop applications for all the e-waste, a recycled materials supply
chain won’t be that far behind.
Fixing the scale issues means changing the circumstances to make it worthwhile.
But if we can accomplish that, a more sustainable, profitable world awaits those
that embrace change.
Get the latest insights, trends, and innovations to help position yourself at the forefront of sustainable business leadership—delivered straight to your inbox.
Published Apr 20, 2022 8am EDT / 5am PDT / 1pm BST / 2pm CEST